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Owego Prepares for Rough Landing
Demise of Helicopter Program Means Hundreds of Jobs Lost in Struggling N.Y. Area

By Philip Rucker
Washington Post Staff Writer
Sunday, June 21, 2009

OWEGO, N.Y. -- When the U.S. military announced in 2005 that it would commission the next generation of presidential helicopters to be built here, this hard-luck area in New York's industrial Southern Tier rejoiced.

Pride and hope filled the narrow streets of historic Owego, a community of about 20,000 nestled along the scenic Susquehanna River, for good manufacturing jobs started disappearing a generation ago. From the old brick jail building that now houses the local government to the waterfront shops, salons and cafes, folks celebrated the promise of about 800 high-paying engineering and other jobs necessary to design and assemble a modern, battle-ready Marine One.

But the next four years unfolded like a classic Washington nightmare, with Owego squeezed between the bureaucratic largess of the past and the demands for efficiency of the present.

Defense giant Lockheed Martin won the $6.8 billion contract to produce 23 helicopters to replace the aging fleet of 19 choppers constructed in 1975. But there were cost overruns and specification changes. The Bush administration wanted nothing short of a high-flying armored limousine with seating for 14, the ability to fly at least 300 miles and security requirements for the post-Sept. 11 age.

The price tag ballooned to $13 billion, angering the politicians and jeopardizing the program. One month into office, President Obama convened a fiscal responsibility summit, in which Sen. John McCain (R-Ariz.) told his former rival, "Your helicopter is now going to cost as much as Air Force One."

Obama, joking that "the helicopter I have now seems perfectly adequate to me," called it "an example of the procurement process gone amok. And we're going to have to fix it."

Thus began the swift demise of the presidential helicopter program -- and with it the economic hopes of Owego. Since the military issued an order June 1 to terminate the program, about 800 workers have stopped building the helicopters and are searching for new jobs in a region struggling in the recession. More than 200 employees at Lockheed's Owego facility have been laid off. The company announced Tuesday that it would soon cut as many as 750 additional jobs over the next month.

An 11-year-old Owego girl, whose parents are longtime Lockheed employees, recently hand-wrote a letter to Obama. It was published in the local newspaper and quickly became a voice for her shaken community.

"Lockheed is the main job source in Owego," Hailey Bell, now 12, wrote. "If you shut down the program, my mom may lose her job and a lot of other people too. . . . Owego will be a ghost town. I've lived here my whole life and I love it here! Please really, really think it over."

One woman whose husband works on the helicopter said she worries about uprooting her three children from Owego for him to find a comparable job. The woman, who did not give her name because her husband could face retribution at work, said her 17-year-old son has a voice-mail message on his phone that says, "This is Barack Obama, and I approve this message."

"I said, 'Son, if we lose this helicopter project, will you change your message?' " she recalled. "He said, 'Yep.' "

The Obama administration had promised sweeping reforms to clean up the Defense Department's contracting process, and the over-budget and behind-schedule helicopter program was an obvious target. It was among a handful of weapons programs and other acquisitions that were canceled or scaled down under the Pentagon's proposed 2010 budget.

The president was looking for change -- not these kinds of headlines.

Here in Owego, a place a longtime resident called "poor man's land," Lockheed provides many of the highest-earning jobs. Helicopter engineers are said to earn between $80,000 and more than $100,000. So there is palpable frustration and even anger at Obama and Defense Secretary Robert M. Gates for their decision to abandon the project.

The cancellation "could have an adverse effect on the economic fabric of our community," Owego Mayor Edward Arrington said in his cramped first-floor office.

The government has spent more than $3 billion so far -- about nine helicopters are nearly finished -- but Pentagon officials said they would rather sell the aircraft, scrap the program and start anew.

Lockheed built a state-of-the-art building on its Owego campus, but the hangar is taking on the feel of a deserted big-box store in a fading strip mall. It seems that everybody in town is puzzled and is pointing a finger at Washington.

There's the cafe owner, George Swaney, who wonders why Obama suddenly does not need a new fleet. "He's flying around in a 30-year-old helicopter. Would you want to be flying around in a 30-year-old helicopter?"

There's the retired maintenance worker, David Honnick, who stood outside the local Veterans of Foreign Wars lodge and likened the program's cancellation to "buying a car and not getting the tires. They've got so much invested in this already, it seems silly."

And there's the jewelry and stained-glass artist, Donna Townsend, who sat at her gallery and pleaded: "Let's observe a moment of silence."

Gates told Congress last month that the Pentagon would retrofit the existing fleet and work with the White House to develop a more reasonably priced program. He estimated it will cost the government about $1.2 billion in termination fees to end the Lockheed contract and upgrade the fleet, calling the Owego program "a poster child for an acquisition process gone seriously wrong."

Lockheed and other defense contractors strategically establish facilities to build instruments of war in congressional districts across the country, which gives each military contract an automatic ally in Congress. New York's two senators at the time -- Charles E. Schumer (D) and Hillary Rodham Clinton (D) -- helped Owego win the project, and it is Congress that offers its last chance to stay alive.

Lawmakers could still allocate funds toward the program, but with Lockheed already dismantling the project, that chance is fleeting. Owego's congressman, Rep. Maurice D. Hinchey (D-N.Y.), is taking on the Obama juggernaut by writing letters to the White House, questioning Gates at hearings and sounding off.

"There's no logic to eliminating this program, because it's progressed so much, it's moved so far forward, so many of these helicopters are ready to be put into work," said Hinchey, a member of an Appropriations defense subcommittee. "Why would you stop it?"

But Hinchey, a progressive Democrat, has relatively little clout in Washington.

Lockheed spokesman Troy Scully would not comment other than to say: "We respect the decisions of our customers, and we are fully complying with the terms set forth by the June 1 termination notification."

With hundreds of workers in Owego about to lose their jobs, Obama is "very concerned about any job loss and how it hurts communities across the country, which is why he has worked to increase unemployment benefits and job retraining programs to help affected families," White House spokesman Tommy Vietor said.

Many of the helicopter workers have government security clearances, and some agreed to talk to a reporter only on the condition of anonymity because they feared angering their employers. One recent afternoon, three engineers commiserated over glasses of beer at a hotel bar not far from Lockheed's campus.

"It's like we all said in a meeting: 'This is politics now, and it makes no sense,' " one engineer said.

"It's a bloody political game," another added.

Deborah Walker, 43, a helicopter technician, was told she would lose her job in August. A single mother with two children and a mortgage, Walker has not found a job near Owego that comes close to matching her $20-an-hour salary.

"I cried many tears and went through the panic of, 'Oh, my God, what am I going to do?' " Walker said. "I've never been unemployed."

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