Representative HAMILTON. Thank you, Mr. Marlin. STATEMENT OF RICHARD GREENWOOD, SPECIAL ASSISTANT TO Mr. GREENWOOD. Thank you, Mr. Chairman. The International Association of Machinists sincerely appreciates this opportunity to present our views here today. As you may know, some 125,000 to 150,000 members in the IAM are engaged in military production either in procurement production, Federal arsenals, or servicing military bases. We include in our membership not only highly skilled and precision machinists, designers, but we have a large component of professional engineers which we represent in military production. Mr. Chairman, we think that it's important for the committee to understand why we believe legislation is necessary. Call it defense economic adjustment, economic conversion, diversification, whatever we will. We feel that there is a Federal responsibility in defense economic adjustment for the reason that it was in the interest of national security that defense dependent communities and defense dependent work force were in essence drafted into producing for that national security. Therefore, as the cold war winds down, national security requirements may no longer be needed to the extent that they have been, then we believe there is a Federal responsibility to help alleviate and mitigate the damages and the negative effects of drawing our commitment to national security. In the machinists union we've always had a rather pragmatic definition of defense economic adjustment or conversion. I think it's important to understand what this is. It's true that over the past 15 years we have been among the front ranks of those who have called for reductions in military spending and have warned against the excesses of military spending. In fact, it was in conjunction with the Council on Economic Priorities back in 1982-83 that we produced a study that was entitled "Cost and Consequences of Mr. Reagan's Military Buildup" which I believe busted a lot of records for circulation of publication in those early days. Aside from the excesses of military spending and its opportunity costs on the civilian side of the ledger over these past, particularly, 10 years, we've always said we need a defense economic adjustment program whenever and for whatever reason defense requirements and production are cut back, transferred, realigned, canceled, or terminated. We believe that in those cases a contingency program should be in place to make the impacted businesses, communities, and the defense dependent work force economically viable and whole. You know, there's a kind of theoretical argument that has been the undertow here for the past year and a half on this issue. It is whether or not Keynes' economic theory is dead, and we believe that in the case of military spending as most proponents of that military spending have explained themselves at least, that if military spending is Keynes' going in, then we cannot deny or discount that it is Keynes' when it is coming out. So, we would like to em phasize that there are ramifications beyond the narrow defense sector and the defense impacted communities and businesses. John Marlin has just given you a list of the defense driven States. To the list that he gave you we could add others, but I would just point out that Georgia, Illinois, and New Mexico are three States that probably should be added to the list that John Marlin has given you. As we look around the country we ask which States are dealing with the problem. There is much pending legislation. In addition to that in Washington which our District Lodge 751 people have had a large part in promoting in the State of Washington. California now has legislation pending and has had legislation on the table every year for at least the past decade. We just received a letter from the National Space Council chaired by Hugh Downs and the president of the National Space Council in our offices yesterday. International president Corpeus is invited to attend an economic conversion meeting in California in June. The National Space Council is looking to conversion projects as the military cuts impact on that industry. President Corpeus has assured me that he will be there. Oregon has legislation, New Hampshire has legislation on the books-nothing enacted-Maine, Massachusetts, Connecticut, Rhode Island, and Minnesota, and, of course, Maryland as you mentioned. All have legislation pending to do something about the adjustments that are going to be necessary. You've asked in your letter of invitation, Mr. Chairman, where are the problems occurring now that are defense related? And I would first of all refer you to a National Journal article if you haven't already seen that January 13, 1990, there is quite a lengthy discussion of these pending cuts. One in particular is entitled "Risks by Region." Other than that, we have for the past couple of weeks-in fact the past month-trying to round up places where our membership is involved and where we are being negatively affected right now. We look at Georgia and Martin-Marietta, cancellation and termination of the C-5B program where we had 5,000 people put out there. A year and a half to two years ago they still have not been recalled. We tried to work out a worker loan program with the Boeing Corp. up in Seattle. Boeing was faced with back orders on the commercial side and was short of some skilled workers, so