The Denver Post October 7, 2001
Defense industry perks up War on terrorism keeps Colorado contractors busy
By Jennifer Beauprez, Denver Post Business Writer,
The U.S. military has put in rush orders on high-tech supplies for the nation's new war on terrorism, waking a number of Colorado defense contractors from a 10-year slumber. The defense industry was largely forgotten amid peacetime and a booming economy. While America focused on the Internet and telecommunications heyday, the defense industry faced job cuts and a 40 percent decline in defense spending.
But now, as the rest of the economy begins to falter and America prepares for a long war against terrorism, hundreds of local defense contractors are preparing for growth. 'We've had a lot of calls and inquiries asking if we can deliver this or that in such-and-such a timeframe or asking if money is no object, can we get this done,' said David Begley, a vice president at Boulder-based Ball Aerospace. The division employs 1,800 Coloradans who make satellites, remote intelligence sensors and antennas and guidance systems for missiles and bombers.
Begley couldn't give details on the government requests because they're classified, but he said they were primarily intelligence sensors, not weaponry. He hasn't seen such government activity since the 1991 Persian Gulf War.
Dozens of other defense contractors stand ready for more business.
'We're leaning forward in the stirrups, waiting for the go-ahead,' said John Lorber, a vice president at Boeing Corp., which employs 2,500 who work on space satellite projects in Boulder, Denver, Pueblo and Colorado Springs.
Lorber has good reason to look for new contracts.
Last week, the Senate approved a $ 345 billion defense-authorization bill, an increase of 11 percent or $ 34.2 billion from last year's spending. The bill includes $ 8.3 billion for President Bush's prized missile-defense program and frees $ 1.3 billion of that for use in combating terrorism. If the bill is approved by the House, millions could go to Colorado defense contracting operations.
A similar industry turnaround happened 20 years ago, when the Iran hostage crisis triggered the end of an eight-year decline in defense spending, said Paul Nisbet, an aerospace analyst for JSA Research Inc. in Newport, R.I.
September's terrorist attacks, he said, will probably end the same kind of downturn that whittled away at the industry during the 1990s. Martin Marietta, the predecessor to Lockheed Martin Astronautics, once employed 15,000 in the 1980s. Today, the division has 5,400 in Colorado, but it has 80 job openings, primarily in engineering. Nisbet expects the U.S. defense budget to balloon to $ 400 billion in 2003 and said the nation probably will see substantial increases for the next six years.
'There's a psychology to defense spending,' said John Pike, director of Globalsecurity.org, a national security analysis firm. 'When a country feels threatened, it makes it easy to increase spending. It's like a kid's comfort blanket. It's an easy way for politicians to make it look like they're doing something.'
This time, the windfall may land in the hands of high-tech start-ups that typically don't sell to the government. The military is now looking at products used commercially that can be converted for use in military combat to meet immediate needs, said Keith Ashdown, a spokesman for Taxpayers for Common Sense, a budget-watchdog group in Washington. 'Traditionally, fewer and fewer companies were getting more and more contracts,' Ashdown said. 'Now, because the nation is going into other high-tech areas, you're going to see that change.'
Because America is fighting a different kind of enemy, one that's hidden and elusive, the military also may invest more in surveillance and communication equipment than traditional weaponry like airplanes and missiles.
Contractors say they've seen more interest in technologies that transmit commands and surveillance information between aircraft ground-based stations, take satellite images of classified sites or track potential enemy cellphone calls.
'Information has become more and more important in combat,' said Chris Hellman, an analyst with the Center for Defense Information, which researches defense technologies. 'Anybody involved in any of that is going to be busy.'
That bodes well for Colorado's defense and space industry, which employs 100,000 and has most of its expertise in communication, imaging and surveillance devices and missile defense. The demand could win contracts for Raytheon Corp., which has 1,800 people in Aurora who develop software to control satellite systems. Or for the 10-person shop of Technology Service Corp., a Colorado Springs business that makes radar and geographic information systems.
Colorado Springs is home to dozens more contractors - those as small as the one-person Textron Systems, which handles space-surveillance equipment orders, to larger outfits like Technical Studies & Analysis, a government researcher with 1,512 employees.
They came to Colorado Springs to be near the customer. The city is at the heart of the U.S. military's satellite operations, with the U.S. Space Command's headquarters at Peterson Air Force Base and the North American Aerospace Defense Command inside Cheyenne Mountain. The military established the centers at the start of the Cold War to protect against Russian bombers, but space power has become even more vital to the United States' high-tech style of war.
In Colorado Springs and Denver, TRW Inc. has 1,000 people working on a number of satellite and space system projects. The company has received a number of calls from the military this in the past two weeks to develop space sensors for the terrorism war, said Larry Fortner, district office manager for the company which makes satellites and software for imaging and communication. He declined to give details on the technology.
Thornton-based Space Imaging Inc. also has been called on by the National Imagery and Mapping Agency to deliver high-resolution satellite images for combat and intelligence, including photos of Afghanistan. The company also sells its satellite photos to newspapers, city planners and telecom companies building cell towers.
'There's a lot going on here,' said Rocky Scott, president of the Economic Development Council of Colorado Springs. He said the industry forecasts for space and defense are projected to grow to $ 7 billion in 2010 from $ 3 billion last year.
'The portion of money committed to terrorism is obviously going to increase significantly,' he said. 'We now realize that we cannot only be prepared with conventional means of defense.'
Copyright 2001 The Denver Post Corporation
