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Area defense contractors gird for more cuts

Allen County companies have seen the value of their U.S. military contracts plunge by more than half since fiscal 2008, according to a national defense advocacy group, which says leaner times lie ahead.

Data compiled by the Center for Security Policy show local spending by the Department of Defense fell from $1.1 billion in 2008 to $505 million in fiscal 2011.

And under planned federal reductions that would begin in 2013, Allen County defense contractors could see revenue drop $91 million a year over the next decade, the center projects.

“The impacts are going to be disproportionate in different places. What is important is that states and local governments and local businesses are aware of what’s about to hit, because 18 percent cuts are going to feel like a tsunami in some places,” said Christine Brim, chief operating officer of the nonpartisan, non-profit Center for Security Policy.

Under legislation approved by Congress last year, nearly $1 trillion in defense cuts will begin taking effect next year, although lawmakers appear determined to cancel half the total.

“This is significant and serious,” said Tim White, a spokesman for the local ITT Exelis operations, which manufacture military communications equipment.

“The cuts are going to be felt in places that most people wouldn’t think,” White said. “There are a lot of small contractors and suppliers that are involved in the defense industry in Allen County and surrounding counties.”

The Fort Wayne plants for ITT Exelis and Raytheon Systems, which designs military communications gear, combined to land nearly $424 million in defense contracts in fiscal 2011.

But the Center for Security Policy lists many other local contractors that could be affected by federal spending reductions, including gear manufacturer Bowmar, machinery maker Automated Laser and aircraft parts producer Diversified Tools and Machine.

There are also the various suppliers and vendors for the county’s two National Guard bases.

“Contracts go up and contracts go down every year,” Brim said. “There’s good reason for them to go down a lot of the time. (Work) just finishes.”

Also, many sales to the military dwindled as U.S. troops left Iraq and Afghanistan, Brim noted.

“But an 18 percent cut due to happen in 2013, in addition to the existing cuts, is something that has a major economic impact,” she said.

Allen County ranked third among Indiana’s 92 counties in the value of defense contracts in fiscal 2011, behind Marion and St. Joseph counties.

Whitley County ranked fifth, with $93 million worth of contracts in 2011, according to the Center for Security Policy. Nearly all of the money went to partner companies Erapsco and Undersea Sensor Systems, which build underwater sensors for the U.S. Navy.

An 18 percent cut would mean about $16.7 million less for Whitley County’s contractors.

bfrancisco@jg.net

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