we were able to facilitate a worker loan program of about 400 of those Martin-Marietta machinists and sent them up to Seattle to help out the Boeing Corp. for awhile. That program has been in place, but it doesn't take care of about 4,500 other Georgia machinists. Pennsylvania, the Chamberlain Corp. operates and manufacturers artillery shells in a federally owned facility. The pending CFE agreements and talks have dried up orders there. We have a skeleton crew of about 175 people out of a work force of 600. South Montrose Park, PA, the Allied-Signal Corp. makes fighter cockpit instrument panels, due probably to the F-14 talk we have lost about 300 members there in the past 6 months. Kansas, Washington, Boeing complex. Boeing is in the process of reorganizing its military contract bases. Business has all been centered in Wichita over these past many years and it is now reorga nizing, shipping its military business up to Seattle and going to be sending some of its commercial business down to Wichita. In the meantime, we have a displacement of about 4,000 people in Seattle. That has been going on now for about a month. We don't know how much longer that will last. We've had a displacement of 100 professional engineers in Wichita and more are anticipated as well as production workers in Wichita. Arizona, the Laurel Defense Systems, Inc., used to be the Goodyear Litchfield Plant, has lost 1,400 members over the past year and a half. We now have a skeleton crew of 84 people working there. They lost the spy plane radar contract, they lost the MX carrier system business and they thought they would replace this with an avionics contract with the McDonnell Douglas Corp. for the MD-11, but at the last minute McDonnell Douglas sent that avionics contract to Italy. California where 12 of 100 defense workers in the Los Angeles region are defense dependent. We know about the B-1B Rockwell program, a work force reduction of 7,800 to 1,600 in 2 years-that's a United Auto Workers organized plant, not the IAM. But that was a tremendous impact there. Pomona, the General Dynamics Corp. has the Fellex and the Standard Missile, we've lost 1,400 members as a result of the INF treaty. Los Angeles Lockheed plant, 350 plant we call it, that's down by 5,000 over the past 3 years. Our Los Angeles District 94, which consists of small job shops, supplying and servicing the major contractors has lost tremendous employment. We have at least two small shops now threatened with extinction. One is Lucas Western and the other is a McDonnell Douglas subsidiary called Acktron. The Cheney cuts, the Long Beach Naval Shipyard, we have 5,000 on the block. That's closed. Already at the San Pedro Todd Shipyard we've lost 5,000 workers there due to loss of contracts and Todd is now in chapter 11. What work remains at Todd has gone to Bath, ME, and Osceola, MS. The problem is that workers do not follow contract jobs. Sacramento Aerojet has just lost 100 people and expects to lose more due to reductions in manufacture of the Titan engine, electronic components, peacekeeper solid fuel rocket engine. New Mexico Laboratories and the R&D that is taking place on this defense initiative are all on the block. And we have in Long Island the Grumman Corp. which is an unorganized plant, it's a nonunion plant. But the F-14 is threatening it. I understand that the way the engineers and the production workers there are being dismissed is not a very pretty picture. They are given termination on very short notice with very little preparation other than the perfunctories that employers usually go through and it's not a very pretty picture. We certainly empathize and sympathize with those people, even though they are nonunion. Those are procurement cuts I have largely been talking about. We have to distinguish between the procurement side and the base closing side in this whole downsizing. We have about 20,000 members servicing those bases that are on the list of Cheney cuts, that is the earlier list. We don't know how it will shake out later on. If we want to go from the specific and get to the macro effects I would refer to you to exhibit B, table 2 of our prepared statement. Representative HAMILTON. Exhibit B, what? Mr. GREENWOOD. It's exhibit B, table 2 in the prepared statement. It would be at the back of the prepared statement. These tables were derived from a study done for the U.S. Conference of Mayors at the end of 1988. They show the impact of a $30 billion cut across 48 industrial sectors. Table 2 shows the impact of that $30 billion cut averaged out in the years 1986 through 1990 by the industrial sector. And you will note that if we just take $30 billion out of the defense budget and put nothing back, we will show declines in employment in every one of those industrial sectors. The sectors taking the greatest hits, of course, are those in primary metals, fabricated metal products, nonelectrical machinery, electric and electronic equipment, transportation equipment other than motor vehicles, construction, and truck transportation. Very interesting to note how hard the services are hit here; insurance, real estate, eating ad drinking places, retail businesses, and wholesale businesses. The service sector is a really big loser if you just take $30 billion out and put nothing back. That demonstrates to us the dependency of services on manufacturing. If we go on to