Blackwater: Layoffs


It turns out that trucking wasn't as lucrative as private security for Blackwater Worldwide.

One week after the government spurned the contractor's bid to build a lightweight tactical vehicle, Blackwater laid off an undisclosed number of employees from the manufacturing facility on the company's vast property in Moyock, N.C.

It's the second manufacturing setback for Blackwater, which had also developed a mine resistant rig known as an MRAP in the vain hope the Defense Department would change from the model currently in use, the Associated Press reported.

"We have stopped building all trucks," spokeswoman Anne Tyrrell told the Associated Press.

Government Inc. decided to write about this minor setback only because we believe Blackwater could be in the news -- and on the radar screen of the next administration -- in the not too distant future.

It's going to be interesting to see whether the coming debate over the government's extensive use of the company becomes a proxy for broader questions about the government's extensive use of contractors -- for everything from trucks to security forces.


By Robert O'Harrow |  November 5, 2008; 5:46 AM ET
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The contracts lavished on Blackwater by the State Department, Homeland Security, the Air Force and Navy have been very very lucrative. Still Blackwater seems to be really burning through a lot of capital. Buying ships for instance. Makes you just wonder what they are making on their many "black contracts". These might be the real gold mines for Blackwater.

Is the gravy train about to stop? I just wonder.

Posted by: markswisshelm | November 5, 2008 11:45 AM

Let's hope this is just the beginning. Let's see if the Obama administration is smart enough to see the danger in subsidizing these mercenary organizations.
We need a return to the pure military where it supports itself in every phase. That's the only way that the military can readily respond to whatever conflict that we engage in. Get the war profiteers out of the picture and we'll have less wars.

Posted by: Doubtom | November 5, 2008 12:52 PM

Blackwater is one of the reasons the US is spending 10 billion a month in Iraq. Since when is it more economical to hire mercenaries and private companies to run a war. The first thing the Obama administration needs to do is cut these blood suckers off the payroll of the US government. Let Eric Prince go find a real job.

Posted by: swal3711 | November 6, 2008 12:11 AM

Companies like Blackwater in Iraq are performing the jobs and duties that tie up valuable military resources so that they can concentrate on what they need to get done. I'm sure that you didn't frown on these "mercenaries" when they were hired to help police and restore order to New Orleans following Katrina, or these same groups helping to reduce the costs you pay for oil by securing refineries in global hot spots that rebel attacks are common in.

Companies like Blackwater exist mainly because they can fill and operate in a gap that the military is unable to fulfill without losing out on essential needs.

I'm not opposed to highly trained Blackwater Contractors guarding a high profile VIP or supply convoy so that special forces teams are free to continue their missions to defend the U.S.

Posted by: klp216 | November 6, 2008 1:22 PM

Couldn't happen to a nicer group of people...FUND THE MILITARY!!!

Posted by: ChazEvans | November 7, 2008 12:43 PM

And why are we paying contractors 150K plus a year tax free? And there are more contractors in Iraq than troops? The troops put their butts on the line every day so let's pay them the same.

Posted by: gregjoss | November 7, 2008 2:12 PM

Contract Companies working for the government are actually saving us money. If we used the military to provide the support functions that the contractors are providing you would double the initial cost by having to hire and train additional troops. Then increase the overall cost by a factor of three in the long run to payout retirement benefits, housing, and medical care to the retiree's. Would we want to pass that kind of debt off to our children? Right now all we pay for is the work performed. After the war is over and we don't require the contractors we let them go and then the cost goes to zero. Sounds like a good plan instead of wasting the money for the next 50 years and beyond paying for retirement benefits and medical costs.

Posted by: coopscoop | November 7, 2008 7:14 PM

1) Only a very small percentage of military personnel put in 20 years, most do 6. The cost of retirement benefits is a red herring that military contractors like to throw around.

2) When soldiers are used to do a job there is no "mark up" on the costs. More importantly commanders in the field are in complete control. If for instance faulty installed wiring or contaminated water are harming our troops the field commander can order corrections ASAP. No warren of sub-contractors to deal with. No haggling over what is or is not part of the contract or months even years of renegotiating back in Washington.

3) Blackwater, Forest Gump like, seems to have had a big hand in so many problematic situations in Iraq. They single handily torpedoed the US Marine's plans for Al An bar, forcing them to level Fallujah instead. Blackwater wasn't satisfied just pouring gasoline on the Sunni insurgency fire. They used snipers to fire on and kill Shea protester in Najaf, security guards at the ministry of communications and effectively condoned and abetted the murder of a Vice-President's bodyguard by one of their operatives.
4) Private military contractors are a very large reason the SOFA agreement has been so difficult to achieve. The US had to come up with twisted language that purports to hold them accountable under Iraqi law without actually doing so. The Iraqis particularly after the Monsieur Square massacre, don't trust the State Department and aren't buying it.

In the end private military contractors with their gun running, human trafficking, human rights violations, poorly trained personnel, over charging, failed projects, graft and corruption are offering nothing more than a false economy.

Posted by: markswisshelm | November 10, 2008 11:48 AM

The sooner Blackwater is out of business the better off we will all be. Only a fool would think having a private army on duty within the confines of the US is a great idea. There is a reason we use forces that belong to the public. Their allegiance is to the republic not to the company. No one in their right mind wants the country ruled by the bottom line. We have had enough of that in the last eight years.

Posted by: oldpol | November 10, 2008 2:57 PM

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