The personnel situation at BAE Systems Inc.'s plant in Jessup defies the impact of automatic defense spending cuts.
BAE, a British defense giant that manufactures combat helmets and body armor at the Jessup Small Business Center, had about 275 employees in September. Today, it has 400 workers.
"We are holding pretty steady and doing well," plant manager Joe Shane said.
The plant received a $48 million Pentagon order in March 2012 for tactical vests that could expand to $267 million over four years. In February, the Marine Corps placed a $28 million order for ballistic helmets.
After adding about 120 full-time employees in October, BAE expanded helmet production to four daily shifts. The facility has body-armor orders booked through this year and helmet production contracts carrying over to April 2014, Mr. Shane said.
"It's a good position to be in," he said. "We are expecting more orders."
BAE's workforce expansion in the face of $85 billion in cuts during the current fiscal year under federal budget sequestration that took effect Friday illustrates the inconsistency of across-the-board spending reductions.
"The Pentagon has picked the most atrocious way possible to deal with the sequester," said Winslow Wheeler, a defense analyst at the Policy on Government Oversight, a Washington, D.C.-based watchdog group. "The plan is to hit the (government) operating budget as much as possible, while protecting contractors. They have it exactly backwards."
Some may dispute Mr. Wheeler's analysis, but sequestration will heavily impact government employment. It will affect a wide range of federal workers, from meat inspectors and national park rangers to airport safety personnel and civilian staff at military installations.
Tobyhanna Army Depot, for example, faces a budget reduction of more than $300 million through September. The depot is expected to address the impact of the cuts later this week.
Defense contractors also are apprehensive, especially if the spending cuts remain in place and potentially reach $1.2 trillion over the next decade. Pentagon spending would be slashed by $600 billion under that scenario.
"There's just a lot more questions than answers at this point," said David Nape, president and chief executive at Centris Consulting Inc., a Scranton company that advises military facilities on operations and maintenance efficiency. "I don't think anyone is going to be immune."
Centris has 25 employees, with consultants at Tobyhanna, Watervliet Arsenal near Albany, N.Y., Anniston Army Depot in Alabama and Red River Army Depot in Texas. Because its employees provide advice and analysis, Centris may face more exposure to budget cuts than producers of armaments and military equipment.
"The reality is, contractors like our firm are going to feel it in a major way," Mr. Nape said.
The environment at Gentex Corp. in Fell Twp. is cautious adjustment.
"When unit volumes decrease, you increase the value with more technology and innovation in order to maintain revenue and margins with lower volumes," said Heather Acker, chief financial officer and executive vice president.
The company, which employs about 425 people locally who make combat and air crew helmets, optical materials and fire-resistant garments, has adapted to defense contracts leveling from the withdrawal in Iraq and drawdown in Afghanistan, Ms. Acker said.
"We are fortunate that some of our products are unique, like air crew helmets," Ms. Acker said. "Our short-term situation looks solid."
Nevertheless, she said, uncertainty over the impact of the cuts causes concern.
"The government paying their bills could be delayed by days, hopefully not longer than that," Ms. Acker said.
BAE also acknowledged the unpredictable prospects.
"It will certainly affect our company nationwide, but it is unclear how our programs in Jessup will be impacted," the company said in a statement. "At this time, we have orders that we are executing on and we are not currently planning for any adjustment in staffing at the plant."
Contact the writer: jhaggerty@timesshamrock.com