BAE Systems, suppliers warn of fallout from Bradley shutdown

By Andrea Shalal-Esa

WASHINGTON, April 23 (Reuters) - Executives from Britain'sBAE Systems and dozens of companies that build partsfor BAE's Bradley Fighting Vehicle rallied in Washington thisweek to lobby for U.S. Army orders they say are needed to keepthe Bradley production line open.

The companies argue that the Army's plan to temporarily shutdown the production line in York, Pennsylvania could cost nearlyas much -- or more -- than maintaining the line by upgradingolder Bradley vehicles to a newer configuration.

Pressure on the Army has mounted after across-the-board cutsknown as sequestration took effect in March that will force thePentagon to cut its proposed fiscal 2013 spending by another $42billion.

"We're not advocating to build equipment or vehicles thatare not needed," said Alice Conner, director of manufacturingintegration and deployment for BAE Systems.

"But there are critical skills that are very unique to thedefense industry. Once they go away, it will not be easy toreconstitute. There is a price to pay."

BAE and other large weapons makers have argued formaintaining the capacity to build large combat vehicles, notingthat the industrial base is fragile. Shuttering the Bradley linecould drive many suppliers out of business or into othersectors, they say.

Conner said the Bradley line, which accounts for 60 percentto 80 percent of the work done at the York facility, would beginto shut down in mid-2014 unless the Army accelerated its plansto convert some older Bradleys to newer configurations.

Congress has added $140 million to the Army's fiscal 2013budget to pay for the work, but the Army -- which faces a bigshortfall in operating expenses -- does not plan to begin workon those Bradley upgrades until fiscal 2015 and 2016.

BAE estimates that restarting the plant could cost up to$750 million.

In the meantime, BAE has consolidated facilities and laidoff workers, while scrambling to secure foreign orders and otherwork for the plant. Conner said "a little bit of latitude" inthe Army's plans would help secure 1,200 jobs at the plant,where BAE is already building next-generation prototypes.

Will Donnellan, vice president of a family-owned business inMassachusetts that builds cables for the Bradley vehicles, saidhis firm had already laid off 30 people, cutting its staff to 80, but further job losses were likely unless the Army acted.

-1x Boeing