Special to Central Florida Politics from Orlando Business Journal by Bill Orben, Associate Managing Editor
Whether you sell wiring or operate a hotel in Orlando, your business will be impacted by the $1.2 trillion in U.S. Department of Defense cuts schedule to take effect Jan. 2.
The predicted loss of 56,600 jobs in Florida by 2014 from cuts to the defense budget will be felt by every small business, manufacturing groups are expected to say in Orlando on Oct. 4.
Brian Domian, director of business development for SAAB Training USA, sits at a training simulator that uses the program JFist.
A press conference on the impact of the defense cuts was planned today at the National Center for Simulation near University of Central Florida in east Orlando. Results of that press conference were not available at press time, but the National Association of Manufacturers said it intended to get out the message of how damaging the cuts could be to the state’s economy. Orlando’s 100 companies in modeling and simulation companies employ 12,500 and have combined revenue of $3 billion annually.
With $5.5 billion worth of annual defense spending occurring in the Orlando area, the expected cuts mandated by the Budget Control Act of 2011 may mean about $500 million less for the area’s modeling and simulation industries, which attracts the lion’s share of defense spending in the region.
“It will affect virtually every business in Florida in a negative way,” said Thomas C. Feeney III, president and CEO of Associated Industries of Florida.
Although Republicans and Democrats agree the defense cuts would harm the economy, it’s not a guarantee both sides will be able to reach a deal. House Speaker John Boehner, R-Ohio, expressed a lack of confidence in early September that Congress could reach a deal on those cuts and other tax issues scheduled to go into effect in January.
The press conference at UCF — coming after similar events in Washington, D.C., June 21 and Raleigh, N.C., July 26 — is part of a 10-city tour in the states most impacted by the defense cuts.
“We want to get our message out there to draw attention that the impact is much broader than people think,” said Dorothy Coleman, vice president for tax and domestic economic policy for the national manufacturers group.
Thomas L. Baptiste, president and executive director of the National Center for Simulation, said he was contacted by the national group because it wanted to explain the impact the defense cuts will have on small business.
Impact from the proposed cuts in the defense budget is already being felt in Orlando because companies are being conservative and not spending money on research and development or hiring workers, Baptiste said.
For instance, Saab Training USA, a 65-employee modeling and simulation company based near UCF, has a hiring freeze and cannot fill five open electrical, software and radio engineering positions. Those positions command a salary of between $62,000 and $66,000, according to Simply Hired Inc., which operates a salary estimation website.
“There is a tremendous amount of uncertainty,” said Brian Domian, director of business development for Saab Training USA.
Regardless of the action taken by Congress and whoever occupies the White House, cuts to the nation’s budget are expected because of pressure to trim the $16 trillion budget deficit.
However, there is an unexpected upside to the discussions: Efforts to make dollars stretch could actually benefit Orlando’s modeling and simulation industry.
“If we are looking for costs savings, nothing can save more than simulation,” said U.S. Rep. John Mica, a Winter Park Republican who chairs the House Committee on Transportation and Infrastructure.