America, War Means Jobs
By Jonathan Weisman
12 May 2004
a quiet strip of gray corrugated metal buildings, across the street
from a La-Z-Boy distribution center, Gary Allen and his ever-expanding
crew are running one of the most urgent operations of the Iraq war.
Around the clock,
seven days a week, O'Gara Hess & Eisenhardt churns out heavily armored
Humvees, designed for the guerrilla combat and roadside bombs bedeviling
U.S. troops. Last August, a back-lot warehouse held excess inventory.
Now, after a $1.5 million investment, 30 new workers on two shifts produce
500 sets of three-inch-thick bulletproof glass a week. As many as 10,000
sets are on back order.
In November, the company snapped up a 40,000-square-foot building down
the road, moved its entire commercial armoring operation there and in
three days, with an additional $1.5 million, it doubled the Humvee operation.
In six months, employment
has more than tripled, to over 600, and 250 more people in this part
of southwestern Ohio work as direct suppliers. Production manager Ronnie
Carson figured he interviews 15 job applicants every day and hires 10
to 12 of them. Just yesterday, the company's parent corporation, Armor
Holdings Inc., announced it received an additional $16.6 million from
the Army to ramp up production yet again. The clocks setting the pace
on the assembly line were reset, from one vehicle every hour and a half
to one every hour and 15 minutes.
"For us, the economy is great," said Allen, senior vice president
and general manager of Armor Holdings Inc.'s Mobile Security Division.
"It's a sad situation, but . . . " His voice trailed off,
then he added, "I don't think anyone here is thinking about it
In this corner of a critical presidential-election battleground state,
the economy is surging with the urgency of a boom. But it wasn't President
Bush's tax cuts, Federal Reserve interest rate policies or even a general
economic turnaround that did the trick. It was war.
The frenetic activity is repeated all over the country. New kilns in
California bake ceramic body-armor plates. Apparel plants in Arkansas,
Alabama, Florida and Puerto Rico struggle to keep up with uniform orders.
Once-idle textile mills in South Carolina spin rugged camouflage fabric.
Army depots operate 24/7 to repair and rebuild the wreckage of war in
time to ship it back with the next troop deployment.
In the first three months of this year, defense work accounted for nearly
16 percent of the nation's economic growth, according to the Commerce
Department . Military spending leaped 15.1 percent to an annualized
rate of $537.4 billion, up from $463.3 billion in the comparable period
of 2003, when Bush declared major combat operations in Iraq over.
"That's pretty good, considering it's only 3 to 4 percent of the
economy," said Joseph Liro, an economist at the New Jersey-based
research firm Stone & McCarthy. "For one quarter, that's a
pretty big number."
It is impossible to know how many of the 708,000 jobs created in the
past three months are defense-related, since the Labor Department does
not track defense contractor employment. But anecdotal evidence suggests
the contribution is significant.
The flagging textile and apparel industry, which lost 50,000 jobs last
year, gained 2,400 in April and is up 500 through the first four months
of 2004, said Charles W. McMillion, president and chief economist of
MBG Information Services. That is the first net job gain for the industry
in the first four months of any year since 1990, the last year for which
the Labor Department maintained statistics. Since civilian textile demand
is satisfied largely through imports, "Buy American" military
orders must be driving the increases, McMillion said.
In pockets of the country, the effect is magnified greatly, as in picturesque
St. Marys, Ohio, 90 miles north of here, where a 65-year-old red-brick
Goodyear plant bustles around the clock, building the tracks for the
Army's Bradley Fighting Vehicles, supplies of which have been dangerously
depleted. Goodyear officials refused to open the plant for a visit or
even to comment on operations and employment there. Workers also would
speak about the factory only on condition of anonymity.
But over beers at the windowless Wayne Street Bar and Grill, just beyond
the plant gate, a Goodyear manager confided that at around 650, employment
is up, overtime is up and "it's humming pretty good, I'll tell
you." After a terrible lull, traffic is picking up at the bar as
well, said bartender and waitress Debra Temple.
"The economy is always helped by war. That's just a fact,"
said Gary Gayer, an appliance salesman in St. Marys.
There are economic downsides. In inflation-adjusted terms, the war's
cost will surpass the United States' $199 billion share of World War
I sometime next year. Coming on top of three major tax cuts, that spending
will drive the federal budget deficit to more than $400 billion this
year. That borrowing will eventually have to be repaid in higher taxes
or reduced government services and benefits.
Economists have long argued that war is an inefficient use of government
revenue. A dollar spent on a highway not only employs workers but also
creates a lasting, broadly shared benefit for the economy. A dollar
spent on military equipment is soon lost to enemy attack or the rapid
wear of war. If it bought a bomb or bullet, it simply explodes.
