Cedar Rapids, Iowa News, Sports, and Weather
Defense Cuts Could Impact More Companies Than Rockwell-Collins
By Dave Franzman, Reporter
CEDAR RAPIDS, Iowa - Looming budget cuts affecting defense spending could pack quite a local punch. Congress must decide on a budget plan, or those cuts automatically begin after the first of the year.
Rockwell-Collins in Cedar Rapids has already warned about the potential impact. Last week, company leaders disclosed that up to 1,000 more layoffs may be needed sometime next year to balance business levels with employment. And 300 jobs out of that total would be directly related to defense spending cuts, if it indeed does happen.
Rockwell-Collins is certainly the largest, but not the only company, with an economic stake in the defense spending battle. And there are much, much smaller companies with a lot to close if Congress can't agree on a budget plan.
One example in Cedar Rapids is J-TEC. That company has one big product it's sold to the Army for decades. That's a crosswind sensor used on the Army's Abrams main battle tank and some older tanks as well. The company employs only 13 people now. But half of those jobs depend on the defense work that comes into the shop.
Owner Gary Roling said J-TEC is a small company with a big stake in the budget battle.
"We could see the volume of the crosswind sensors go down to almost nothingmaybe for some period of time," Roling said.
J-TEC has ridden the roller coaster of defense spending cuts before. In 2007 and 2008, more than 30 people worked at the company. But significant defense cuts after the recession started hit hard and layoffs were the result. Roling said that's likely to happen again if Congress can't end the budget battle although he's not exactly sure yet how many.
Roling said he tries to keep production workers up on all the budget ins and outs so they know where they stand.
One worker, Susan Thomas, admits it's sometimes hard to keep your mind on work when you wonder if you'll have a job in a few months.
"It all effects the economy and if you don't have a job, you can't pay your bills or buy groceries and so on," Thomas said.
J-TEC has its own contract with the military independent of the defense business done by Rockwell-Collins. But many smaller companies subcontract or supply the Cedar Rapids-based avionics company. And Rockwell-Collins does business with an estimated 800 companies throughout Iowa. So if there are massive defense cuts next year, a lot of Iowa companies may feel the pain.