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North Carolina defense industry hit especially hard by coming budget cuts

By Catholic Online (NEWS CONSORTIUM)
January 18th, 2013
Catholic Online (www.catholic.org)

North Carolina, the home to seven major military installations and thousands of servicemen and women, is preparing for the worst this coming March 1. That's the deadline for Congress to strike a deal in order to avoid #1.2 trillion in automatic spending cuts. Much of that is expected to include drastic cuts for the U.S. military. Many companies have already begun to lay off workers and cancel contracts, prompting some here to say the hatchet to fall "is already here."

LOS ANGELES, CA (Catholic Online) - The North Carolina Defense Business Association (NCDBA), expects the cuts to be devastating. The association projects more than 34,000 jobs cut and more than $1 billion in state gross losses.

Defense spending cuts were originally set in motion as a product of the 2011 debt-ceiling deal. Lawmakers expected to spread the cuts around, but have been unable to. Lawmakers elected to merely push off the cuts for two months.

This was of little help to those in the local defense industry. NCDBA Executive Director Joy Thrash said avoiding the fiscal crisis on Jan. 1 and pushing the deadline further into this year has only confused her members even more.

"They were hoping at the beginning of the year that they could start fresh. But now it's two more months and they are wondering how are they going to survive," Thrash says, who is already hearing of layoffs and cutbacks across the state. "So, for the idea that this is going to happen in February or March, that's a false idea. It's already happening."

While private businesses are used to ups and downs in the economy, Chief Operating Officer Jim Lynch with K2 Solutions says that the automatic spending cuts coming in March in Washington are something completely different.

"What we don't understand is when cuts are arbitrary, as they are with sequestration," Lynch says. "We don't know what's going to be cut. Nobody knows. There is no plan. What successful business today has been successful without a plan?"

K2 Solutions is a company that provides special operations support, canine training and logistics to the Department of Defense. The firm has already invested money and resources in anticipation of future projects. The looming budget cuts have now left thee plans in limbo.

Getting federal lawmakers to understand that uncertainty and delays are bad for business is the chief concern for Thrash. She has been lobbying most of North Carolina's congressional delegation to get something done before the fear of the unknown kills any more business.

"I share the frustration of our North Carolina business owners whose contracts with the Department of Defense have been held up or delayed because of uncertainty over sequestration," Sen. Kay Hagan, D-N.C., who sits on the Senate Armed Services Committee, in a written statement to Fox News said. "Indiscriminate cuts are not the way to reduce our deficit, and kicking the can down the road is not the way to provide certainty for our small business owners who want to do business and grow their companies."


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