* Congress could force up to $600 bln in additional cuts
* Industry raises national security, economic concerns
* Executives meet with Defense Secretary Panetta
(Adds pentagon testimony, industry experts on cuts, Panetta
By John Crawley
WASHINGTON, Sept 14 Defense contractors
launched a broad lobbying campaign on Wednesday to drum up
public support for holding the line on U.S. military spending
Alarmed at the prospect of Congress dictating steep new
reductions on top of more than $350 billion in cuts already in
the pipeline from Pentagon streamlining, contractors based
their urgent appeal on economic as well as national security
Industry lobbyists are highlighting the role of small
business in aerospace production and asking the general public
to contact lawmakers directly to support their position.
"Our position is: no more," Marion Blakey, chief executive
of the Aerospace Industries Association trade group, told a
news conference on the stepped-up lobbying effort. "Defense has
been cut to the bone. We are there already."
Boeing Co (BA.N); engine maker Pratt & Whitney, a unit of
United Technologies Corp (UTX.N); and other companies under the
AIA umbrella are looking to create general awareness about the
potential impact of extended spending reductions.
A congressional "super committee" on deficit reduction is
trying to find at least $1.2 trillion in budget savings over
the next decade.
The worst-case scenario coming out of the panel by year's
end -- if it cannot reach agreement on additional cuts -- would
be an additional defense cut of up to $600 billion over the
Industry calls this possibility "draconian." Senior U.S.
civilian military officials, including the nominee for the
Pentagon's No. 2 post, Defense Undersecretary Ashton Carter,
told the Senate this week that cuts "over and above" the level
already in the works would be devastating.
Beyond traditional lobbying that includes CEO visits to
"super committee" members this week, the AIA trade group --
which also represents Lockheed Martin Corp (LMT.N), General
Dynamics (GD.N), Northrop Grumman (NOC.N) and others -- is
launching a grass-roots strategy.
In addition to national security, the contractors are
drawing attention to the connections between the industry to
the economy and small business, highlighting the impact on
communities and working families.
The defense industry has taken its issues to the public
before, but those efforts centered on decisions impacting
specific regions. It has done little previously to promote its
message on the national economy.
Blakey said defense companies will try to reach out to
every member of Congress, and is encouraging the public to do
The industry, according to figures compiled for AIA,
directly employs more than a million people in the United
States and affects nearly 2 million additional jobs.
Defense companies benefited enormously from a run-up in
military spending over the past decade and face a tougher
future. Some defense experts contend the Pentagon's budget has
become bloated and could absorb as much as $1 trillion in total
budget cuts over the next 10 years. This includes the $350
billion already in the works.
But Blakey said aerospace companies were "fragile" and are
now cutting jobs.
Jim Albaugh, chief executive of Boeing's commercial
aircraft division and AIA chairman, said potential job losses
associated with the cuts under consideration could add about 1
percentage point to national unemployment over 10 years. The
U.S. jobless rate is currently 9.1 percent.
The group met with Defense Secretary Leon Panetta on
Wednesday, which the executives characterized as a productive
discussion. Panetta underscored the importance of maintaining
the skills and capabilities of the defense industrial base as
well as continuing to invest in research and development, the
companies and a Pentagon spokesman said.
Defense company executives have met or plan to meet with as
many super committee members as possible, including Senator Jon
Kyl and Representatives James Clyburn and Pat Toomey.
The AIA gave an award this week to super committee member
Senator Patty Murray, who represents Washington state, where
Boeing's main aircraft assembly operations are based.
(Editing by Gary Hill and Tim Dobbyn)