Tim Anderson went to work for Columbia’s FN Manufacturing, a Belgian firm that produces assault rifles and machine guns for the U.S. military, a decade ago.
Now, the 42-year-old husband and father of three from Cayce watches the news each night with an increasing sense of dread that automatic cuts to the nation’s defense budget, set to take hold Friday, will dry up FN Manufacturing’s orders and put him out of work.
“This is my survival,” Anderson said as he drilled rifle barrels last week at the Old Clemson Road plant in Northeast Richland. “I have to take care of my family, put my kids through college. And this is jeopardizing my job.”
The military faces $500 billion in across-the-board cuts over the next 10 years unless Congress and the president can find an alternative. Those cuts, called the “sequester,” are part of $1.2 trillion in cuts – half to the military, half to domestic spending – mandated after last August’s debt-ceiling debacle. Those cuts come on top of $487 billion in reductions already targeted for the Pentagon – together equaling about 18 percent of the 2012 defense budget.
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That’s a scary figure in South Carolina, where eight bases and thousands of defense contractors pump $16 billion into the economy each year.
Although the exact fallout of the cuts is hard to pin down, they could cost the state more than 13,000 jobs and $807 million in annual payroll just from its nearly 4,000 defense contractors, according to a conservative, pro-military think tank. Those firms provide everything from toilet paper and salad greens for recruits at Fort Jackson and Parris Island, to armored vehicles built in Ladson to keep soldiers safe from roadside bombs in Afghanistan.
Already, FN Manufacturing has dropped to 500 workers from 785 in 2008, at the height of Iraq and Afghanistan wars. Many of its remaining jobs were saved because the company has transitioned to doing more non-military business, such as making pistols for law enforcement. Those lines make up 40 percent of the company’s business today compared to 5 percent 10 years ago.
“This business is cyclical,” said Ralph Young, the company’s vice president of human resources. “You have to diversify.”
‘It’s going to be traumatic’
More immediately, the cuts could trigger furloughs for the state’s 11,348 civilian workers who work for the military – unpaid days off totaling about 20 percent of their salary – that will have to be taken by the end of this year. Those workers serve in myriad positions from on-base schools and hospitals, to programs that help returning soldiers deal with post-traumatic stress disorder and find jobs.
Fort Jackson has 3,500 civilian workers, who are paid $51 million annually. The furlough represents $10.2 million that those workers won’t spend this year on gas, food, entertainment and other commodities. Shaw Air Force Base in Sumter employs another 1,340 civilian workers with a payroll of $59 million. A furlough could cost its local economy nearly $12 million this year.
The cuts “are going to affect the civilian workforce and that is going to affect the economy and the community,” said George Goldsmith, a retired two-star general who is chairman of the Greater Columbia Chamber of Commerce’s military affairs committee. “It’s going to be traumatic.”
State officials, military leaders and defense experts say the numbers are a moving target. Beyond the furloughs, few know what the outcome for the local economy is going to be.
“The estimates change from day to day,” said Christine Brim, spokeswoman for the conservative think tank For The Common Defense, which made the job-loss predictions for South Carolina using defense contract data from 2011. “It’s all in flux.”
While the S.C. Board of Economic Advisors said it can’t provide or confirm any specific data about the cuts, it has lowered its estimate of how much personal income will grow in the state to 3 percent this year from 3.5 percent in anticipation of the sequester. Chief economist Frank Rainwater expressed frustration that is seemingly universal among military, economic, political and business leaders: No one seems to know exactly where the ax will fall hardest and how deep the blow.
“We’re just waiting,” he said.
Leaving a ‘hollow force’
One thing is certain: If the sequester kicks in, the military will be shaken from the top brass to the lowliest grunt, leaving it, according to outgoing Secretary of Defense Leon Panetta, a “hollow force,”
In a Defense Department memo to base commanders, Pentagon officials have laid out possible measures to save money. They include, among dozens of other suggestions:
• Laying off temporary and contract workers
• Cutting maintenance on ships and military hardware
• Delaying research and defense contracts
• Cutting flying hours for military pilots
• Cancelling air shows and military flyovers
• Reducing operating budgets for bases by 30 percent
• Removing nearly 10,000 military personnel over the next five years
• Slowing production of new weapons systems like the F-35 fighter jet.
For South Carolina, cancellation of the F-35 could have a big impact. Sumter’s Shaw and Marine Corps Air Station Beaufort both are slated to receive the new planes. If they don’t, that could impact the bases’ scoring in a new round of base closures and realignment, called BRAC, which some experts think could occur as soon as 2015.
“That is a concern,” said William “Dutch” Holland, a retired two-star Air Force general and former commander of the Shaw-based 9th Air Force, who now is executive coordinator of the S.C. Military Base Task Force, charged with protecting the state’s bases. “I don’t see how they can make these cuts and not call for another round of BRAC.”
‘It scares me to death’
Because Fort Jackson is the nation’s largest training base, turning out about 50,000 soldiers each year, base commander Brig. Gen. Bryan T. Roberts said the Columbia facility might be less affected than other installations. Current building projects, such as new barracks, classrooms and mess halls, should continue. But future building projects might be delayed, he said. Also, maintenance, operations and other on-base functions could be trimmed.
“We’re taking prudent measures,” he said. “We’re conducting some ‘what if’ drills.”
But the full extent of the cuts hasn’t yet been outlined by Fort Jackson’s commanders at the U.S. Army Training and Doctrine Command in Virginia or the Pentagon.
“There are a lot of rumors out there,” Roberts said.
Paul Paterson, vice president of operations for the U.S. Patriot store outside the gates of Fort Jackson and eight other stores near East Coast military bases, has heard the rumors.
The store sells military-approved apparel like boots and uniforms, sunglasses and military insignia. The store was teeming with new soldiers and their families after Thursday’s Fort Jackson graduation.
A retired command sergeant major, Paterson said the store is changing its stock somewhat to offset any drop in military business. It is marketing more to law enforcement, and has started carrying more dehydrated foods and survival gear for people preparing for disasters or the end of the world.
“That Mayan calendar thing was great for us,” he said. “I have to flex.”
But for FN Manufacturing employee Doug Fisher, 52, of Lugoff, the ability to flex is limited.
Fisher began working for the gun manufacturer at age 18, when the plant first opened, rising from basic machinist to “setup” specialist today. In that job, he makes sure all of the sophisticated weapons are working properly.
Fisher said he has never had another job. And if he was laid off, he isn’t certain that he could get another one with the same good wages and benefits that he has now.
“It scares me to death,” he said.