Aerospace Association Chief Says Defense Industry Is Fragile
The head of the Aerospace Industries Association described the U.S. defense industry as “fragile” as it heads into a period of tighter budgets.
AIA Chief Executive Officer Marion Blakey, speaking in Washington, said Defense Secretary Leon Panetta has a “very clear” focus on protecting the defense industry.
The trade group, which represents manufacturers such as Boeing Co. (BA), United Technologies Corp. (UTX) and Lockheed Martin Corp. (LMT), has launched a campaign to stave off cuts in the national security budget as a special congressional committee seeks to find $1.5 trillion in deficit reduction throughout the federal government. Company executives met with Panetta yesterday.
Blakey said she expects about $460 billion in cuts to the Pentagon budget over the next decade. Her calculations include $78 billion already planned by the previous defense secretary, Robert Gates, and expected national security cuts from $350 billion mandated under the Budget Control Act to as much as $400 billion found through a Pentagon review.
“That is simply more than we can sustain,” Blakey said today at an industry conference in Washington. “Defense has already cut to the bone” under the pending efforts to reduce the deficit, she said.
If Congress fails to act on cuts identified by the congressional panel, the budget control deal calls for an automatic reduction of an additional $500 billion in defense spending, not including interest.
That action could boost the U.S. unemployment rate by a percentage point, said AIA Chairman Jim Albaugh, the president and chief executive officer of Boeing Commercial Airplanes. The rate in August was 9.1 percent.
To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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