Converting the Military Industrial Economy: The Experience at Six Facilities

Abstract

This paper addresses the task of converting military facilities to civilian uses, differentiat ing demand side from supply side approaches. We distinguish four alternative models of conversion from military to civilian use, each organized around a different target: converting the company, converting the community economic base, converting the worker, and converting the facility. After some discussion of each approach we scrutinize the last of these, which is in many ways the most difficult and yet the most attractive in terms of retaining jobs and stabilizing communities. After stating both strict and broader criteria for judging "success," we present the results of six geographically-dispersed and industrially- diverse case studies of such conversion efforts in the 1980s. While to date none has succeeded in the narrow sense of preserving jobs, these experiments have had a significant impact on public thinking about the formidable tasks of conversion. Several have resulted in state or regional studies, legislation, and economic development efforts. As a group, the cases demonstrate the ability and willingness of defense workers to plan for civilian work. In some, local conversion planning has led to an alliance between labor and peace organizations which has strength ened the political clout and institutional capabilities of both.

Problem-driven Research in Regional Science

“…With teams out of Rutgers, coled by postdoc economist Michael Oden, we spent time in each region, working with researchers, economic developers, large and small defense companies, trade unions, and peace activists to understand the physical capacity, labor force, land, and technological capabilities that were being freed up to see how they might be deployed. In addition to reports prominently covered in regional media in each case (and national media for the nuclear weapons labs), we produced academic journal articles (e.g., Hill, Deitrick, and Markusen 1991, a second Rapkin award winner; Markusen and Oden 1996) as well as op-eds in the New York Times , Chicago Tribune , and Christian Science Monitor . Walter Isard was pleased with the Markusen and College economist William Weida’s (1995) article on the state of the art of military industrial complex research, teaching and policy in Peace Economics, Peace Science and Public Policy.…”

Defense economic restructuring and conversion in South Africa

“…Among these conversion strategies are the corporate diversification model or "converting the enterprise", the alternative use model or "converting the facility", and the local economic development model or "converting the economic base of the community" (Hill et al 1991).…”

“…As Richards (1991b, p. 289) observes, the fact that the defence industry is used to a single client ordering a highly specialized product has made it "reluctant, and illplaced, to compete in civilian markets". The list of 'cultural' problems associated with defence enterprises includes inexperience in commercial marketing, an emphasis on product-rather than process-innovations, a skills hierarchy and a technological orientation 'distorted' by the weapons acquisition system, a reliance on protected markets, and risk aversion due to government subsidies for R&D as well as capital investment (Hill et al 1991;Harbor 1993;Willett 1993a). Taken together these factors coalesce to erect high 'barriers to exit' from the defence industry and explain the limited degree of success of attempts made to convert military enterprises into civilian production.…”

“…The key agency in the conversion process is the so-termed 'alternative use committee', which would include representatives of management, labour and the local community in seeking to draw up alternative business plans. Several cases of such committees operating in Germany, Italy and the United Kingdom have been documented, with the most well-known the activities and proposals made by the Britain's Lucas Aerospace Combine Committee (ILO 1986;Ball 1986;Hill et al 1991). Despite growing interest in such committees "so far there are few examples of successful alternative use planning to be found" (Willett 1993a, p. 6).…”

“…Finally, in the category of micro-economic conversion, are the efforts made by local authorities and community groups, often working together, to formulate new local development strategies in order to reduce vulnerable local economies to defence expenditure (Hill et al 1991). Emphasis in the American-inspired programmes for community economic adjustment is upon local level initiatives for supporting workers at local plants to convert facilities or diversify local economies away from defence dependency (Rauner 1993).…”