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No Farewell to Arms
To remain viable, Connecticut's defense industries must maintain a breakneck pace of evolution and innovation
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Business New Haven
5/12/2003
By: Richard Rangoon
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The $366 billion U.S. defense budget for 2003 calls for ample military spending in Connecticut and a new direction for the state's defense contractors.
The changing nature of geopolitical conflict and increased technological know-how are driving changes in the ways the state's No.1 industry manufactures weapons.
From the 1960s to the mid-1990s, the U.S. defense industry focused on improving existing weapons systems, rather than creating new ones. The massive buying programs of the Cold War era supported this approach, with Connecticut's defense spending peaking at $7 billion in 1989, according to Jeff Blodgett, vice president of research for the Rocky Hill-based Connecticut Economic Resource Center (CERC), a nonprofit economic development organization.
After the Cold War, U.S. defense spending declined to the point where Connecticut's arms sales to the U.S. government were surpassed by the state's exports of goods and services abroad.
Contracts with Connecticut defense manufacturers hovered around $2 billion to $3 billion annually during the latter half of the 1990s, and then increased to about $4 billion in 2001, according to Blodgett.
"The economy has diversified greatly," explains Mark Prisloe, chief economist with the state's Department of Economic & Community Development (DECD). "Defense is no longer the pillar it might have been."
However, transportation equipment accounts for the largest share of Connecticut's exports - with helicopters, aircraft engines and aircraft parts leading the way.
Geopolitical forces are driving the state's defense contractors to adjust to new and evolving challenges. "We have to remain dominant today and tomorrow," says Fred Downey, senior defense and foreign policy advisor to U.S. Sen. Joseph I. Lieberman. "Our current weapons must remain capable and modernized."
The key to the success of the U.S. defense program is high technology, and Connecticut has a solid base of technologically innovative contractors, Downey says. For example, Fuel Cell Energy of Danbury is developing more efficient means of powering submarines, surface warships and aircraft. Goodrich is working on lasers to defend the U.S. against attacks from other nations. And Norden's Connecticut operations have developed and applied new technology to upgrade its radar systems.
Following are brief descriptions of Connecticut defense manufacturers and the contracts they received in the U.S. government's FY 2003 budget.
United Technologies
United Technologies Corp.'s (UTC) headquarters is in Hartford. UTC's total annual revenues in Connecticut - military and otherwise are - second only to General Electric's.
In 2002, UTC was awarded $3.6 billion in defense contracts from the federal government, slightly less than the $3.8 billion it received the year before. In the process, its ranking moved up a notch, from No. 7 to No. 6, on the list of the top ten defense contractors in the U.S. UTC ranked No. 5 in sales to the U.S. Air Force, and No. 6 to the U.S. Navy.
In 2002, 46 percent of UTC sales came from three divisions that produce military technology: Pratt & Whitney, Sikorsky and Hamilton Sunstrand.
Pratt & Whitney
Based in East Hartford, UTC's Pratt & Whitney division is best known for manufacturing aircraft engines.
Although its manufacturing operations are weighted toward commercial use, the company sold nearly 11,000 military engines to the U.S. Department of Defense last year. The company also produces technology involved in missile and space propulsion.
In the U.S. defense budget for FY 2003, Pratt & Whitney is contracted to manufacture the following:
oC-17 Globemaster III Transporter: $3.29 billion to produce 15 planes, which are powered by Pratt & Whitney's F117 engines.
oF-22 Raptor: $4.06 billion to procure 23 advanced tactical fighter planes, which are powered by Pratt & Whitney's F119 engines.
oJoint Strike Fighter: $3.5 billion for continued research and development for the planes, which will be equipped with Pratt & Whitney F119 engines.
oJoint Primary Aircraft Training Systems (JPATS): $237.8 million for JPATS, equipped with Pratt & Whitney engines.
Sikorsky Aircraft
Based in Stratford, Sikorsky Aircraft Corp. designs, manufactures and services helicopters for commercial, industrial and military uses. Sikorsky helicopters are flown by all five branches of the U.S. armed forces, according to the company.
In the U.S. defense budget for FY 2003, Sikorsky is contracted to manufacture the following:
oUH-60 Blackhawk Helicopters: $269.9 million to produce 19 Army helicopters - an increase of $116.5 million (seven helicopters) over the President's budget.
oMH-60 Blackhawk Helicopters: $369 million for 15 Navy helicopters.
oComanche Helicopter: $915 million for continued research and development of the helicopter, which is produced by Sikorsky in cooperation with Boeing.
oF-15 fighter planes: $14 million for engine kits.
oF-16 fighter planes: $20.5 million for engine upgrades.
Hamilton Sunstrand
Hamilton Sunstrand, based in Windsor Locks, designs and manufactures aerospace systems for commercial, regional, corporate and military aircraft.
In the 2003 budget, the vast bulk of the $5.64 billion in contracts awarded to Connecticut in 2002 were for aircraft and ships. In FY 2002, the U.S. Department of Defense bought $2 billion in aircraft engines and spares, together with $990 million in airframes and spares. Spending on ships was $1.89 billion.
In 2002, the categories of "services," "all other supplies and equipment," and electronics and communications equipment, were $180 million, $110 million and $109 million, respectively. Spending in the remaining categories was less than $100 million.
General Dynamics Corp.
In 2002, General Dynamics was awarded $7 billion in defense contracts from the federal government, compared to $4.9 billion the year before. In the process, its ranking moved up a notch, from No. 6 to No. 5, on the list of the top ten defense contractors in the U.S.
