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More Defense Layoffs in Orlando Area

The U.S. defense industry is a complex group of companies large and small that constantly win and lose contracts. This leads to turn over in hiring and firing as sometimes work moves across the country as the Department of Defense seeks the best supplier at the best price. Most defense contracts have fixed times of five years or less which means contractors must plan to recompete their work and winning the same contract adds some consistency to their business.

The U.S. military also often buys a fixed amount of a system. This means that contracts providing logistical and maintenance support for an aircraft, helicopter or vehicle are often more valuable in the long run then actually making the system. This work too does not have to be done by the OEM but also can be awarded to another company or government depot. What all this means is that one company could be hiring people to work on a new contract while another will be laying them off due to the lost work.

With the potential for budget cuts in the future the situation of losing work and workers may become more common. The Orlando, FL area has already seen Northrop Grumman (NOC) make some strategic workforce decisions which led to shedding employees. Now one of their smaller defense contractors, DSE Fuzing LLC, has decided to end operations in that area which has led to the loss of over 100 jobs.

DSE makes fuzes for different weapon systems. They have opened a new factory in South Carolina and plan to consolidate operations there. As with all of these moves the goal is to reduce costs and increase revenue and profit. The company made clear that they are expecting future reductions in business from the military and this is part of the equation in their move.

DSE made news last year when some of the detonators it was making proved faulty and an employee was injured. This led to a fine and audit that found issues with its production practices. The company says that those issues have been resolved.

The company has been making military munitions in Orlando since after World War II when it was originally part of Martin Marietta. It has been sold and transferred a few times since.

If predicted trends in defense spending continue then there will be more stories like this as companies seek out the best place to do business in terms of cost. Unfortunately this means that other parts of the U.S. will face a negative economic effect as the work ends or moves.

Photo from Official U.S. Navy Imagery’s flickr photostream.

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