Md. pays a price for Pentagon budget cuts Layoffs loom as effects ripple through economy

January 13, 1991|By Ted Shelsby

It sounds like equipment that commanders would like to have in the Middle East: an electronic system that automatically identifies fast-approaching jet fighters as friend or foe.

But the multibillion-dollar Mark XV military aircraft identification system that was being developed by engineers at the Towson-based Bendix Communications Division of Allied Signal Inc. may never be built.

The Air Force, succumbing to Pentagon budget pressures that have become even more intense since the threat of war in the Persian Gulf, has canceled the Mark XV program after an expenditure of hundreds of millions of dollars by the Air Force, Army and Navy.

This is not the first time the communications system, which was expected to bring about 750 new jobs to the Bendix plant, has been on the outside of the budget looking in. But this time, Representative Helen Delich Bentley, R-Md.-2nd, one of the program's biggest supporters, is not as optimistic about the chances of having the decision reversed.

"I've talked to the powers [that] be at the Pentagon," Mrs. Bentley said late last week, "but I'm not too sure we'll be able to save it this time." She said the Air Force is adamant about its decision on the Mark XV because of the tough budget situation and the cost of Operation Desert Shield.

Mrs. Bentley said she and Bendix officials have not given up on the Mark XV, but she conceded it could be more difficult this time around. "It's coming at a very tough time in the budget process," she said.

Bendix officials have said that if the Mark XV program is not reinstated, the Towson plant might lay off as many as 300 workers.

Times also are tough for some other programs -- ranging from fighter planes to uniform jackets -- and the impact will be felt by other companies in the state.

The A-12 is another example. Although budget concerns were not the only factors considered by Secretary of Defense Dick Cheney in scrubbing the Navy attack-plane program last week, coming in at $1 billion over budget at this early stage of development did nothing to increase its chances for survival.

It is difficult to track the full economic impact of the cancellation of the A-12 program -- security precautions even prohibit the prime contractors from releasing a full list of subcontractors -- but there are already signs that a number of Maryland companies will be affected.

The Westinghouse Electronic Systems Group, adjacent to Baltimore-Washington International Airport, notified workers last week that as many as 1,200 of them might lose their jobs as a result of the cancellation. Westinghouse was to make the main radar units and an infrared system that uses sophisticated electronic optics and heat sensors in detecting targets. The work was expected to total more than $3 billion in new business over the decade.

The suffering doesn't end there. Had work on the bat-winged attack plane reached the testing stage, it would have been done at the Patuxent River Naval Air Station and have involved about ** 600 workers.

The Amecom division of Litton Systems Inc. in College Park also has a part of the A-12 project. Amecom had a contract to build electronic equipment that would have been used to detect and identify other electronic signals, such as those transmitted by another plane or anti-aircraft missile. John Georg, a spokesman for Amecom, called the A-12 work a "major program" for the company and said Amecom is still trying to determine whether layoffs will be necessary. The company has about 1,000 workers at College Park.

Ridge Engineering Inc., a small machine shop in Hampstead, is a good example of the ripple affect of the A-12 cancellation. David Tracey, president, said last week that he may have to lay off a few of his 85 workers if new work cannot be found over the next month or two to replace the company's A-12 related contracts. In better economic times, Mr. Tracey said, it would be easier to compensate for the loss of the work.

August Piccinni's East Baltimore company is another example of how widespread the Pentagon spending cuts are in Maryland. Mr. Piccinni is president of Maryland Clothing Manufacturing Inc., which makes dress uniform jackets for the military.

"They're killing us," he responded when asked about the impact of a cut in defense spending. He said many of his competitors also were hurt "real bad" when the Pentagon trimmed $200 million from the uniform procurement budget last year.

In his case, the cut resulted in a loss of about 50 percent of his uniform business, Mr. Piccinni said. He said he has been fortunate, however,in finding other markets, including making coats for civilians and producing jackets for PX outlets on military installations, that allow him to retain his work force of about 110.

Coats for the PX's, he said, are made of a different material from the regular-issue jackets, and those contracts don't come directly from the military.

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