Sequester Spotlight: Virginia’s Military Region

BY Cassie M. Chew  March 1, 2013 at 6:16 PM EDT

The self-imposed March 1 deadline to broker a deal to avert across-the-board budget cuts in discretionary spending known as sequestration has passed and lawmakers have left town for the weekend.

NewsHour is talking with our public media partner stations across the country to gain insight on how the threat and implementation of sequestration cuts affect their communities.

We’ll showcase two of those communities on Friday’s broadcast in a segment featuring Karen Kasler of Ohio Public Television and Megan Verlee of Colorado Public Radio. Tune in at 6 p.m. ET.

Meanwhile, Cathy Lewis, host of WHRO’s “HearSay,” says the cuts will have a dramatic effect on the the labor force in the military-rich Hampton Roads region, where on Tuesday President Barack Obama called on lawmakers to compromise.

The NewsHour spoke with her this week.



How large is the military presence in Hampton Roads?

We have all the branches of the military represented here. It’s the largest concentration of military assets in the United States. It’s the largest harbor–so it’s the largest naval presence without a doubt. One out of every two dollars in this economy is absolutely dependent on the defense industry. So that’s why I think people are very concerned about it. And you know the big shipyards,Newport News shipyard will be fine. It’s our major employer, It’s the largest manufacturing employer in Virginia. And they have long-term contracts for carriers on the books. They are going to survive but some of their work will be certainly affected by it.


What kind of jobs might be lost if the cuts are implemented?

They could be all kinds of things. For example, you could have engineers associated with ship repair, specialty engineers who are brought in for certain ship systems. This can also be—these are janitorial firms that clean these companies and clean bases. These are companies that make uniforms for soldier, sailors and airmen. They are every kind of supporting organization you think would be needed to support an industry that is as large as the defense industry in Hampton Roads–food service grounds keeping operations. It is certainly the technical capability. There’s no question about that but, I think what sometimes gets lost in the equation is the trickle down of these support businesses that exist to support an industry.

How has the region’s employers prepared for the cuts?

In the last couple of months what’s become clear is they are pretty shocked at what’s happening and they are also making plans for it. So while the effects are supposed to happen next month, workers in this community are already being warned that they will get layoff notices. A major ship repair facility issued what they call, I believe “intent to layoff” notices. They basically already let people know–look if nothing changes on this end we will be laying off. And they are significant layoffs. They are very, very significant layoffs in the community. In one case a ship repair company with 1,100 workers probably will be laying off more than 600 of them. Everybody is sort of on pins and needles. They are waiting to see whether the Navy will cancel upcoming ship repairs. If there’s no ship to repair, they basically have to lay them off or turn them loose.

How will this impact the military readiness?

If you lose that labor force into other industries it’s really hard to rebuild it when the crisis is over. So that’s what I think the ship building industry is really trying to make sure and certainly the Navy knows that because they’ve been down this road before. They know exactly what the implications of these kinds of draconian steps are, but I think they are really trying to hard to say “Congress look. You are going to lose more in the long-term if you do not do these ship repairs on schedule because the equipment gets degraded. The workforce capacity we lose to other industries and then the assets itself gets degraded over time and the repairs are more expensive to make down the road.”

How might the sequester impact the large defense industry firms in Hampton Roads?

Newport News shipyard is one of only two shipyards in the country that builds and maintains nuclear power aircraft carriers. But even with that, they are absolutely impacted.They are they may have to stop two carrier overhauls that are on the books right now. They may delay construction on a third carrier. So on even on a big yard, it’s having an effect.

How about smaller businesses?

I was talking to someone the other day who is a family business owner of one of these defense subcontractors–these are often service maintenance, that kind of thing, suppliers that kind of thing. And she was telling me they’ve had this family business for sixty something years and they will absolutely have to close if these defense cuts come because the way they are being made leaves the services very few options of where to go to get the money.

What affect has the uncertainty had on your community?

What I keep hearing from people is that the uncertainty is killing them. In fact before we got to this point they were saying, let’s just try to figure out something. Now we are getting to the point where these cuts, since they haven’t been announced yet and there’s not a deal, these cuts it looks like are going to have to be compressed into an April to October time frame, which is going to be pretty devastating.

What are Virginia’s local leaders saying about the cuts?

Gov. Bob McDonnell sent a letter to the president that said please do something about this because the state will go into recession and Virginia usually tops the list of best places to do business. That is something that is really coveted in the state and they don’t want to see anything mess with the state’s business reputation across the country so they are definitely concerned about it. Certainly Sen. Warner has also I hear behind the scenes is working with his gang of eight, which is good news they are working very quietly behind the scenes to try and come up with something that could work. Sen. Warner also has said that there are smart ways to make these cuts and there are stupid ways to make these cuts and his effort in the shortest turn around is trying to get the services permission to make the cuts in a way to they need to as opposed to arbitrary across the board way. So there’s been a lot of discussion about this.

*What would people like to see happen? *

I think that there’s an impression that military people and the defense industry doesn’t want any cuts at all. I don’t think anyone wants cuts in their business but these are bright capable and intelligent people who understand that when you draw down a war in Afghanistan and a war in Iraq that you of necessity draw down the defense. I think that they get that. I think what they want is–”We get that this is going to happen. Let’s do this in a thoughtful way that will allow us to make the changes that need to be made. In ways that won’t effect our presence and our readiness around the world.” I think our federal lawmakers are really and the Navy and the other services as well have said, “Look, these cuts are not ideal in any circumstances, but if we have to make them, give us a break, don’t make us make them 10 percent across the board. Give us the option to move the money around.