Pentagon to Cut $1 Billion From Midgetman Missile Contracts
The Air Force said Friday that it is imposing a $1-billion reduction in the value of contracts held by six aerospace firms in the Small Intercontinental Ballistic Missile program, known as the Midgetman, as a result of cutbacks in the Pentagon budget.
Although the service said it could not determine the precise effect of the reduction on employment, it estimated that 2,300 jobs at seven industrial locations around the country could be affected.
The largest contract reductions Friday hit Rockwell International’s Autonetics division in Anaheim, which is under contract to develop the guidance and control system for the missile. The company was issued a $484.2-million contract last October, but it is being reduced to $110.2 million.
It is not known how much of the original contract value has been spent, but a Rockwell spokeswoman said the program will continue. As a result of the Air Force action, Rockwell will reduce its work force of 650 on the program by 50 to 100 jobs, the spokeswoman said, through employee transfers or attrition.
Only last December, Rockwell said it had 900 employees on the program and planned to add another 100 engineering jobs, indicating that the company has already begun cutting the work force.
Billions Needed
“It is an awful shock,” said Rockwell Autonetics President John A. McLuckey. “But we saw that coming as a result of the Air Force cutting its funding.”
An additional 150 jobs could be lost if the funding for the program does not improve, McLuckey said. The Midgetman jobs could be offset, however, by a potential contract for rail basing of the MX, he added.
Defense Secretary Frank C. Carlucci all but terminated the Midgetman program, which called for deployment of 500 single-warhead nuclear missiles, when the fiscal 1989 budget was introduced. The budget requested only $200 million for the program, effectively putting it into “caretaker” status until the next Administration.
For the program to adhere to its original schedule, the Air Force would have needed about $2.2 billion this year and another $2.2 billion in fiscal 1989. Congress provided $700 million this fiscal year.
The House Armed Services Committee, a major proponent of the new weapon, has already voted to increase the fiscal 1989 figure from the $200-million request to $500 million. The action highlights the unusual battle between Democrats in Congress, who support the missile, and Air Force officials who want to kill the program in favor of other weapons.
Even if the additional funds are voted by Congress, however, the Air Force said it would not have enough money to sustain the program on its original schedule, leaving no choice but to rewrite the seven major development contracts held by the six firms.
In addition to Rockwell, Boeing in Seattle was cut $278 million to $313.6 million; Morton Thiokol in Brigham City, Utah, was cut $51 million to $125.9 million; Hercules in Magna, Utah, was cut $72 million to $169.7 million, and Aerojet in Sacramento was cut $77 million to $180.7 million. Martin Marietta in Denver, which holds two contracts, was cut $47 million to $123.9 million on a system support contract and $100 million to $344.5 million on a hardware contract.
