The news from the Pentagon isn’t good

By Fred Metz

© August 17, 2014

Today, the Iwo Jima and the Fort McHenry, along with the 1,300 sailors who work on those ships, arrive at their new base in Florida. They join the New York, which relocated to Mayport Naval Station in December.

The three ships, the Iwo Jima Amphibious Ready Group, were previously based in Norfolk. Now they’re expected to bring as much as $75 million a year to the Jacksonville economy.

Mayport’s gain, Hampton Roads’ loss.

In addition, the Navy has announced that six littoral combat ships will be coming to Mayport in 2016, bringing with them another 900 sailors and support personnel.

The Hampton Roads Planning District Commission’s study, released in November, noted that “The Department of Defense is a viable economic driver of the local economy. Changes in the local DOD force structure will have an impact on the viability of the local economy, [and] changes in defense strategy can have a significant impact on the region’s economic well-being.”

When 46 percent of the local gross regional product is dependent on the Department of Defense, these ship losses will hurt.

The economy already is suffering from defense cuts over the past two years. Joint Forces Command reductions and the decommissioning of the Enterprise in 2012 started the recent decline. That year, the Pentagon also announced its pivot to Asia/Pacific. Sixty percent of the fleet, up from half, would be based in the West, leaving 40 percent to be divided among Hampton Roads, Mayport, New London and forward bases. The carrier Roosevelt will be moving to San Diego this winter.

In addition to the amphibious group and the littoral combat ships, the Navy has announced that three destroyers will be sent to Spain (two already are there); all patrol craft will leave Hampton Roads; and three missile frigates and a submarine will be decommissioned.

The effect: A loss of 6,700 crew members and their families and 14,000 direct and indirect jobs.

The unknown: the FY 2016 budget and sequester. If sequestration continues, in addition to the already announced reductions, the Planning District Commission study says the local impact would be a 9.7 percent drop in defense spending. Job losses – defense-related and all the jobs that depend on the Defense Department – could be as high as 33,492.

Congress needs to stop the sequester.

Unlike Mayport’s story of growth, Hampton Roads is unlikely to see economic growth. No, the sky isn’t falling; the region will still host the East Coast Master Jet Base (although San Diego will become the largest naval base).

For years, mayors and economic development leaders have pushed for diversification, but little has been done. Unfortunately no panacea exists, and the very goal of diversification often creates poor policy results.

News reports have noted that the region is at the bottom of the job market of all large metropolitan regions. I would not be surprised to see continued drops in school enrollment and more small businesses failing.

Recently, a local leader described the decommissioning of three ships as a “modest impact.” Taken by itself, this may be true. But given all of the Pentagon’s planned moves, the local economy will be hurt much more than modestly.

Fred Metz, a retired rear admiral, headed the Navy’s carrier and air-station program at the Pentagon before he retired in 1990. Metz, a Virginia Beach resident, writes a community blog, “Military affects all,” for HamptonRoads.com.