Sacrificing Jobs to Fight a Phantom
The one thing you’re apparently not allowed to bring up in the budget debate is the unconscionable amount we still devote to something called “defense,” despite the end of the Cold War. Nor do many journalists or presidential candidates seem inclined to ask what exactly are we defending and against whom.
It was easy to justify the hundreds of billions spent on defense when we had the Soviets and Chinese communists to ward off, but those guys are our buddies now. What’s a military-industrial complex lobbyist to do?
In the Reagan-Bush years they had a field day, running up red ink with abandon. You would think defense industry profiteers would be worried now that peace has broken out. Instead, they have enjoyed five years of unprecedented profits by laying off workers while continuing to sign up government cost-plus contracts, which guarantees top executive bonuses. And rosy projections for the future have set off an intense merger competition to become the biggest Daddy Warbucks on the block.
The arms makers are optimistic because the Gingrich revolution has ensured that while we put every domestic program at risk, we will go on building weapons with no strategic purpose, like spending $72 billion for F-22 stealth fighters, which are designed to penetrate Soviet radar that no longer exists.
Indeed, Lockheed Martin, which builds the F-22 in the backyard of Gingrich’s Georgia district, is now planning to use a Russian-built engine, the RD-180, to power its Atlas 2AR rocket. Is there a disconnect here? Why are we still building weapons designed to counter the Soviet threat when the Soviets no longer exist and Lockheed Martin is in partnership with the ex-commies who succeeded them?
It’s because the defense industry is the most resilient government socialist welfare boondoggle ever. Profits have been booming for the past five years because of massive layoffs. The key to post-Cold War profitability has been a merger mania between major defense contractors allowing them to fire thousands of “redundant” workers while government financed contracts guaranteed the bottom line.
That’s what happened last year when Lockheed merged with Martin Marietta, forming the largest weapons manufacturing behemoth in history with $21 billion in revenues. Martin Marietta Chairman Norman Augustine, who used to work for the Pentagon before moving through the revolving door, received an $8.2-million bonus for engineering the merger. The compensation package for executives of the two companies came to $92 million. On the other hand, the company is now eliminating 12,000 jobs and closing 12 factories.
Last week, Lockheed Martin acquired the Loral company for a cool $9.1 billion, and more firings are expected. The new company is expected to garner one-fourth of the Pentagon’s procurement budget in the next decade, but while profits go up, more jobs will be lost. “We do realize the realities of the marketplace are such that we have to be efficient to survive,” said Augustine, now Lockheed Martin’s chief executive.
By realities of the marketplace, he is not implying an attempt to convert from military to peacetime production. Lockheed Martin, like the rest of the defense industry, has proven woefully inadequate in moving from the safety of bloated government contracts to meeting the needs of consumers in the marketplace. As Lockheed Martin’s Augustine admitted last year, “our industry’s record at defense conversion is unblemished by success.” The man obviously has a sense of humor, but with $8.2-million bonuses, that’s easy. Harder to chuckle when you’re middle-aged and suddenly laid off.
The dirty secret of defense spending is that we now mistakenly support it largely as a jobs program, the one government welfare program enjoying widespread bipartisan backing. But it’s a lousy jobs program. Just ask the tens of thousands in Southern California who used to work for Lockheed or the folks in Massachusetts laid off en masse by Raytheon. When Northrop, Grumman and Vought combined, 14,000 aerospace workers out of a work force of 53,000 lost their jobs.
Since the defense industry is incapable of converting to peacetime work, we should take the tax monies now spent on useless hardware and give them directly to defense workers, in the form of extended unemployment insurance and education for jobs that are needed.
Defense workers who served their country well during the Cold War should not now be forced to suffer the peace through layoffs while their bonus baby bosses make out like bandits.
Robert Scheer can be reached via e-mail at <76327.1675@compuserve.com>.
