General Dynamics Lobbies for $1.4 Billion to Avert Tank Cutback

General Dynamics Lobbies for $1.4 Billion to Avert Tank Cutback
May 13, 2011


General Dynamics Corp. and about 200 of its suppliers will gather in Washington to lobby lawmakers to add almost $1.4 billion to the budget for upgrading Abrams tanks and to override the Army’s plan to save money by suspending the program.
If the Army’s proposal to shut down work at the Lima, Ohio- based tank plant between 2013 and 2015 is carried out, suppliers like Continental, Ohio-based Verhoff Machine and Welding Inc. will have to dismiss workers. Of the company’s 100 employees, 75 work on the tank components such as seats and heavy armor, according to President Ed Verhoff. The company reported sales of $15 million last year, and Verhoff anticipates he may have to cut as many as 60 jobs.
“We are looking for other sources of revenue but, with the economy the way it is, it is pretty difficult,” he said.
The Army’s 2012 budget, which seeks at least $5 billion for all its ground vehicles, proposes to suspend the ongoing upgrade of older tanks to an enhanced Abrams M1A2 model while it assesses its future tank modernization strategy.
General Dynamics, based in Falls Church, Virginia, already has had a setback after Defense Secretary Robert Gates this year proposed canceling its $15.5 billion Expeditionary Fighting Vehicle program for the Marine Corps.
General Dynamics and its suppliers plan to use their annual meeting with lawmakers May 23-24 to try to reverse the Army’s decision on Abrams production. It would cost almost $1.4 billion over the next four years to continue buy 70 tank upgrades a year. Keeping the plant open would be less expensive than restarting after an almost three-year hiatus, the companies plan to argue.
Working the Hill
General Dynamics has been building the enhanced tanks since 2004. The most modern versions of the Abrams include digital terrain maps and command and communications systems, as well as composite armor. Under the current plans, the Army will have 1,547 of these tanks.
The suppliers plan to meet with politicians from their state delegations, including lawmakers such as Republican Representative Pete Sessions of Texas and Michigan Democratic Senators Carl Levin and Debbie Stabenow. As part of the “Abrams Supplier Days,” the contractors also meet with Defense Department officials.
“We hope they agree that it’s in the best interest of our national defense and Army” to keep the Abrams program going, Bruce Barron, chief executive officer of Barron Industries, in Oxford, Michigan said in a phone interview. He and other suppliers plan to tell lawmakers that once their manufacturing operations are shut or idled, “it’s not easy to turn it back on and it’s costly.” (Source: Bloomberg)


Source;

http://bit.ly/mcoPsI


Copyright 2011 Atkins & Assoc. All Rights Reserved.