Defense Industry CEOs: Warnings Of Apocalyptic Cuts ‘Overblown,’ Could Be Counterproductive

The defense industry has so far mounted an allout campaign to avoid sequestration, the military spending cuts that will come into effect on January 2, 2013 — an estimated $55 billion per year — if lawmakers fail to strike a budget deal in accordance with last year’s Budget Control Act. The industry boosted lobbying expenditures and sent CEOs before Congress to warn against potential cuts. But some experts pushed back against the dire warnings as self-interested hype.

Now, the skeptics are getting a boost from an unlikely source: other defense industry CEOs. Defense News reports that some military contractor executives are preparing to deal with the consequences, which they seem to view as the sort of standard obstacles any business might face.

Some of the executives only spoke anonymously because of the campaign being waged by some of the more outspoken CEOs and the industry lobby, the Aerospace Industries Association (AIA). Defense news reported:

[T]he magnitude of the cuts — millions of jobs, according to the AIA, and the industry’s destruction — is overblown, according to several senior industry executives. Even some of the declarations about the complete lack of guidance on how sequestration would be implemented are excessive, one senior executive said.

“It’s not that complicated,” the executive said. “There’s a little drama being played out. There’s a little fire for effect being played out.

The warnings about cuts are “overblown”: the Congressional Budget Office found that, even after the cuts mandated by sequestration, the defense budget would still be larger than it was in 2006.


Others executives went on the record, discussing the cuts in non-apocalyptic terms as an ordinary slow-down of business. The head of Raytheon, William Swanson, acknowledged that some jobs might be lost, but relayed his experience from the last slump in the defense industry:

I’ve lived through this. The light at the end of the tunnel is not a train. I’m not a person who says, ‘Oh woe is me.’ When you look at this situation, I understand the danger, but there’s also an opportunity. And the smart companies, smart leaders, smart businesspeople know how to take advantage of opportunities.

One executive even wondered if all the industry doomsday hype around spending cuts wasn’t bad for the industry, suggesting that the campaign, as Defense News put it, “may undermine talent retention.”

Current and former Republican politicians have made every case for maintaining military spending at high rates, at times abandoning their own talking points and scare-mongering about forthcoming wars. But their own constituents support cuts.