Everyone is feeling the pinch in these trying times, even some corporations which are normally the beneficiaries of the Military Industrial Complex. The WSJ is reporting that one of the premiere companies, Northrop Grumman Corp is closing one of its seven ship-building plants and might even sell the rest or spin them off.
This is mainly due to the Pentagon cutting back and building more, smaller military platforms. The situation is such that, apparently, everyone has to make sacrifices, even our vaunted military. Northrop is the navy’s third largest supplier of submarines, destroyers, and aircraft carriers.
Northrop shipyards are located in Mississippi, Virginia, and Louisiana and the company has a population of some 40000 employees, and had sales of $6.2 billion last year alone. As if Louisiana hasn’t suffered enough, Northrop is closing the yard in Avondale, near New Orleans and displacing thousands of workers. Northrop will take a charge of $113 million and have made plans to transfer the work from Louisiana to its yard in Mississippi – in addition to the charge, Northrop will benefit from another $296 million from taxes.
Gone are the days, when it seemed like military contracts were perpetual; even the Republicans who are strong advocates of giving the military all that they asked for are prioritizing. We all know that the Democrats are not keen on cutting social programs and the Republicans are reluctant to cut defense, but the fact that a Corporation like Northrop is feeling the pinch underscores once again how serious our economic situation is - maybe this is a silver lining, where now both Republicans and Democrats can come together and compromise to fix our economy.