The U.S. Department of Defense has yet to inform Connecticut manufacturers which programs and contracts may be impacted by the automatic budget cuts that went into effect March 1 with the sequester.
Officials of United Technologies Corp. and subsidiaries Sikorsky Aircraft Corp. and Pratt & Whitney ”” the region”™s largest defense contractors ”” had previously warned that the cuts could lead to hundreds, if not thousands, of jobs lost.
Offering his apologies, U.S. Sen. Christopher Murphy visited the state”™s largest defense manufacturers late March, including Sikorsky”™s Stratford headquarters where he held a press conference.
“There is no way to tackle our enormous debt and deficit without cutting defense spending,” Murphy said. “I am a proponent of a smaller defense going forward, but it has to be done on a more rational basis than the cuts in sequestration.”
To express his support for the industry, Murphy said he wanted to apologize for the “dangerous and draconian” budget cuts in military defense, which Congress could have avoided had a grand bargain been reached. Out of the $85 billion sequester budget reduction, $42.7 billion was cut in defense spending, a 7.9 percent cut.
“Eight percent is too much too quickly,” Murphy said. “It has consequences both on the military readiness of this country and for our civilian base.”
Murphy said Sikorsky was in a better position compared with other manufacturers because of its “superior” and “indispensable” aircraft. Though it is possible the government could break its multi-year contracts with the company, Murphy said it was unlikely, especially considering the discount it gets from buying in bulk.
Sikorsky spokesman Paul Jackson said the company still didn”™t know how the budget cuts would affect them, but that, at the very least the company was anticipating immediate effects on aircraft delivery times with the furlough of plant employees hired through the Defense Contract Management Agency.
Military contracts make up 50 percent of Sikorsky”™s contracts, with international and commercials sales making up the remaining half, Jackson said. But moving forward, the company plans to increase its sales outside of the military, he said.
“It”™s softening,” Jackson said of the military contracts. “We see it declining.”
As the sequester takes effect and the U.S. government readies more military cuts, Murphy also said manufacturers, like Sikorsky, will need to increase their efforts to sell abroad.
“One of the keys moving forward is for our entire defense base to sell more globally,” Murphy said, mentioning how the move would strengthen smaller manufacturers. “That”™s good news for our local supplier base.”
In the fourth quarter of 2012, even before the sequester hit, there was a massive reduction in military contracts, seen throughout the supply chain, Murphy said.
“We”™ve already seen orders slow down for small defense suppliers,” he said.
Moving forward, Murphy said he”™d like to see more certainty come out of the federal government, especially for the sake of the businesses that depend on it for contracting. Without certainty, Murphy said the economy can”™t recover.
“There”™s a nervous energy here because people aren”™t sure what sequestration will mean,” Murphy said. “Government should stop lurching from fiscal crisis to fiscal crisis.”
