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Sequestration complication


by: TRIBUNE PHOTO: DOUG BURKHARDT - AMMCON employee Tommy Brower, a highly-skilled welder with U.S. Navy certification, is among those whose job may be on the line due to cutbacks in defense spending that took effect on March 1. Don’t count Darrell Grow among the 15 percent of Americans who, according to a recent poll from Gallup, approve of the job Congress is doing.

Grow, the chief operating officer of Hillsboro-based Advanced Manufacturing and Marine Concepts (AMMCON), is concerned that several employees of his business may soon be out of a good job. That’s thanks to the inability of the White House and Congress to figure out a way to restore $85 billion in across-the-board budget cuts — known as “sequestration” — that took effect on March 1.

AMMCON makes parts for the U.S. Navy’s submarines and aircraft carriers, and defense cuts forced by sequestration are expected to hit aircraft carrier construction and maintenance programs. As a result, there could be a direct hit on jobs in Hillsboro.by: TRIBUNE PHOTO: DOUG BURKHARDT - Parts for aircraft carriers are an essential element of AMMCON€sˇÃ„ôs business.

“The carrier and submarine programs, combined, account for half of our annual sales,” Grow said. “The balance of our business is related to manufacturing components for heavy equipment and pump manufacturing. Any delay or cuts in funding for the program will have a direct impact on our business and our employees’ jobs.”

Grow said he wasn’t interested in assigning blame for the latest fiscal crisis in Washington, D.C., but his impatience level is sky-high.

“My personal opinion is that both parties need to negotiate for the best interest of the country,” Grow pointed out. “Both parties agree cutting in this fashion is a bad idea, but they are unwilling to take serious steps to solve the problem.

Delaying the overhaul of an aircraft carrier — a multi-billion-dollar ship critical to our national defense — is a very short-sighted and poor decision.”

Strong military

Employees at the AMMCON plant, just north of Highway 26 on West Union Road, expressed worry about their jobs as well as frustration with the politics of the federal government.

“I’m concerned, obviously,” said Ray Berovic, a machinist who has been with the company for 20 years. “It could affect our jobs. Not only that, but our national security also. That’s a big concern of mine. I feel very strongly that it’s very important to have a strong military.”

Berovic said the federal government could find other areas to cut that would not have such devastating impacts on employment and military readiness.

“I’d like to see the government, on both sides, work together without butting heads,” said Berovic. “This has been steady employment for me, and I’d hate to see people lose their jobs. Anybody not worried should be.”by: TRIBUNE PHOTO: DOUG BURKHARDT - Ray Berovic, who has worked as a machinist for AMMCON for 20 years, believes the defense cutbacks that went into effect on March 1 not only threaten local jobs, but also could weaken the nation€sˇÃ„ôs security. Hillsboro Tribune Photo:  DOUG BURKHARDT

AMMCON, which has been in business since 1973, currently employs 45. If the current cutbacks stand, many of those employees could lose their livelihoods, and Grow said the sand in the hourglass was running out.

“If Congress does not restore funding, we will definitely have to cut staff,” Grow explained. “The news on Feb. 8 that the overhaul of the USS Abraham Lincoln would be delayed is placing jobs in jeopardy. Since that decision was announced, additional contracts we expected to receive have been delayed indefinitely. We currently have enough business to maintain our work force for approximately six weeks at current levels before layoffs will be necessary.”

“We could lose 25 percent of our staff is my guess. About 10 people,” said Randy Grow, AMMCON’s vice president. “The military orders have always been a constant and a buffer, but the backlog is no longer there. And if we get to the point where shipyards close and dismantle — to try to get that back again? I don’t know how you would get that back.”

Darrell Grow added that the heavy-handed budget slashing could have a counterproductive effect, and end up costing taxpayers even more money in the long run.

“Our company is one of more than 2,000 suppliers in this country that support aircraft carrier construction. These suppliers have unique and critical skills that are in jeopardy,” he said. “For example, we have Navy-certified welders. To become certified, you need to be an exceptionally skilled welder, and then you must pass a multitude of tests that take months to perform and tens of thousands of dollars to certify.

“If we have to lay off these welders, critical skills will be lost. And when the Navy does decide to continue the program, they will experience delays and increased costs.”

Orders down

Tom Lingelbach, AMMCON’s welding foreman, said he has already seen a downtick in orders because of doubts about whether funding will be available in coming months.

“Our orders are way down,” said Lingelbach, who has been with AMMCON since 1997. “We usually don’t see orders this slow until December. Even our commercial business has slowed down. This has created so much uncertainty.”

Lingelbach said some of his welders who have been certified to weld for the Navy have been put to work on commercial jobs — which they are overqualified for.

“It takes so long to get someone certified for military welding, and I don’t know how long we can keep them working,” Lingelbach said.

U.S. Rep. Suzanne Bonamici (D-Ore.), who represents the congressional district that includes Hillsboro, blasted her fellow representatives for their inability to work toward a responsible solution. She warned of serious economic impacts to the state and to the district she represents if funding is not restored.

“Once again, Congress’ failure to do its job may lead to thousands of Oregonians losing their jobs,” Bonamici said. “Oregonians don’t want to see partisan battles. Families throughout our state continue to struggle because of lagging economic growth, a lack of jobs and underfunded schools.

“They sent us here to fix these problems, but instead Congress has become the problem.”

Randy Grow said he is disgusted with the inaction he’s seeing in Washington, D.C. “Everything has to be a partisan fight,” he said. “It’s ridiculous. It’s kindergarten.”

Dan DeHaven, a machinist with AMMCON for the past 13 years, put the ongoing partisan battles in the nation’s capital in perspective.

“We have to cut something, but there are places to cut without leaving an aircraft carrier sitting unfueled,” DeHaven said. “It seems like they want to do that to see how I’ll vote. It’s stupid. It’s a 2 percent cut, which we can afford, but do it in the right areas. Don’t make everybody bleed just to prove your point.”