Pentagon cuts already felt in isles

The confluence of China’s military rise, a shift in global trade to the region, a budget crunch and the end of the Iraq war underscore the importance of a U.S. military presence in Asia and the Pacific — but have not made the future any clearer for Hawaii-based military commands and the state’s sizable defense industry.

That was the message delivered Thursday by the Chamber of Commerce of Hawaii, business leaders and military commanders at the 11th annual Hawaii Military Partnership Conference at the Hilton Hawaiian Village.

The chamber each year hosts Hawaii’s top military commanders, who provide an update on the largest driver of the state’s economy after tourism.

"It will be an interesting time with some of the changes in (the wars) in Southwest Asia and the withdrawal of troops as to how that plays out in Hawaii and other places," David Carey, chairman of the chamber’s military affairs council, told more than 500 attendees.

Carey added that the "budget situation in Washington is clearly going to have an effect — I don’t think anybody really knows what it’s going to be. However, we (remain) hopeful that with the nation’s new focus on the Asia-Pacific region, that it will minimize the impacts on Hawaii and our businesses here and our forward-deployed military."

In announcing a strategic and budgetary reorganization of the U.S. military Thursday, President Barack Obama said, "We will be strengthening our presence in the Asia-Pacific (region), and budget reductions will not come at the expense of that critical region."

But cuts are already being felt in Hawaii.

The Navy decided to take away some of the work at Pearl Harbor Naval Shipyard associated with a 10-year, billion-dollar cruiser modification program and shift it to the West Coast, Carey said.

"The program was originally targeted for Hawaii," Carey said. Rising fuel costs and federal budget pressures "may have resulted in the Navy choosing to move some of its work to a location where costs are lower," he said.

Patrick Sullivan, founder of Honolulu-based Oceanit Laboratories Inc., which does business with the military, said the defense cuts are "a big worry."

"Starting at Pacific Command, they are going to make adjustments in their budget, and that is going to reverberate through the entire (defense) community. They (the military) are going to be saving money on every single thing that they can," Sullivan said.

The high costs of a planned move of 8,000 Marines from Okinawa to Guam are bogged down and being re-examined by Congress. A lot of Hawaii companies invested heavily in the Guam move, Sullivan said.

"So a lot of those companies that mobilized to do that suffered," he said.

A shift in world trade away from Europe to Asia and the Pacific, coupled with what the U.S. military calls alarmingly "assertive" actions by China in the South China Sea, are fueling America’s renewed military drive in the region.

More than half of the world’s gross domestic product is produced in the Asia-Pacific region.

"We cannot afford to have excessive instability in the South China Sea area, and right now there are some excessive territorial claims that China is making in that area which are concerning to us," said Air Force Lt. Gen. Daniel Darnell, deputy commander of U.S. Pacific Command at Camp Smith.