Several companies with military contracts in the area are facing hardship due to the drawdowns. And some experts say the effects on those companies and others like them across the state will be felt throughout the economy.
“It will have a significant impact,” said Robert Robicheaux, chairman of the department of marketing, industrial distribution and economics at the University of Alabama at Birmingham. “Certainly, we’re going to see a decline in direct contracts from the military and related military buyers.”
According to the Alabama Department of Economic and Community Affairs, BAE Systems in Anniston began laying off 155 employees in December. BAE Systems is the world’s second-largest defense contractor and has two facilities in Anniston that repair armored vehicles.
“The reductions in workforce are a result of the current economic climate and the sharp decline in defense spending, which has required us to align and adjust our workforce in order to meet existing production requirements,” Shannon Booker, a BAE spokeswoman, wrote in an email to The Star. “We have reduced our employee count by 66 people since last December in Anniston.”
Booker added that BAE still has 394 workers in Anniston.
ADECA also reports that another company, G4S Government Solutions, began laying off 57 of its Anniston employees in June. The agency reports that company, which provides security personnel, had a contract with the depot.
A third local company with federal contracts, Science Applications International Corporation or SAIC, reported to ADECA that it planned to lay off 134 Anniston workers starting in July. However, the company recently had its contract extended despite federal cutbacks. The company is offering training to workers at FEMA’s Center for Domestic Preparedness.
“Since we did not know what the result of the contract competition would be, we issued layoff notices to potentially impacted employees on the contract,” said Melissa Koskovich, vice president of corporate media relations for SAIC. “SAIC recently learned that we will be awarded the follow-on contract for this work and we do not anticipate a mass layoff.”
The depot has had its share of ups and downs regarding layoffs in recent months. In January, depot officials announced more than 562 short-term depot workers would lose their jobs once their contracts expired later in the year. However, new work from the National Guard, the Army Reserve, Saudi Arabia and Iraq has insured that about 386 of the 562 workers will keep their jobs through at least March. The depot employs about 6,000 people.
In addition, many workers have lost their jobs or will soon lose their jobs as final efforts are made to close the Anniston chemical weapons incinerator. According to incinerator contractor Westinghouse Anniston, the company downsized its work force by approximately 100 positions over the last year through attrition, transfers of employees to other sites and voluntary departures. It also released 28 people from their contracts in April.
There are still approximately 696 Westinghouse Anniston employees at the incinerator, completing various jobs such as decontamination, dismantling and demolition at the facility. There are also about 100 people working in oversight and quality control capacities. The incinerator once had more than 1,000 workers to destroy all the chemical weapons stored at the depot since 1963.
Robicheaux said cutbacks at companies and military bases around the state will eventually be felt throughout the economy.
“We will see shrinking in housing buyers and grocery sales,” Robicheaux said.
Nathan Hill, military liaison for the Calhoun County Chamber of Commerce, agreed that military cutbacks will eventually be felt in the private sector.
“As defense dollars go down, dollars in the private sector go down,” Hill said.
Hill noted that there are an estimated 23,000 jobs indirectly related to the depot, many of which could be affected as more jobs disappear at the facility.
Greg Canfield, secretary of the Alabama Department of Commerce, noted however that due to the length of many military contracts, the effect from cutbacks will not be felt immediately.
“Most of the industry we have in the state that are tied to defense contracts for weapons and defense … most of those contracts are long-term in nature,” Canfield said.
Star staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star