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Looming Defense Cuts A Key Issue For Brown, Warren

Chris Marzilli, president of General Dynamics C4 Systems, describes the fully equipped military vehicles, laden with General Dynamics communication software. The Taunton-based complex faces federal defense cuts. (Courtesy General Dynamics).

Chris Marzilli, president of General Dynamics C4 Systems, describes the fully equipped military vehicles, laden with General Dynamics communication software. The Taunton-based complex faces federal defense cuts. (Courtesy General Dynamics).

TAUNTON, Mass. — Massachusetts companies build missiles, jet engines and some of the most sensitive electronics going. The defense industry is a major driver in the Massachusetts economy, directly employing about 130,000 people.

But federal defense spending is facing steep cuts on Capitol Hill and from the Pentagon. Thousands of jobs in Massachusetts are at stake — an issue the next U.S. senator from here will grapple with almost immediately in Washington.

WIN-T Technology In Taunton

At a sprawling manufacturing complex here in Taunton, Chris Marzilli, president of General Dynamics C4 Systems, a business unit within the company, walks us through secure, glass doors, and into a large building.

“We are in Building 80, which is the factory for Warfighter Information Network Tactical — WIN-T,” he explains.

WIN-T is a secure communications network linking soldiers on the battlefield to each other and commanders, giving them a super-fast Internet connection.

The technology is contained in a sand-colored, four-foot-tall box topped with a dome, with cords snaking out, connecting to industrial-sized outlets on its panel.

“So think of vehicles to vehicles in a convoy being able to communicate at kind of the Internet you expect in your home life,” Marzilli says. “This changes the game. This allows us to do things at megabit speed and provide applications right down into the foxhole … it allows them to understand the environment, see first, if you will, and then act decisively. And effectively do their job more safely.”

But WIN-T faces cuts. As of just a few weeks ago, a $334 million cut threatened the program and hundreds of jobs. But just days ago, word came that the cut has been scaled back to $54 million. Marzilli credits the Massachusetts congressional delegation and specifically Sen. Scott Brown for the save.

But General Dynamics, and other companies doing defense work in the state, are facing down the barrel of much bigger cuts in the form of a federal program called sequestration.

Thousands Of Jobs At Stake

“Sequestration could wipe out more than a decade of growth, and could take a decade or a generation to recover from,” says Chris Anderson, president of the Defense Technology Initiative and the Massachusetts High Tech Council.

Sequestration strikes fear in the defense industry, as it calls for $1.2 trillion in across-the-board cuts in all programs nationally — about half of that in defense.

Studies by the Donahue Institute at the University of Massachusetts show it could cost Massachusetts 30,000 jobs.

It is expected to slice into work at many of the defense giants like General Dynamics and Waltham-based Raytheon, but small businesses as well, including those that might hold one single defense contract to make that one widget.

“Some of these smaller businesses are very dependent on that single contract or that supply chain that they play for that system,” says Marty Romitti, the Donahue Institute’s director of economic and public policy research. “So that whole network is out there and it spans across New England. And all of these have reverberations through the business community.”

He fears sequestration could stall Massachusetts’ economic recovery.

“Unraveling that innovation economy with some of these cuts is very concerting, because it’s hard to put the pieces back together again once Humpty Dumpty’s fallen off the wall.”

The big question for industry insiders is whether Congress will stop those sequestration cuts from taking place. And, the debate is on.

What Would Our Senate Candidates Do?

Nationally, Republicans have pushed for cutting non-defense programs instead of defense. Democrats have suggested getting rid of tax cuts instead.

Romitti’s take is: Expect little. “It’d be hard to imagine they take it up before the election, but they won’t have much time after the election,” he says. “They’re in a little bit of a pickle because all sides have a good argument.”

In a statement to WBUR, Democratic Senate challenger Elizabeth Warren acknowledged sequestration would not be good for Massachusetts and said across-the-board defense cuts could be avoided if Congress ends tax breaks for oil companies, closes loopholes, and takes other action. But she said also it is possible to make defense cuts in a targeted way.

A statement from Brown said sequestration should be replaced with “smarter, more targeted budget savings,” warning military cuts will destroy thousands of Massachusetts jobs. But he has declined to say where the money might be found to rescind the cuts.

Outside of defense industry players, executives and workers here, do defense cuts matter in the campaign?

“The constituency that cares most about it is already kind of a largely Republican. So I’m not sure there are a lot of swing voters who are going to be terribly concerned about this,” says Jeff Berry, a Tufts University political science professor. “I don’t think anybody confuses Scott Brown with John McCain on defense issues. He’s still a junior senator and he’s simply not established a leadership position within the party.”

People in the defense industry told us they are wary of Warren because of her criticism of big corporate tax loopholes, and that she specifically targeted industrial and defense giant General Electric, which has a plant in Lynn. They also said Warren hadn’t made it clear how she would help the defense industry if she is elected.

But Berry thinks it’s not a big negative if Warren is fuzzy on this.

“I think Warren’s best answer is ambiguity,” he says. “I don’t think she wants to come out full force in favor of large-scale defense cuts because it does hurt sectors of Massachusetts. On the other hand, she wants to be honest, and not say that she’s going to work on behalf of particular industries that she has no intention of working for.”

Meanwhile, the industry is weighing in with its dollars.

Federal reports show employees of the 10 largest defense companies in Massachusetts and their political action committees have given more than $90,000 to the Brown campaign.

Both Marzilli of General Dynamics and Anderson of the Defense Technology Initiative have given to Brown.

Warren raised just under $5,000 from workers, and none from the defense company PACs.

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