Count Bell Helicopter Chief Executive John Garrison among those sounding the alarm about the likely consequences for the aerospace and defense industry and its employees if Congress doesn't act by early January to block automatic spending cuts from taking place.
Budget sequestration "in my opinion equals devastation," Garrison said Tuesday at the Aviation and Aerospace Industry Manufacturing Summit being held in Fort Worth.
Sequestration is the legislative term for the process that wil require the federal government to slash $1 trillion or so -- about $100 billion a year -- from projected spending over the next decade.
If Congress can't come to an agreement on new budget and deficit reduction bills.the automatic $100 billion a year in spending cuts are due to go into effect in January. The cuts by law must be distributed equally between defense and non-defense budget items, except entitlements which are exempt.
"it's a horrible way to set policy," Garrison said."It's going to affect engineering. It's going to affect manufacturing. And it's going to have downstream effects" on the companies that supply Bell and other defense contractors.
Defense contractors and industry groups have ringing alarms bells for months about the impact they say sequestration will have on businesses, jobs and the economy.
The initial impact on Bel would likely be small, Garrison said, because the company has contracts and funding on V-22 aircraft and military helicopters through 2015.
"I'd like to believe the federal government isn't going to break contracts and this will be worked out going forward, Garrison said, but it's still a poor way to run the government.
Bell has been given virtually no guidance on how sequestration would be implemented. "The guidance we've been given is what Secretary Panetta said, that sequestration is not something that's going to happen," Garrison said after his speech.
In the meantime, Bell is working with the hope and as if the political issues will be resolved. "We're continuing to sign contracts" with DoD and the military, Garrison said. "We're continuing to negotiate as Bell-Boeing on the V-22 multi-year contract."