BAE Systems Plc (BA/) is deploying smaller suppliers to pressure U.S. lawmakers to speed up orders to modernize Bradley fighting vehicles, a move the company said may protect thousands of subcontractor jobs and keep a Pennsylvania assembly line open.
Representatives of between 30 and 40 of the vehicle’s more than 586 suppliers are lobbying Congress to shift orders to the 2014 fiscal year that begins Oct. 1, instead of waiting until fiscal 2015 and 2016 as outlined in President Barack Obama’s budget proposal.
The Army’s plans would pause a Bradley fighting vehicle production line from 2014 until at least 2017, putting at risk 1,200 jobs at BAE’s plant in York, Pennsylvania, Mark Signorelli, BAE’s general manager of vehicle systems, has said.
The move may eliminate as many as 7,000 additional subcontractor jobs, Signorelli has said. Bradley suppliers include L-3 Communications Holdings Inc. (LLL:US), Cummins Inc. (CMI:US), and DRS Technologies Inc., according to London-based BAE.
Bringing forward future orders would help keep suppliers in business and deter skilled workers from looking for jobs in other industries, John Polacek, chief operating officer of Johnstown, Pennsylvania-based JWF Defense Systems LLC, said today. Polacek’s company cuts aluminum and welds it to the precise specifications for use in the Cold War-era Bradley vehicles.
“We’re fighting off brain-drain of young people leaving our town and moving to places like Washington, D.C.,” said Polacek, whose roughly 400-person company had 700 employees in 2008. “When you’re in a rural town, people leave if they can’t find work.”
BAE wants Congress to fast-track into fiscal 2014 plans to convert 93 Bradley M3 Cavalry vehicles to M2 Infantry Fighting Vehicles. The London-based company is also pushing to equip some Bradley units with thermal vision capabilities, so all of the vehicles have the increased ability to detect hazards.
“We are now faced next year with a shutdown if nothing happens,” said Alice Conner, a director of manufacturing integration and deployment for BAE at the York facility. “It hits the suppliers first.”
The U.S. military has cut spending on ground vehicles after withdrawing from Iraq and planning to pull most U.S. troops from Afghanistan by the end of 2014. BAE’s defense contracts dropped more than 60 percent to $6.11 billion in fiscal 2012 from $16.3 billion in fiscal 2008, according to data compiled by Bloomberg.
BAE estimates it would cost as much as $750 million to shut the Bradley line in York and re-start production in 2017, when the Army plans more upgrades. The Army would save money by funding some Bradley work in York through 2017 and increasing BAE’s activities on other vehicles, according to the company.
The Pentagon is grappling with automatic budget cuts known as sequestration that would total $500 billion over nine years. Those reductions are on top of $487 billion in already-planned defense cuts over a decade.
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