Defense Spending Offers Charlotte Region Opportunity for Economic Growth
ATI Allvac in Charlotte, NC
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The U.S. Department of Defense is one of the biggest business customers in the world, awarding contracts worth a total of $367.6 billion in 2010.
Leaders in Charlotte USA have made it a mission to bring those dollars to the region — both by recruiting defense industry businesses, and by providing resources that help existing businesses tap into that multibillion dollar revenue stream.
Between 2005 and 2009, North Carolina's share of Department of Defense contract spending increased from less than 1 percent of the nation's total to about 1.6 percent, according to the North Carolina Military Business Center, which was created to help companies win military contracts.
"With two wars going on and defense-spending increases, the pie has gotten bigger, but we're getting more of it, too," says Steve Dorney, the military business center's executive director.
A Presence in Defense
The Charlotte USA region already has an impressive stable of large companies that supply the defense and aerospace industries, a sector that has grown in importance to the regional economy over the past 20 years.
Charlotte-based Goodrich Corp., with revenue of $7 billion in 2010, is the 11th-largest company is the U.S. defense and aerospace business. Several of the world's biggest defense players also have a home in the 16-county area including BAE Systems, Curtiss-Wright Controls, Northrop Grumman and General Dynamics, whose Armament and Technical Products Division is headquartered in Charlotte.
Some 100 aerospace companies provide 19,700 jobs to workers in the Charlotte USA region. Additionally, more than 1,200 defense contractors collectively landed $4.5 billion worth of defense contracts since 2000, according to Charlotte Regional Partnership research.
Recent economic development victories for the region include BAE System's decision last year to build a human resources and financial services center in Charlotte that is to employ 176 people. Armored car maker Defense Venture Group invested $50 million in a Lancaster, S.C., headquarters and added more than 200 jobs. French-based Turbomeca opened its first U.S. facility in Monroe in 2008, the same year ATI Allvac's announced its plans to invest $210 million to expand its presence in Monroe, where it employs more than 1,200 people.
The area's more than 8,000 engineers make it an attractive place to operate, says Dan Greenfield, a spokesman for Allegheny Technology, the parent company of ATI Allvac, which provides metallics to the aerospace industry. And the area has proven to be popular with prospective employees, he says.
"We do have a wealth of engineers coming out of the local schools, but it's also easy to attract engineers to come live in that area," Greenfield says. "The workforce that works in our plants is a good group of people."
Opportunities for Other Businesses
The North Carolina Military Business Center plays a role in recruiting new firms to the area, but its main focus is on growing existing businesses and helping retired military personnel put their unique skills to work.
Not all of the opportunities require a high-tech background. Dorney is particularly focused on government demand for goods and services — North Carolina is in the midst of a $7 billion boom in base construction, he says. There's no reason that most of that business shouldn't go to local builders. And companies that want to offer training services to the military, or security to other businesses, can find a wealth of highly trained veterans thanks to nearby military bases like Fort Bragg.
Of the Department of Defense's $367.6 billion in defense contracting in 2010, $161 billion was spent on services, according to the Center for Strategic & International Studies, a Washington, D.C., think tank.
Dorney culls the Defense Department's bid requests in order to identify those that offer a strong opportunity for area businesses.
"Only about 20 percent of the opportunities are really viable, but it's 20 percent of a really big pie," he says.
- 1,000+: Companies in the region that have received U.S. Department of Defense contracts since 2000
- $4.5 billion: Value of defense contracts awarded in region since 2000
- 100: Companies in the region involved in aerospace/defense
- 19,700: Workers employed in the aerospace sector in Charlotte USA