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CFOs holding back on hiring as 'fiscal cliff' threat grows

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    Ace Clearwater president Kellie Johnson weighs in

  • Duration 4:28
  • Date

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This transcript is automatically generated

You look at this.

Employers posting V most job openings in June since the summer of 2008.

More openings usually means more hiring but is the government's report ignoring a very real threat that CEOs are not ignoring.

Kelly Johnson is CEO of ace -- want to.

Kelly you say this looming fiscal cliff has you holding back correct.

It absolutely does Stewart thank you for the invitation to be on your program.

OK you are an aerospace company you got 200 employees I believe.

You -- not a yes filling positions and you've canceled a half million dollars -- of machinery orders correct all of the above is correct that.

That is correct and that's simply because you see this fiscal -- That is tax increases and spending cuts you see that approaching so you are holding back that's one.

That is correct Stewart not only do I see but our customers are demonstrating that through their behavior as well.

-- ace Clearwater is structured as a sub -- S company like so many small and medium manufactures in the United States.

And if these current tax rates are not extended.

We will be paying our taxes on the individual rate -- up to 40% on the federal level.

Kelly that's very important you all right sub chapter -- -- -- in large company but you know subchapter S which means.

The profits.

Go to you.

And -- taxed as personal income to you not like any other kind of cooperation so you -- postal income tax rates right.

That's correct and you think there's a good shot that the -- took the maximum rate goes from 35 to 39%.

Come January the first and that's holding you back.

It truly is and coupled outlets doing business in the state of California -- -- about a 10%.

And we also have the additional tax in the new health care a lot about a three point 8%.

Add in all that together were over 50%.

Tax liability that potentially we will be -- next year.

Couple -- now with the potential defense sequestration and our customers are not placed -- orders.

We are at the end of three year long contracts we're negotiating new price seen however our customers will not be placing orders until 2014.

They are just going to be placing orders as required and not allowing us to work too long term agreements.

And that is holding us back from making the investments that we need to make to stay competitive.

And it also holding us back on our hiring.

What you'll run in the firing -- of a tax increase in the military cup back so clearly you're the bulls on right now but now who do you blame.

President Obama the congress Republicans being unable to come to an agreement Democrats unable to agreement had come to agreement who do you blame.

Well I know as a business leader that we are required to make tough decisions every single day.

And I -- Washington and accountable.

For their in action.

Washington generally congress the president say politicians generally right.

Yes I think that they are politicizing this and it's at the expense of people's livelihoods.

Now you're a small business operator.

This real fast the president says you didn't build apps without a lot of help from the government can you just give me an idea of you working day if you don't mind.

Well I would like to begin with a history of ace Clearwater it was founded by my grandfather when he moved the family from Oklahoma to California after the Korean War.

But the true -- of the -- in the company.

That my father built ace Clearwater came from his sweat equity along with mine and the talented incredible women and men at ace Clearwater in -- prices you will -- my day consists.

Yeah yeah yeah work extremely -- -- our that is very very.

Yeah very competitive environment that we operate within.

Our customers expect products to be cheaper every year they expect him to be better and they expect the quality to be perfect.

And for that industry that we service and represented there should not be any standards less and that.

The weapons and the sophisticated components that we manufacture for the men and women that Wear our.

Uniform.

And protect our liberties deserve the very best so not only are we jeopardizing their jobs were also potentially jeopardizing the jobs.

That people have -- companies like ace Clearwater across the country Kelly Johnson we thank you very much for joining us today thanks have been with us.

-- -- my pleasure thank you and I've got to.

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