the next table that I would like to demonstrate here it would be exhibit C in my prepared statement. This table demonstrates what happens if after you cut $30 billion you put all of it back into education and urban programs, non-trust-fund programs. And you see, all of those negatives from the cut as one would expect have become positives. That's very logical, but it is also very important because when we go to the next table, that is exhibit D and we compared these two, then we have the net effects of shifting $30 billion from defense production or the defense side of the ledger into the wholly civilian side and we can see where the negatives and the positives will show up. The net effect is that we will have a net gain in jobs by making that simple transfer. That shows the benefit, I think, for the increased multiplier effect of spending in the civilian sector. Now, we would still have-no doubt about it-we would still have some of those manufacturing sectors that would come out losers. But we believe that with the right mix of a reinvestment program of those defense cuts that we could make up for those losses. And I will be talking about that just a bit later. You may ask, Mr. Chairman, what are unions doing to help themselves? Well, as you may know unilaterally there is not a whole lot we can do. Unfortunately, defense economic adjustment, economic conversion, and so forth are not under the law bargainable issues. If management doesn't want it on the bargaining table then it can't get there. Those are management prerogatives, narrowly defined, jealously guarded, strictly enforced in today's labor relations climate. Shareholders and managers have virtually all decisionmaking powers with respect to investment, disinvestment, product design and development, marketing, organization of the enterprise and, of course, management's rights and prerogatives relations. But there are some things that we've been doing at least in the IAM that are some self-help things, minuscule perhaps but nevertheless helpful. First of all, we have prepared a video which is in distribution now to all of our affiliates throughout the country, preparing them for the cutback in job losses, trying to target the areas where we think they are going to be hit, tell them where to start looking for help through the Workers Advance Notification and Training Act to the Economically Dislocated Workers Act to the unemployment compensation to the trade adjustment assistance, if that's necessary, showing them where that help can be had. We have an educational and technology center in St. Mary's County, MD. We put about 3,000 of our members through there a year in week-long schools of one sort or another. Each one that goes through that education and tech center is given at least 6 hours training and introduction to our computer lab there, which is an attempt to get their skills upgraded and familiarize themselves with the new stuff that's coming into the workplace. We also have a tech line operation out of that center. It's a computerized communication and information system that is networked all around the country and with our membership in Canada. Since January, we have been trying to link up with the U.S. Employment Services Interstate Job Bank and put that on our tech line so that we could have in our district and our local offices around the country a list of these hard-to-fill jobs that the U.S. Employment Service has. Our members when faced with these cutbacks and job losses could simply go into their union office and bring it up on the screen, see what's available around the country and whether or not they can meet the qualifications and then go down to the employment office and specifically apply for that job if they're interested. However, since we have had initial discussions and had to send a letter requesting that we link up with this service on January 29, we've had no response from the Department of Labor and we don't know whether we are going to get that built in or not. We have a department that constantly surveys and searches for education and training grants. The problem there is that we catch them as catch can. What is really needed, in our estimation, if we just had one central place that we could go either federally, statewide, or even locally much as the unemployment services are organized, where we know these grant and education and training programs are going on; community colleges, State sponsored, there's thousands of them out there, but we have to catch them as catch can. Those that we have applied for so far we have not been successful except with one that we have with probably a corporation that didn't even need it in the first place, but it was the Boeing Corp.-that's a training and upgrading program. I won't go through the States which John Marlin went through. I would just like to say that over the past 15 years that we've become very familiar with the history of this Federal legislation and as it was mentioned earlier in the Arms Control and Disarmament Agency, its charter was to develop an economic plan to go along with cuts in military spending and along with disarmament. We have that old blueprint for peace published in 1963, I believe, or 1965. We still have that as sort of our charter document. In 1979, the machinists sponsored the Dodd-McKinney amendments to the Public Works bill, and those amendments passed the |