80,000 Florida defense industry jobs on the line

Debbie Hanley is general manager at AM Specialties Inc. in Pompano Beach, a defense subcontractor who makes metal parts for jets and jet engines. She already has been forced to lay off staff.

Sun Sentinel / Carline Jean

By WILLIAM E. GIBSON, Orlando Sentinel

Published: Thursday, July 19, 2012 at 1:00 a.m.

Last Modified: Wednesday, July 18, 2012 at 9:04 p.m.

Florida will lose nearly 80,000 jobs if Congress cannot agree on a deficit-reduction plan by the end of the year and automatic spending cutbacks kick in, according to a new report.

The impact would be especially severe on scores of small military subcontractors in South and Central Florida, bringing another blow to the battered job market, defense industry analysts warned.

As the United States winds down its involvement in foreign wars and Congress confronts the national debt, the price of peace could include thousands of jobs on the home front.

Smaller companies like KAM Specialties of Pompano Beach already have been forced to lay off workers, as the nation scales back its wartime commitments and struggles to pull out of debt.

"We're hanging on as tight as we can," said Debbie Hanley, general manager of KAM, which supplies metal parts for jet engines but had to lay off six of its 14 employees because of dwindling contracts. She and other subcontractors are on the front lines of a budgetary backlash against far deeper government cutbacks, especially in defense, that could come next year.

"I still see those people. Two chose to remain unemployed, but the others are working two or three small jobs to get the income they had with us," said Hanley, who hopes the government will find a different way to reduce the deficit. "You can have a productive person here working and paying taxes, or you can put them on unemployment for a year before they just give up."

Defense cutbacks already under way are expected to reduce spending nationwide by $487 billion over 10 years. But a far greater cutback looms in January when the government must reduce spending by $1.2 trillion -- including about $500 billion in defense -- unless Congress approves a long-term budget plan to tame the national debt.

If the cutback comes, the report released by the Aerospace Industries Association projects a loss of 2.14 million jobs nationwide, 79,459 of them in Florida.

More than half of Florida's job losses -- 41,905 -- would come directly or indirectly as a result of cuts to the Pentagon budget, as the economic impact ripples through local communities. Another 37,554 would come from cuts to other parts of the budget, including the federal workforce, according to the report by Stephen Fuller, director of the Center for Regional Analysis at George Mason University.

The defense industry hopes the report will prod Congress to set aside partisan fighting and agree on a budget plan to spare the nation, especially strapped states like Florida, from cutbacks they say could add 1.5 percent to the unemployment rate.

"Small and medium-size businesses will see subcontracting opportunities lighten or disappear altogether," said Joe Marino, president of the Florida League of Defense Contractors. "Lockheed Martin, the largest defense employer in Florida, is feeling it as well."

Hardest hit will be companies, including many in South Florida, that make parts for military jets and weapons systems that are being shelved to save money. Companies associated with military "simulation" training, clustered in Central Florida, may be spared.

"Because it is an adaptable and efficient way to give as close to real-life training as possible, the simulation industry has a great opportunity moving forward," Marino said. "In South Florida, most contractors are in the aerospace field, and all of those are going to feel the impact."

Defense contracts in Broward County have dropped from $348 million in 2008 to $285 million last year, and in Palm Beach County from $811 million in 2008 to $431 million in 2011, according to the Florida League of Defense Contractors. But in Miami-Dade County, home of the U.S. Southern Command headquarters, defense contracts grew from $323 million in 2008 to $592 million last year.

BRS Aerospace of Pompano Beach, which makes disposable parachutes used for dropping supplies to troops in war zones like Afghanistan, already has suffered. The company -- whose employees include veterans, the long-term unemployed and homeless people -- scaled back its workforce from 360 last year to about 100.

"We hired people to help them get on their feet," said CEO and President Larry Williams. "But we just can't keep them if the contracts don't keep going. If they cut back too much, we will end up closing that plant."

Pratt & Whitney, a major aircraft contractor with about 1,000 workers in Palm Beach County, plans to host a rally Aug. 8 at a warehouse near West Palm Beach to rouse public support and put pressure on Congress to avoid deeper cuts to defense spending.

The defense industry, while invoking security needs, is framing military spending as a job creator.

Members of Congress say they are concerned about lost jobs, but they remain divided on how to reduce spending over time to avoid the automatic cutbacks next year, known as "sequestration.

"These defense cuts were designed to be so awful that they would force members of Congress to come to the table to work out alternatives," said U.S. Rep. Ted Deutch, D-Boca Raton. "The responsible thing to do is find a balanced way to long-term deficit reduction."

Source: http://www.heraldtribune.com/article/20120719/article/307199996

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