Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 20, 1993 TAG: 9304200095
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE: LENGTH: Medium
Large defense contractors - such as ITT Corp.'s night-vision products plant in in Roanoke County and Hercules Inc., operating the Army Ammunition plant in Radford - aren't the only Western Virginia companies likely to suffer from defense spending cuts.
Smaller companies - some with no direct ties to the military - also are being hit hard by the military cuts.
When a large company lays off a significant number of workers, the aftershocks are felt by many smaller companies in the region.
Familiar with such secondary impacts is Janice Webb, president of Webb's Oil Corp., a 30-employee outfit in Roanoke County.
One of Webb's biggest customers has been Hercules, which last year bought about 1 million gallons of petroleum from the oil company to use in its production of propellant at the Radford arsenal. This year it's likely to buy less than 300,000 gallons, Webb said.
Since January, defense cuts have forced Hercules to lay off more than 1,000 workers. Every worker that walks out the door of the arsenal also drains money from Webb's pockets.
Webb estimates her company's sales to Hercules will drop from $600,000 last year to just under $100,000 this year.
The effects from defense cuts "are a lot more far reaching than most people realize," she said.
Webb was among a dozen business owners who spoke Monday to a subcommittee of the Governor's Commission on Defense Conversion and Economic Adjustment. The panel on minority and women-owned businesses, which must submit a report to the governor's office by May 1, held a public hearing at the Roanoke Civic Center.
Mexitronic, a Roanoke electronics company owned by Petra Barrera, also is reeling from impacts of defense cutbacks.
Barrera told the subcommittee she has been forced to shrink her company from 12 to three workers in the past decade. In that period, the portion of Mexitronic's work that is defense related has shrunk from 90 percent to 5 percent.
The company's transition to commercial work has been slow, she said, because more companies are buying their products overseas.
Karen Wigginton, director of the James Madison University's Small Business Development Center, said that, for many small businesses, the key to surviving defense cuts may also be to look overseas.
She urged the subcommittee to set up how-to seminars to provide small businesses information about exporting. "It could mean the difference between a company closing its doors or opening its doors to a world market," she said.
by CNB