Machine Tool Builders Push for Defense Production Act

Sept. 24, 2009
Renewal of legislation tied to security, economic revival

AMT – The Association For Manufacturing Technology is lobbying the U.S. House of Representatives to pass the Defense Production Act (DPA) reforms and reauthorization, following U.S. Senate passage of the legislation this month.

“America’s national security is threatened by the erosion the recession has caused to our defense industrial base,” AMT president Douglas K. Woods explained. “This country’s manufacturing sector needs the type of support provided by the Defense Production Act if we are to continue our critical role in defense preparedness.”

Woods urged the House to approve the bill quickly. “Let’s hope the bill is passed by the House and signed by President Obama in the next couple of weeks. That will be a real sign that the Congress and the Administration are serious about getting manufacturing and this country back on the right track.”

The DPA is a 60-year-old program that gives the President broad power a) to require businesses to sign contracts or fulfill orders deemed necessary for national defense; b) to establish and enforce means of allocating materials, services, and facilities for national defense; and c) to control the civilian economy so that scarce and/or critical materials are available for national defense purpose.

The Act empowers the President to requisition property, allocate raw materials and dictate production levels to industry, institute wage and price controls, resolve labor disputes, control consumer and real estate credit, and various other authorities.

Though it’s decades old, the Act must be reauthorized periodically. The current version of the DPA is due to expire September 30.

Woods credited Senate Banking Committee Chairman Chris Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) for their 2009 effort to update the DPA. “The bipartisan leadership of Senators Dodd and Shelby and the broad support and swift action of the Senate illustrate the wide recognition that the DPA could be used now to help manufacturers hard hit by this economic downturn, particularly those that continue to have problems accessing credit,” said Woods.

Eugene Haffely, Jr., chief operating officer of Assembly & Test Worldwide, Inc., and a director of AMT, testified in support of DPA reforms in the Dodd-Shelby bill in a May 13.

“Tight credit continues to plague companies up and down the industrial production chain,” Haffely went on. “And without credit, business is at a standstill.”

Haffely said the loan and loan-guarantee program in the DPA bill will help shore up struggling companies critical to national security, thereby promoting economic growth and ensuring that we are not dependent on foreign sources for our defense needs.

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