How Sequestration Slams Small Business

George Hill is president of Advex Corporation, a company based in Hampton, Virginia and a member of the Aircraft Carrier Industrial Base Coalition (ACIBC). Unless Congress acts to change the existing law, sequestration will automatically cut $1.2 trillion from the President’s budget over the next decade-including $492 billion from military spending. These cuts threaten one of the most critical elements of our economic recovery: private sectors investment in upgrading and purchasing new technologies and equipment. These investments are the engines of a strong recovery, the hiring of workers, and a continued commitment to a skilled workforce. Advex Corporation, and many companies like ours, have invested in new technologies and equipment that will allow us to provide quality parts and services for the Gerald R. Ford-class aircraft carriers, the next generation of US Navy carriers currently under construction at Huntington Ingalls Industries’ Newport News Shipbuilding. Advex is a primary supplier of structural fabrications, ventilation, and precision machined components used in the construction of the Ford class. We have dedicated approximately 70% of our current personnel to these efforts. Based on our belief that the construction of these new technologically advanced aircraft carriers would continue uninterrupted for several years, Advex Corporation has over the last two years invested in the modernization of our facility and production processes. In 2011, our company spent in excess of $1.2 million in facility and equipment upgrades and increased personnel by 14%. In the first quarter of 2012 the Advex Board of Directors authorized a facility expansion program over the next three years in excess of $4 million. This expansion program has already started with the procurement of three significant pieces of machining and cutting equipment and with facility improvements that are in excess of $1.4 million. So far in 2012, we have hired an additional 24 personnel through mid-year. This brings our total current employees to 161 personnel and we expect this will increase in the coming months. But now the possibility of significant automatic cuts to the defense budget and the impact that could have on the aircraft carrier construction program threatens the Advex investment. And it will discourage other companies from making similar investments. That could result in a loss of jobs and significantly increased prices for the labor, materials and components necessary to construct these aircraft carriers. Ultimately, these increased costs are passed on to American taxpayers. Business will only invest in equipment and workers if they can expect that the work will be there. Congress cannot allow the uncertainty that sequestration creates to continue to drag on. If our company knows that that US Navy has the funding for procurement of aircraft carriers at one carrier every five years, it ensures that we can plan, invest, and effectively control costs. However, uncertainty and disruptions in funding threaten the ability of companies to make the investments that will enable us to deliver the quantities of specialized parts these great ships require. Congress must act now to end the threat that sequestration poses to our nation’s businesses. Deep, automatic cuts to the defense budget will weaken our national security and decimate an industrial base already hurting.

Breaking Defense

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Advex Corporation

How Sequestration Slams Small Business

Posted on July 16, 2012

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