The company's Electric Boat division is based in Groton. Electric Boat produces the Seawolf, Ohio, Los Angeles and Virginia classes of submarines. Research and development is leading to the development of a new class of vessels, the company says.
Under the U.S. defense budget for FY 2003, Electric Boat is contracted to manufacture the following:
oNSSN Attack Submarines: $1.499 billion to produce one submarine, and $645.2 million in advance procurement for a new attack submarine.
oTrident Submarines: $404.3 million to convert two submarines to fire conventional precision cruise missiles, and an additional $421 million in advance procurement dollars to convert two additional submarines.
All nationwide defense production included, General Dynamics was the second-largest supplier to the U.S. Navy in 2002. The same year, it was the fourth-largest supplier to the U.S. Army, and the ninth-largest to the air force.
Goodrich Corp.
Goodrich Corp.'s Electro-Optical Systems (EOS) division is based in Danbury.
Its two main business segments, Sensor Systems and Optical Systems, enable development of Laser Threat Warning for Airborne and Armored Vehicles, the Hubble Space Telescope Fine Guidance Sensors, Satellite Attitude Determination Systems, and Earth Resources Satellite Optics.
Under the U.S. defense budget for FY 2003, Goodrich is contracted to manufacture:
oLiquid or Light-end Air (LOLA) Boost Pump: $1 million for LOLA Boost Pump. This technology designed to improve helicopter reliability and safety by improving fuel systems' ability to process air, eliminating flameout problems.
oUniversal FADEC Control: $2.4 million for state-of-the-art aircraft engine control system.
oF-18 E/F Reliability: $1.5 million for the Variable Engine Nozzle (VEN) made by Chandler Evans, a division of Goodrich. This system is designed to enhance the safety and reliability of the F-18E/F fleet.
oAN/VVR-1 Laser Warning Receivers: $2 million for Army vehicles.
oAN/AVR-2A Laser Detection Sets: $3.1 million for Army aircraft.
Although Connecticut ranks just 48th in geographical size among the 50 states (following Rhode Island and Delaware), defense spending among Connecticut manufacturers ranked ninth in the nation in 2002. The $5.64 billion in U.S. defense contracts included $772 million for the army, $1.22 billion for the air force, and $3.32 billion for the navy.
In 2002, defense spending in Hartford County, at $2.31 billion, barely edged out New London County, at $2.03 billion. Fairfield County followed at $1.12 billion.
New Haven County came in fourth among the state's eight counties in 2002, with defense contracts totaling $111 million in FY 2002. Litchfield, Middlesex, Tolland and Windham counties rounded out the list with $25.6 million, $24.5 million, $12.9 million, and $9.2 million, respectively.
Northrop Grumman Norden Division, Norwalk
oE-8C Joint Stars (JSTARS): $279.3 million to procure one aircraft, whose radar systems are manufactured at Northrop Grumman's Norden facility in Norwalk. This highly sophisticated radar system has proven effective in several conflicts, including in Afghanistan.
Ensign-Bickford Aerospace & Defense, Simsbury
oModernization Demolitions Initiators (MDI): $1.4 million to procure MDI, a non-electric demolitions device produced by Simsbury's Ensign-Bickford Aerospace & Defense. MDI is designed to improve safety and reliability of demolition equipment and reduce the weight carried by soldiers in the field.
Eaton Corp., Danbury
oLightweight Generators: $5 million for the development of high-performance lightweight generators manufatured by Eaton Corp.,, which has offices in Danbury.
Electro Energy Corp., Danbury
oNi-MH Batteries: $1 million for Ni-MH batteries used in Army vehicles and F-16 aircraft produced by Electro Energy Corporation in Danbury.
UTC Fuel Cell (South Windsor) and Fuel Cell Energy (Danbury)
oDefense Department Stationary Fuel Cell Buy-Down Program: $7 million for a cooperative program by the Departments of Defense and Energy to develop and commercialization of domestic stationary fuel cell systems since FY 1995. United Technologies Fuel Cell of South Windsor and Fuel Cell Energy of Danbury are participants.
Fuel Cell Energy, Danbury
oU.S. Navy Ship Service Fuel Cell: $3 million for design, development and testing of the marine Ship Service Fuel Cell, which features modular design and easily configurable electrical output support for the all electric future generation of the Navy's surface combatants. Fuel Cell Energy of Danbury participates in this program.
ConnSTEP Inc., Rocky Hill
oNew England Manufacturing Supply Chain: $6 million to establish better business relationships between DOD and smaller precision manufacturers in seven New England states, including Connecticut. ConnSTEP will administer the Connecticut portion of these funds.
Connecticut's defense manufacturing also includes a number of companies that support and supply the larger contractors. For example, Westport-based First Aviation Services Inc. provides repair, overhaul and other services to operators of military aircraft engines.
Although the revenue of giants such as Electric Boat dwarfs that of most of its suppliers, the support companies play an important role in keeping the state's defense industry strong, Downey says. Just as important are the many other smaller companies that contribute to the research and development behind the state's growing base of defense technology.
The U.S. defense establishment is manufacturing fewer, but more technologically advanced, weapons. For the most part, the more advanced weapons cost more than the traditional weapons, Downey says. However, some weapons can be upgraded rather than replaced. For example, Electric Boat is converting four Trident submarines from firing
nuclear missiles to firing up to 154 high-tech conventional missiles.
The developing technology of "micro-information," also looks promising, Downey says. Theoretically, this technology could lead to manufacture of a military aircraft with a five-inch wingspan, cameras and sensors.
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