State economic development officials will ask Gov. Norm Bangerter to establish a Governor's Commission on Economic Diversification to help Utah contractors shift from defense contracts to opportunities in the commercial sector.
"What we've got to do is go off defense and on to the offense," said Lynn Blake, co-director of the Utah Division of Economic Development.Cuts in defense spending could cost Utah up to 6,000 jobs through the end of 1991. Additional cuts, ranging from 3 percent to 5 percent annually, are possible from 1992 to 1997.
Military installations and defense contractors employ approximately 50,300 Utahns, which represents 16 percent of the state's total personal income and 14 percent of the civilian labor force, according to a recent study conducted by the University of Utah's Bureau of Economic and Business Research.
But Utah officials expect that to change because of mounting pressures to reduce the federal deficit and modified defense strategies due to tensions in the Middle East and the end of the Cold War.
The State Department of Community and Economic Development officials have suggested that the Aerospace Task Force, which reports to the Legislature's Economic Development Interim Committee, be the nucleus of the governor's commission. Blake said representatives of the military, state agencies that provide services to business and individuals and economic development organizations also should be part of the study group.
State economic development officials anticipate the task force will be established before the next session of the Utah Legislature, which begins Jan. 14.
The task force would be charged with monitoring trends in defense spending, identifying potential problems and implementing appropriate programs.
Although the state's aggressive economic development effort has helped improve the state's average per capita income, Blake said the greatest challenge facing the state is keeping high paying jobs in Utah.
Blake said he believes the pool of engineers and other high-tech workers who may be displaced by defense spending cutbacks could be used as a tool to encourage existing aerospace businesses to expand their Utah operations or to lure out-of-state companies to the state where operating costs are much lower.
An aerospace company may spend as much as $50,000 to relocate an engineer to Southern California but 70 percent of them leave within three years, Blake said.
"It's impossible to keep a work force in a place in which you have to drive two hours to work and you can't afford to buy a house," Blake said.