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Contractors appeal for no more military cuts

An Osprey with U.S. Defense Secretary Leon Panetta aboard prepares to land in New York
An Osprey with U.S. Defense Secretary Leon Panetta aboard prepares to land in New York

By John Crawley

WASHINGTON (Reuters) - Defense contractors launched a new lobbying campaign on Wednesday to drum up public support for holding the line on U.S. military spending cuts.

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 grounds.

The industry is enlisting small business to spread the word and asking the general public to contact lawmakers directly in support of its 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; engine maker Pratt & Whitney, a unit of UTX Corp; and other companies under the ATA 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 panel is weighing up to $600 billion in additional cuts in military spending, a price the industry calls "devastating" and "draconian."

Beyond traditional lobbying that includes CEO visits to "super committee" members this week, the trade group -- which also represents Lockheed Martin Corp, General Dynamics, Northrop Grumman and others -- is using a grass-roots strategy.

In addition to national security, the contractors are drawing bright lines from the industry to the economy and small business, highlighting the impact on communities and working families -- the boilerplate rhetoric of politicians.

The industry has taken its issues to the public before, but those efforts centered on decisions impacting specific regions. It has done little to promote its message on the national economy.

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 several years and faces a tougher future. 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 percent to national unemployment over 10 years. The U.S. jobless rate is 9.1 percent.

The group met with Defense Secretary Leon Panetta on Wednesday, which the executives characterized as a productive discussion.

"We're really reaching out to every member of Congress that we can," Blakey said, adding that they also want the public to contact lawmakers.

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 Senator Patty Murray, who represents Washington state, where Boeing's main aircraft assembly operations are based.

(Editing by Gary Hill)

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