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Manufacturing
Between now and the year 2005, manufacturing will be the second slowest-growing industrial sector in Florida in terms of employment, according to the Florida Department of Labor & Employment Security. It should add almost 31,000 jobs to Florida payrolls in the next eight years. The category with the highest job growth, the service sector, is expected to generate 691,000 jobs, by comparison.
Once a major part of many companies' business, defense-related contracts are assuming a lesser role. Cutbacks in defense contracts continue to ripple through many firms in the state. Switching to the domestic commercial market is difficult [FT, "Swords Into Plowshares," Dec. 1996] and complicated by Florida's location.
An extreme but illustrative example is offered by the case of Ryan Systems & Manufacturing in Miami. Ryan is a contract manufacturer of labor-intensive electromechanical devices like panel assemblies and harness assemblies. Its biggest customer, until a few years ago, was Sikorsky Aircraft in Connecticut. The good times ended with the collapse of the Soviet Union and the end of the Cold War. As Sikorsky lost a lot of its business, Ryan's work force shrank from 65 to 15. "We've not been able to recover," says President Jack Ryan. "We're just bumping along at the bottom. We're contemplating closing."
First, however, Ryan hopes to attract a partner or a buyer. "Our position here in Miami is both a blessing and a curse," he says. "It's good if we find someone who wants to export to Latin America. We speak Spanish; we have a good airport. But forget about getting work from the Midwest or California. We're too far away. They won't even deal with us."
In the geography of the global economy, Colombia is closer to Florida than California. "Being in Florida is hurting us in the U.S.," says Richard Angulo, former president of Digital Products in Pompano Beach. "You want to be in the center of things. Florida is not in the center of the U.S., but it is in the center of North and South America."
The state projects that from 1994 to 2005 more than 62% of job growth in manufacturing will occur in three sectors: electronic equipment, instruments and related products, and printing and publishing, which is the largest category of manufacturing in Florida. Businesses in all those sectors are involved in export.
World markets
Hutton Press in Miami has been in the commercial printing business for 28 years and has 35 employees. "This year was an average year for us," says Lawson Hutton, vice president of marketing and sales. "Next year, we look to grow 10%. We focused a lot on our marketing and finding new clients."
Most of Hutton's customers are in South Florida, but a growing number are out of state - way out of state. "We do some exporting and we're looking into that more," says Hutton. "We have one client in the Netherlands, another in Cacao. We hired a sales person who has some overseas accounts and contacts. This is kind of a new step for us but a very good step."
It's nothing new at Reptron, a maker of printed circuit boards in Tampa whose customers include Motorola, Diebold and Baxter Medical Co. Reptron's revenues have grown 30% every year for the past 10 years, according to Patrick Flynn, president of Reptron's K-Byte division. "Our whole strategy is, we only look for customers who have a global marketing approach," says Flynn. "I think domestic growth is pretty limited. We build products for other people and they ship them overseas. That's why more than half our products go offshore. One customer does 70% of their business in the Pacific Rim."
Paul Plante, Reptron's chief financial officer, predicts the company will see another 30% growth in revenues in 1997, to $325 million. Employment should increase by 15%; in October, the company had 1,100 workers.
In Jacksonville, exports account for 15% of the gross revenues of Florida Wire and Cable Inc. and probably will jump to 20% in 1997. Seven years ago, that figure was less than 1%. In February 1996, the U.S. Commerce Department gave the company the Presidential E Award, started in 1961 by John F. Kennedy to recognize significant contributions to increasing American exports.
John Burnsworth, president of Florida Wire and Cable, says the company put together an aggressive growth strategy that targeted Central and South America, the Middle East, China and the Philippines. Its location in Jacksonville proved beneficial to these efforts. "The port has played a large role in helping us," says Burnsworth.
Not just South America
China, India and Indonesia are the targets of Glidco Inc. in Jacksonville, which makes fragrances and flavorings. Many of its products go into soaps and detergents. The company has a sales office in Tokyo and in 1996 added a sales office and distribution center in Singapore.
"As the economy of an emerging country gains a fairly low level of affluence, one of the first things consumers want is to be clean and to smell nice," says Glidco President George Robbins. "Sixty percent of what we sell is outside the U.S. We see a minimum of double-digit growth coming out of that part of the world. Here, it's 3% to 4%."
In Pompano Beach, Ben Khoshnood, acting president and CEO of Digital Products says up to 40% of the company's revenues could come from overseas this year. Digital makes the electronic devices worn as ankle bracelets by people on probation or parole; it also does the monitoring. Several European countries are seriously interested in the system, and the company plans to develop South American partnerships in 1997.
"I've stopped using the term 'Third-World country,'" says Angulo, formerly of Digital Products. "Latin America is as aggressive a market as any in the world. They want the latest technology."
The only thing holding back many manufacturers in 1997 from taking advantage of market opportunities as fully and as fast as possible may be continuing difficulties in finding workers with higher education and advanced technical skills, a combination some business people say is hard to come by in the Sunshine State.
The shortage of skilled workers for high-tech industries is severe enough in Florida that it will limit the ability of some businesses. "The human resources pool isn't as deep as we'd like it to be," says Angulo. "Florida's going to see a lot more pressure put on the college and university system to make sure we can attract students." Flynn says that Reptron will add up to 150 employees in 1997 - "if we can find them. It's awfully difficult these days. The rapid growth of technology has exceeded the available manpower."
