Mount Vernon Mills in Trion, Meggitt Polymers and Composite in Rockmart, and American Apparel in Centre all have large military contracts that are likely to be impacted by significant military cutbacks.
Mount Vernon Mills and Meggitt Polymers each have nearly 1,200 employees and are overwhelmingly the leading employers in Chattooga and Polk counties. American Apparel has approximately 300 employees at its Centre plant and is among the top five employers in Cherokee County.
President Barack Obama, Secretary of Defense Leon Panetta and Joint Chiefs Chair Gen. Martin Dempsey all conducted briefings last week to address a significant shift in military strategy that would likely result in the fewest boots on the ground since the beginning of World War II, along with massive cuts to the Air Force as well as both Army and Air Reserve and National Guard.
Both Dempsey and Panetta have indicated that cuts could easily exceed $475 billion during the next decade.
Mount Vernon Mills and American Apparel are both manufacturers of uniforms for the military, while Meggitt makes fuel cell bladders that are used by a variety of military aircraft.
Rep. Phil Gingrey, R-Marietta, said that with respect to the defense industrial base, there are several companies in Northwest Georgia that are critical to U.S. security.
“I will continue to work toward enacting substantial reforms to our country’s spending habits, including the enactment of a Balanced Budget Amendment, without sacrificing the security of our nation,” Gingrey said.
Greg Williams, vice president of sales and marketing at Meggitt Polymers and Composites in Rockmart, said that certainly it is going to be a little tricky during the next few years for military and defense contractors.
“But we do not have a gloom and doom story here in Rockmart. It’s actually a very good news story, as sales and employment will continue to increase over the next five years,” Williams said. “The technologies we’re producing and developing, in ground and aerospace, do save lives, and despite cuts in the defense budget the government and Meggitt share a common objective to protect our most precious resource, the soldier.”
Michael Paulk, director of new programs at Meggitt, said the lion’s share of business for the plant in Rockmart involves the support of rotary wing assets (helicopters) in the Department of Defense.
“Those rotary wing assets are heavily utilized whether it is combat or peace time,” Paulk said. “We are showing in 2012 a continued growth pattern that we’ve shown for the last 10 years.”
Beyond the fuel bladders, Williams said Meggitt is developing a product, which neither he nor Paulk could disclose for competitive reasons, and he hopes to get a contract announcement within a matter of weeks for that new product.
“That’s another way we plan to weather these cuts,” Williams said.
Getting that one contract alone could mean another 50 jobs for the Rockmart plant.
Don Henderson, Mount Vernon Mills’ vice president and general manager, said military contracts account for perhaps 4 to 5 percent of the business at the huge mill in Trion.
The mill makes camouflage uniform fabrics for all branches of service, some of which involves fire retardant materials.
“If they have a huge reduction in force, then it certainly would affect us,” Henderson said. “I don’t think we, at this point, have put a number or an estimate to that.”
Henderson said Mount Vernon Mills has been in and out of military contracts through the years.
Jim Hodo, president of American Apparel, said it is reasonable to anticipate that reductions in defense spending will have an impact on defense contractors.
“We’ve taken steps to diversify our business to try to protect against that as much as we can,” Hodo said.
The company is currently in the process of closing one of its six plants, in Fort Deposit, Ala.
“What has had a much greater impact on us is this administration has taken a very strong position as far as trying to determine outcomes. They set aside large portions of the business for various groups,” Hodo said. “The administration has probably reduced the amount of work available to be competed for by about half, prior to any defense cutback, which has had a much greater impact on our business than any anticipated defense cutbacks.”
The plant in Centre is primarily involved in the production of all-weather coats for the armed forces.
“We’re certainly at a reduced level right now. I would say we’re probably at half of our maximum level,” Hodo said.
Both the Army and Marine Corps have already anticipated cuts, which will likely create smaller forces by 2015. The Obama administration nor the Pentagon have offered any new specific numbers related to the latest proposed cuts.
Similarly, officials in Washington have not speculated about what kind of impact additional troop force reductions would have on the economy when tens of thousands of soldiers are returned to the civilian workforce.