The families of thousands of National Guard members and reservists have
been dealt severe financial blows by the extended deployments of breadwinners.
husbands and wives and sons and daughters over there, and we're working
and struggling to make up for it," said Temple, noting that a new
contingent of reservists from the St. Marys area will soon ship out.
"Somebody's got to help these people."
Then there's the
constant worry that all this work will disappear as quickly as it materialized.
A machinist at the Goodyear plant, whose son drives an Army truck in
the volatile area west of Baghdad known as the Sunni Triangle, fretted
that Goodyear has put too many eggs in the military basket.
a pawn. You know that. Everybody in this community hopes like hell that
Goodyear keeps this plant here. If the military drops out, we could
be done. It's a bad deal," he said.
But for now, it's
a good deal for thousands of workers. The Red River Army Depot, near
Texarkana, Tex., has hired 400 people -- 27 percent of its current workforce
-- in the past four months to repair and rebuild wheeled vehicles laid
low by the war, said Jimmy Shull, the depot's chief of staff. Sixty
new security guards will be coming to work this month.
Co., in nearby Magnolia, Ark., lost its main customer in 2001, when
Bass Pro Shops took its business to China, said Brian Smith, the company's
vice president. Columbia nearly closed. Then came the war, and the firm's
first military contract, to sew battle-dress trousers and woodland camouflage
coats. Employment is up 30 percent over last year.
business, they needed small businesses and it fell in just right,"
Smith said. "If it wasn't for [Defense Department] contracting,
we would not be here, and 200 people would be out of a job."
Inc. of Selma, Ala., the largest military uniform supplier, is sewing
50,000 uniforms a week, said Jim Hodo, the company's chief operating
officer. To keep up with demand, the firm invested more than $1 million
to open two new plants in the impoverished Alabama towns of Opp and
Roanoke, and hired 300 workers; 150 more could be added soon.
"We had so
many minorities out of work," said Roanoke Mayor Betty Slay Ziglar.
"These people have grown up sewing in textile plants, and there
are so few now. They were desperate to have jobs, and it's going to
expand again. I am just so grateful."
For the South Carolina
textile mills supplying the fabric, the impact may have been even more
dramatic, Hodo said.
sitting down there, staring at the empty walls, wondering what was next,"
he said of his suppliers, Delta Mills Marketing Co. and Milliken &
Co. "It's been a godsend to them."
At Goodwill Industries
of South Florida, which trains and employs severely disabled people,
orders for camouflage trousers have jumped 70 percent in the past year,
said Dennis Pastrana, the organization's president and chief executive.
Within a three-mile radius of the plant, per-capita income averages
a mere $10,590 a year, but nearly 600 workers now have sewing jobs,
more than double Goodwill's prewar level.
There's no sign
that it will end soon. Hodo said military officials assured him the
buildup will last at least another year, and Allen at O'Gara Hess said
the same. The Humvee plant turned out 600 vehicles in 2002, 860 last
year, and on Thursday the last Humvee on the assembly line sported a
tag identifying it as the 890th vehicle so far this year. To get to
one vehicle every 51 minutes, as the Army wants, O'Gara Hess will have
to hire an additional 100 workers by July.
"At the rate
I'm at, all these people will be here through 2006," Allen said.
As his shift neared
its end, Don Meier, a 24-year-old still sporting an Army-issue crew
cut and an Operation Iraqi Freedom T-shirt, took a break from installing
heating and air-conditioning equipment into battle-ready vehicles he
would have loved to have had a year ago.
Back then, he was
a mechanic with the Army Reserve's 478th Engineering Battalion, ducking
mortar rounds and pulling up the rear as troops pushed toward Baghdad.
He recalled watching Pvt. Jessica Lynch and her crew set off on their
ill-fated supply mission last spring. He and his comrades were driving
basic Humvees that his plant now loads with 3,000 pounds of glass, steel
and ceramics to protect the soldiers who followed him to Iraq.
When Meier returned
home -- on July 26, 2003, he said with relish -- he first found work
stocking shelves at an AutoZone store. Then a friend told him that O'Gara
Hess was hiring at $11 an hour, with full benefits. He might get to
meet acting Army secretary Les Brownlee or Gen. Paul J. Kern, commander
of the Army Materiel Command, on their frequent plant visits.
"It's a regular
job to pay my bills with," Meier said, "but at the same time,
I know if you get one of these vehicles, you're well off."
Bo Gilmore, another
former military man, said: "To be able to do something like this,
protecting our troops, that's invaluable."