By: Alex Gary
Rockford Register Star
From playsets and paper towels to jet fighters, Rock River Valley contractors have their fingers in a lot of military pies.
So there has been understandable concern since President Barack Obama unveiled a long-term military spending plan in early January that would trim $487 billion from defense budgets from 2013 through 2021. His plan calls for a smaller military more dependent on technology and counterinsurgency programs to keep the peace worldwide.
The Center for Security Policy, a nonprofit group formed in 1988 to support escalating military spending, said Obama’s plans amount to “a 9 percent cut, at a minimum” and calculated in dollars what that would mean to counties and cities that are home to military contractors.
For the Rock River Valley, the center believes the cuts would cost the area more than $14 million in business this year based on its 2010 contract totals.
That sounds like a lot, but consider: The gross metropolitan product of Boone and Winnebago counties was $12.5 billion in 2010, according to the Bureau of Economic Analysis. That was up 3.5 percent from 2009, the gains coming mostly from the area’s manufacturing sector.
“We do a lot of special applications for the military. For us, it probably won’t have a major impact,” said Tim Helle, president of Bourn & Koch, a Rockford-based manufacturer and rebuilder of machine tools. “Of course it will be felt, but it won’t have as big an impact as it would have two years ago when there was little business of any kind.”
Bourn & Koch won more than $3.4 million in military contracts from 2006 through 2010, according to the websitegovernmentcontractswon.com, which tracks military spending. Most of that, $3 million, came in 2009 and 2010. According to the website, 170 different companies in Boone, Ogle and Winnebago counties have done some kind of military work since 2000.
Brent Johnson, owner of Midwest Aero Support in Machesney Park, is much more concerned. Midwest Aero manufactures electronics for airplanes and made a major push into defense work. After not winning any defense contracts in 2007, 2008 or 2009, according togovernmentcontractswon.com, the company landed nearly $950,000 in 2010.
“About 18 percent of our turnover is manufacturing, and 90 percent of our manufacturing work is for the military,” Johnson said of his company, which employs 27 people.
“We have had some new business fall into our lap, and we’re investigating the rail industry,” Johnson added. “But we’re already losing a bunch of work from the American Airlines bankruptcy. If they cut the military budget, it’ll be a double hit.”