For Small Businesses, Shutdown Can Mean Job Layoffs

George Robinson has eight engineers who get laid off at the end of the week if the federal government shutdown isn’t solved quickly.

“Nobody wants to be out of work, but if the government shuts down, what can you do?” said Robinson, vice president at Radiation Projection Management of Newport Beach, which has contracts to do environmental accessment and cleanup work at plutonium-processing plants.

Robinson has assigned eight engineers to a plant in Idaho Falls, Ida., and the federal government is scheduled to send his company payment this week for work performed last month, he said Tuesday. Robinson said he was told the check was probably cut last week or Monday and mailed before the government sent home so-called 800,000 nonessential workers.

If most government workers are still off the job at week’s end, Robinson said, he will be forced to dismiss the engineers in Idaho because he will have no formal assurances that they will be paid for any future work.

“It’s a real power struggle,” Robinson said, describing the dispute in Washington between President Clinton and the Republican majorities in the House and Senate. “Somebody has to say uncle and I don’t see either side ready to give in,” he said.

“I would suspect this thing could go a couple of weeks,” he said.

Big government contractors, such as giant defense firms, have big cash flows and ample corporate reserves to enable them to cope with short-term disruptions. But firms such as Radiation Projection operate on a much tighter edge, expanding their staffs when they get a contract, and shrinking them immediately if the flow of federal dollars in interrupted.

At Americo Industrial Supply Inc. in Carson, company President Jackie Fries said Tuesday she had been in touch with Washington congressional sources who predicted the shutdown would last for a week.

“Needless to say, I am very upset--I feel like this is more of a strain on small business than anyone else,” she said.

On a typical day, Fries hears from buyers at military installations in California, Hawaii and Virginia ordering lighting fixtures, safety equipment and block-and-tackle systems for hoisting heavy equipment.

Tuesday was different. “We have not gotten a call today from any of the bases,” said Fries.

“At this point I can assume they are not at work or else they are very busy taking up the slack of other people who are not there,” she said.

The shutdown affects 800,000 workers deemed nonessential, but the application of the term may differ from office to office and department to agency.

As long as Fries doesn’t hear from the bases, “we’re not doing quotes, which lead to orders, which lead to sales,” she said. “This will force us to concentrate on other markets, and hope to pick up the slack later.”

She assumes business will return to normal as soon as the government buyers return to work.

It is too soon to discern any sense of panic. No calls from worried entrepreneurs were reported at the Sacramento office headquarters of the California branch of the National Federation of Independent Businesses, which represents 600,000 small firms nationwide.

“It may affect them sometime down the line, but not immediately,” an official said.

Past federal government closures did not last long enough to have any real consequences, said, Betty Jo Toccoli, president of another organization, the California Small Business Assn.

The federal government has had four buried shutdowns since 1980. The most recent took place in 1991, but it was meaningless because it happened during a three-day Columbus Day holiday.

Prior shutdowns lasted just a day or two, not long enough to seriously disrupt the federal government or the firms it deals with.

Toccoli expressed optimism that the President and the Congress will “resolve their political differences and get on with running the government.”