The CEO of BAE Systems, Inc., the company’s U.S. subsidiary, outlined the threat in a message to employees, some of whom joined in rallies aimed at calling attention to the issue and urging Congress to take action.
“Sequestration is worrisome on many levels,” President and CEO Linda Hudson wrote in her blog on the company’s intranet. “Half of the cuts are designated to come from the defense budget, the primary source of funding for our programs. The arbitrary, across-the-board cuts would likely create chaos and could tangle contracts and bring government procurement to a standstill for months.”
On July 30, BAE Systems employees from around the Washington metropolitan area joined industry partners at a Stop Sequestration rally in Arlington, Va., attended by Virginia Reps. Frank Wolf, Jim Moran, and Gerry Connolly, and Virginia Gov. Bob McDonnell. The bipartisan group addressed the impact sequestration would have on Virginia’s economy — up to 200,000 lost jobs — if Congress does not act to prevent the cuts mandated by the Budget Control Act of 2011.
“A third of our economy here in northern Virginia and in the national capital region is dependent directly on federal investment and spending,” Connolly said.
The following day, Sens. John McCain of Arizona and Kelly Ayotte of New Hampshire spoke at a rally at a BAE Systems plant in Merrimack, N.H. “The Department of Defense has already agreed to reduce defense spending by nearly $500 billion over 10 years,” McCain said. The added military funding cuts called for under “sequestration” — a $1.2 trillion package of cuts set to take effect in January — would add $500 billion to that figure, he said.
Addressing 300 BAE Systems employees, Ayotte spoke of the impact the budget cuts would have on her home state, where the company is the top industrial employer. “BAE Systems is the largest manufacturer in the state of New Hampshire,” Ayotte said. “Sequestration could devastate the state.” According to a George Mason University study, defense cuts of $500 billion over the next decade would eliminate 3,600 jobs in the aerospace and defense industry in the Granite State alone.
Tom Arseneault, who leads the BAE Systems products businesses that include the Merrimack plant, also warned of dire consequences if the cuts are not averted. “We’ve been long anticipating budget pressure and have been making adjustments, as we are now in the cloud of uncertainty of sequestration,” Arseneault said. “If this goes through, approximately 10 percent of our workforce in the United States will be impacted.”