BRADENTON -- When Army Chief of Staff Gen. Ray Odierno said military budget "uncertainty" will have huge consequences, Bradenton-based businessman Jeff Walters Sr. took close note.
Odierno told the U.S. Senate Armed Services Committee last week that furloughs, budget cuts and curtailment of training could significantly impact Army readiness if the proposed budget passes March 1. The proposed budget would trigger an estimated 10 percent budget cut across the government, in accordance with a clause in the
National Defense Authorization Act for fiscal year 2013 -- unless Congress and the president can reach a compromise before then.
Those cuts could eliminate thousands of jobs, including dozens locally at Globe Trailer and Lockheed Martin, another of the Army's contractors.
Walters, the president of the privately held Bradenton-based Globe Trailers, said his company has "an $86 million Army order we're working on, which is a very large order for our company." Globe's product line includes 70-ton "Lowboy" Trailers, water and equipment trailers and assorted specialized commercial and military-grade hauling equipment.
The trailers are made at a 60,000-square-foot facility covering 10 acres near 59th Avenue Drive East. The heavy-duty military logistical equipment and trailers are used by almost all branches of the U.S. military, but the huge Army order for "folding neck trailers" is the most important one.
While Globe Trailers has started production on the Army order, "we have not started billing for that order yet," said Walters. Still, he thinks his Bradenton company won't feel the impact of the budget cuts until 2015 or 2016.
While the Army contract is the company's single largest contract, "I don't lay awake at night worrying about it, since there's really nothing I can do." he said.
Walters is the third generation of his family to own and operate a growing mini-conglomerate of Bradenton-based companies including Globe; American TorchTip, a manufacturer of 16,000 parts to cut and weld metal; American Photonics Corp., a manufacturer of precision infrared optics, coatings and replacement parts for high-powered CO2 lasers; and Precision Plastics Corp. In all, the four area businesses employ about 300. A quarter of those employees work at Globe. Aggregate annual sales for the four businesses are about $50 million, Walters said.
"The fiscal outlook that the Army faces in fiscal year '13 is dire, and to my knowledge, unprecedented," Odierno said.
At the request of Congress, the Army along with the other branches of the armed services prepared a detailed state-by-state "Budget Uncertainty Impact" analysis.
The Feb. 15 Army analysis showed that, for the Sunshine State, "budget uncertainty" could result in a $204 million "economic loss" and could affect 3,887 jobs, including possibly hundreds of local jobs. The report specifically mentions two local companies, Globe Trailer and Lockheed Martin, as "Florida-Army Industry partners" that may well feel the impact.
In fiscal 2013, Odierno has said, the combination of a continuing resolution, a shortfall in overseas contingency operation funds for Afghanistan, and the sequester has resulted in a $17 billion to $18 billion shortfall to the Army's operation and maintenance accounts, as well as an additional $6 billion cut to all other programs. And "all these cuts will have to be taken over the last seven months of this year," said the Army chief of staff.