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Softening the Blow

Layoffs by defense contractors are inevitable, but the economic damage can be minimized by redirecting these firms toward civilian priorities

By Paul CastlemanPaul Castleman, of Lexington, Mass., is a former CEO in the aerospace computer industry. / February 11, 1992



PRESIDENTIAL and congressional candidates are trying to reconcile two pressing 1992 campaign themes that seem incompatible: finding jobs for out-of-work Americans and eliminating obsolete cold war military programs that still employ hundreds of thousands of workers.

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Politicians, even prominent military critics, say they will need "cover" to vote for deep defense budget cuts. Translated, that means they need something to offer voters that will soften the blow in districts where bases or weapons plants are major employers.

The more plausible the proposals political leaders can put forward, the deeper they will be able to cut the $300 billion-a-year military establishment. But many of the proposals being talked about are either impossible, wasteful, or dangerous.

One dangerous alternative, promoted by military hardware salesmen and lobbyists, is to sell even more weaponry to third-world countries. While this policy may keep some Americans working in the short run, it has the unfortunate side effect of encouraging future Persian Gulf wars and creating more Saddam Husseins.

Another option, large-scale worker retaining programs, has the ring of optimism. But these programs are unlikely to help many since they are geared to low-skill workers, not the highly skilled people who are most affected by defense cuts.

The most fanciful and unrealistic proposals involve so-called "economic conversion."

Despite idealists' wishes, it is next to impossible to change the deep-seated culture of an aerospace military contractor into an approach that successfully competes in the consumer marketplace.

From top management through the ranks, these organizations are filled with people who have spent their entire professional careers in government-funded technical projects.

Commercial manufacturing and marketing are foreign worlds in which such firms are generally unable to succeed.

But we cannot and should not let these companies wither and die. We cannot because of the military-industrial complex's enormous political clout in Congress; the administration will block any attempt at Draconian cuts. We should not because they represent a valuable American technical industry and because the resulting large-scale job dislocation would be both morally and politically distasteful.

Thus, it may be politically impossible to dismantle the military-industrial complex and culturally impossible to transform it into competitive commercial enterprises.

The more practical course is to redirect its mission. By changing the military-industrial complex's mission from military directives to critical civilian needs of the 1990s, we can utilize the military contractors' proven ability to tackle complex problems involving new technologies. In addition, such a change would help redress the enormous imbalance in civilian research and development spending between the United States and our successful rivals in Asia and Europe.

A national effort for civilian research and development could come up with new manufacturing processes, solve threatening environmental problems, and accelerate civilian applications in outer space. Imagine supplanting the high-rolling Strategic Defense Initiative anti-missile program with a Strategic Manufacturing Initiative.

Scientists at the national weapons laboratories could work with high-technology companies and key manufacturing industries on concepts and pilot projects to restore international leadership to America. For example, they might find an answer, using computer-driven lasers, to the vexing problem of making new gauges for each new factory product, which can account for 30 percent of the cost of retooling a production line.

The proposed US space station is another challenging project that would allow military contractors to continue a similar type of work in a non-military area without a major cultural shift. It is possible that an orbiting research platform will make significant long-term contributions to our economy by someday beaming down to earth solar energy by microwaves, for example, or allowing biotechnological manufacturing not possible in a gravity environment.

Those who do lose jobs could be offered comprehensive outplacement services. Industry has found that high-quality outplacement support can reduce the impact of contract cancellations by helping people find new jobs or new careers more quickly. Where defense layoffs create major areas of unemployment, special centers for career transition management could be established.

Finally, the government can reuse closed military bases and unneeded weapons plants for activities already in its domain - education, health, and crime reduction.

A new municipal tenant under an Alternative Base Use Program might be a vocational education center, community college, prison, or a long-term care facility for the sick. Any of these would bring jobs to distressed areas.

Rather than wasting huge sums on unrealistic economic conversion programs, these practical, carefully directed programs would provide jobs to displaced defense workers and give politicians the courage to make desperately needed budget cuts.