Future MDA, NASA, and military job loss (Huntsville: houses, purchase)
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Defense stocks had been beaten down based on expected cuts, so the reaction of the market today indicates cuts are not as bad as feared, in general.
The 2 big cuts to MDA are ABL and MKV. ABL has no impact on Huntsville. MKV is managed out of Huntsville, and Lockheed and Raytheon are the 2 contractors.
THAAD is managed in Huntsville, so that's a net add. The contractors affected are Lockheed and Raytheon.
Aegis BMD boost has no impact on Huntsville.
I couldn't figure out if the $1.4B cut includes the $900M boost to ABL and MKV or not. Are they cutting $2.3B and adding $900M, for a total cut of $1.4B, or are they cutting $1.4B from existing FY10 program and adding back $900M in new spending for a net cut of $500M? 14% cut or 5% cut? Big difference.
If it's only a net 5% cut, and one of the biggest components outside Huntsville, then MDA-Huntsville came out better than expected.
BRAC's still happening, there's still a big net job gain for Huntsville on the way.
Things may change again after the quadrennial review next year. however.
I couldn't figure out if the $1.4B cut includes the $900M boost to ABL and MKV or not. Are they cutting $2.3B and adding $900M, for a total cut of $1.4B, or are they cutting $1.4B from existing FY10 program and adding back $900M in new spending for a net cut of $500M? 14% cut or 5% cut? Big difference.
If it's only a net 5% cut, and one of the biggest components outside Huntsville, then MDA-Huntsville came out better than expected.
According to this article, it's a $1.4B cut to the overall missile shield program, so that sounds like a net cut? I'm not really sure though.
DOD Secretary Gates' budget calls for deep cuts, but defense industry may see some gains - WITI (http://www.fox6now.com/business/sns-ap-defense-budget-winners-and-losers,0,3025499.story - broken link)
I think Huntsville will be fine. More government and federal jobs are going to be created. The research park is booming. So what will happen to NASA deal that will bring more than 3,000 jobs to Huntsville.
What I think I read and heard, correct me or adjust or add in if necessary:
Mentioned an $700M increase in theater, mainly THAAD and Aegis. Some of that here.
Cuts were in ABL, I think to continue R&D. I think that stuff is out at EAFB.
GMD didn't get cut but it didn't seem to get expanded.
EC in Europe still seems to be on the table.
Not sure what killing MKV will do to Huntsville
Not sure what part of FCS vehicle work is done in HSV. I worked FCS in Huntington Beach a couple years ago, not sure if my buds out there will be affected.
Gut feeling (body language in the office, whispers in the hallway), I don't sense horrible things for Huntsville.
First, I don't think anyone should panick about their jobs just yet. This is just a beginning of Defense budget negotiation and it will continue to be debated, lobbied, and negotiated between House's Arm Services committee & the White House. The dust won't be settled until later this year.
My take on the MDA fundings
Quote:
Overall, the Missile Defense Agency program will be reduced by $1.4 billion
Since both THAAD and Standard Missile 3 (SM-3) programs are a part of the Missile Defense System, and
Quote:
we will add $700 million to field more of our most capable theater missile defense systems, specifically the terminal High Altitude Area Defense (THAAD) System and Standard Missile 3 (SM-3) programs.
That tells me the total cut out of other parts of Missile Defense is $1.4B + $0.7B = $2.1B cut.
So where does this $2.1B cut comes from?
As far as I know, ABL is still in R&D phase so it's a cost avoidance
Quote:
We will cancel the second airborne laser (ABL) prototype aircraft.
Likewise, MKV was only in the planning stage so there was not really a big money spent.
So again, this does not answer the question - where will they cut in other MDA programs in order to achieve the $2.1B savings?
where will they cut in other MDA programs in order to achieve the $2.1B savings?
Shucks, I hope it isn't the Olympic Pool and Dive Center, the Waterpark resort, the motocross track, the SCUBA facility, the Bungee platform, the outdoor Go Karts, and the water ski jumping facility proposed for MDA employees' lunch time recreation on the Redstone Arsenal.
Shucks, I hope it isn't the Olympic Pool and Dive Center, the Waterpark resort, the motocross track, the SCUBA facility, the Bungee platform, the outdoor Go Karts, and the water ski jumping facility proposed for MDA employees' lunch time recreation on the Redstone Arsenal.
That tells me the total cut out of other parts of Missile Defense is $1.4B + $0.7B = $2.1B cut.
So where does this $2.1B cut comes from?
It's $700M for THAAD and $200M for Aegis BMD (of which SM-3 is a component), so that's $900M on the plus side.
Quote:
As far as I know, ABL is still in R&D phase so it's a cost avoidance
Likewise, MKV was only in the planning stage so there was not really a big money spent.
So again, this does not answer the question - where will they cut in other MDA programs in order to achieve the $2.1B savings?
FY09 ABL budget was ~$400M and projected to be about the same in FY10.
FY09 MKV budget was ~$340M and projected FY10 budget was ~$440M.
So if they cut ABL down to $100M and MKV completely that will account for $750M or so.
Gates also said they were not going to add any interceptors at Greely, so that's a big chunk, and it seems highly likely the European Component will get virtually nothing next year. Gates said he would "restructure the program to focus on the rogue state and theater missile threat" - not sure what that means as that is exactly what Blocks 1-5 are about.
Any thoughts concerning gov. employees replacing contractors jobs per Gates remarks today?
Considering Hsv has a high rate of contractors, how would this scenario effect Hsv overall. I do not really understand which jobs they consider 'support service' contractors and what process they will use. I wonder what type of job loss
this could create in the area and what will happen to many of the contracting companies?
Also, thinking this would not be a one off change over, as in, if contractor joe's
position becomes a gov. job then joe would not automatically become a gov. employee. The job would be 'posted' for anyone to submit for the gov. position. So someone from or outside the area could take contractor joes job and leave him without a job?
From Gates budget speech transcript.....
A final recommendation that will have a significant impact on how defense organizations are staffed and operated. Under this budget request, we will reduce the number of support service contractors from our current 39 percent of the workforce to the pre-2001 level of 26 percent and replace them with full-time government
employees. Our goal is to hire as many as 13,000 new civil servants in FY10 to replace contractors and up to 30,000 new civil servants in place of contractors over the next five years.
Any thoughts concerning gov. employees replacing contractors jobs per Gates remarks today?
Also, thinking this would not be a one off change over, as in, if contractor joe's
position becomes a gov. job then joe would not automatically become a gov. employee. The job would be 'posted' for anyone to submit for the gov. position. So someone from or outside the area could take contractor joes job and leave him without a job?
OK, technically I am sure you are very correct, but that would be REALLY stupid. Who decides to replace 13K experienced people with people who have no direct experience all at once? I realize the type of administration we are dealing with(most of these cuts are pretty ridiculous), but I don't think even THEY are that idiotic. You also have to realize that many people don't want to come to HSV, think of the opposition to BRAC, but that is a discussion for another time.
Next, as for HSV's economy, even if they did replace each contractor, it wouldn't be a big deal, for each house for sale, someone would be in need of a home as a newcomer.
Right now I am just in a wait and see mode. Many times politicians are more talk than action so until something is signed, sealed, and delivered, I won't put much stock in it.
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