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July 19, 2013

Funding plan could hurt JWF Defense

Army cutting Bradley money

JOHNSTOWN — A scheduled decrease in funding for production of Bradley Fighting Vehicles could lead to job losses at Johns­town-based JWF Defense Systems.

Seven to nine employees usually work at the local company making parts for the military fighting platform, according to the company’s chief operating officer, John Polacek.

The Army plans to provide the main manufacturer, BAE Systems in York, $13 million each in fiscal years 2014 and 2015, followed by $14 million in 2016. The money is to be used for converting M3 cavalry variants to M2 models, according to information provided by the company.

BAE received $200 million for Bradley manufacturing in 2013 and expects to get $270 million in 2017, when production of a new line is set to begin, although the exact size and shape of the future fleet has not been fully determined.

In the interim, though, the lower funding – which is a result of automatic cuts in federal spending and decreased demand with the Iraq and Afghanistan wars winding down – could seriously impact the ability of BAE and subcontractors such as JWF to retain skilled workers.

“It’s not only the layoffs; we want to make sure we main­tain the key skill sets that the workers have,” said Megan Mitchell, BAE communications manager.

Polacek, whose company usually receives hundreds of thousands of dollars annually for working on Bradley vehicles, said that creating the funding spikes “just doesn’t make sense.”

BAE’s proposal is for the Army to provide $48 million in 2014 and then nothing during either of the two subsequent years. That money would be used to accelerate the conversion process and make minor refurbishments; therefore, it will cost more than the projected $40 million to be spread out from 2014 to 2016. Company officials said the one-year financial infusion would enable BAE to get through the immediate future until some foreign contracts can be finalized and bridge the gap until 2017.

“We don’t want them to give us more money,” Polacek said. “We just want them to smooth the money out.”

There is an immediate need to address the issue because fiscal year 2014 starts on Oct. 1.

“We need to get this under contract within the next couple months so we can start ordering parts from people like John Polacek,” said Roy Perkins, a BAE Systems director.

Without the change, BAE would “basically have to shut

the line down,” according to Perkins, which would necessitate substantial restart costs, including training of new workers, when full production is scheduled to begin again in 2017.

BAE estimates it could cost up to $750 million to restart from scratch in 2017, depending on how much the supply chain is disrupted.

“Eliminating production of the Bradley Fighting Vehicle could cost the military more money and critical capabilities in the long run by eroding the well-skilled and experienced industrial base,” U.S. Sen. Bob Casey said. “The skills and capabilities of the individuals who make this equipment are not easily replicated or quickly generated. It takes years of experience and training. It’s critical that we maintain this capability and our advantage in producing high-end technologically advanced equipment to protect our troops.”

BAE has appealed to senators, House members and military officials, including Heidi Shyu, the assistant secretary of the Army for acquisition, logistics and technology.

U.S. Rep. Keith Rothfus, R-Sewickley, from the 12th district, was one of 15 House members to sign a letter sent to Secretary of the Army John McHugh addressing the future of the Bradley Fighting Vehicle and its industrial base. The representatives expressed concern about how short-term financial decisions could affect the Bradley program over the next few decades, including its anticipated integral role in the Armored Brigade Combat Team.

The congressmen requested consideration for funding continued Bradley production.

“We believe this would be the most responsible and cost-effective plan to avert a large-scale shutdown of the Bradley Industrial Base, and it would reduce future risk to our nation’s soldiers who will depend on Bradley Fighting Vehicles for the next 20-30 years,” the congressmen’s letter said.

The Army did not immediately respond to a request for comments.


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