[Fresh Ink] One Thriving Sector: The Business of War

[Richard Menec]

<http://www.boston.com/business/articles/2008/12/06/one_thriving_sector_the_business_of_war/>

Boston Globe             December 6, 2008

One Thriving Sector: The Business of War

Pentagon's contractors are looking for help

by Robert Weisman

South Nashua, N.H. - Across the nation, companies are lopping off hundreds 
of thousands of jobs, retailers are shuttering stores, and automakers are 
tottering on the edge of bankruptcy.

But here in the Merrimack River Valley, and over the state line at several 
industrial sites around Massachusetts, defense [sic] contractor BAE Systems 
is hoisting "Help Wanted" signs.

BAE develops technology in fields like electronic warfare and cybersecurity, 
sophisticated systems that are key to combating a new wave of threats around 
the globe. At a time when 1.7 million jobs have been lost in the United 
States this year, the company is hiring 200 engineers and manufacturing 
workers in Nashua, Hudson, and Merrimack, N.H., and Burlington, Lexington, 
and Marlborough, Mass.

Other defense [sic] electronics contractors, such as Waltham's Raytheon Co. 
and General Dynamics Corp.'s communications systems center in Taunton, also 
continue to ramp up. Such companies remain awash in orders from the Pentagon 
and American allies increasingly worried about terrorism and missile 
proliferation. They are also facing the pending retirement of many baby 
boomers in their labor force, a factor lending greater urgency to their 
hiring efforts.

"We're acting very aggressively when we find a good match," said Christopher 
Sherman, engineering manager at BAE's Electronics & Integrated Solutions 
division here.

The company has already hired 475 people in New Hampshire and Massachusetts 
this year, mostly to meet growing demand, but in some cases, to replace 
departing workers.

Back-to-back BAE job fairs Tuesday and Wednesday drew 1,462 candidates, 
including recent college graduates in pressed suits, Cold War-era defense 
[sic] industry veterans with salt-and-pepper hair, and commercial engineers 
who had previously worked at computer software or telecommunications 
companies. All hoped to land jobs at BAE's electronics programs, some of 
which are highly classified.

"I've challenged my team to hire 70 people out of this crowd tonight," said 
Amanda Arria, the company's Northeast regional talent acquisition manager, 
pointing to lines of applicants waiting to meet with hiring managers in the 
BAE cafeteria Tuesday night.

Patricia Heckley, 50, a software engineer from nearby Tyngsborough, Mass., 
stood in one of the lines. Heckley said she had never worked in the defense 
[sic] industry, but was confident her skills were transferable in a period 
when high-tech companies are scaling back. "It's a jump, but I think it's a 
reachable jump," she said.

Hunting for his first job was Curtis Jerry, 22, of Sanbornton, N.H., who 
graduated from Worcester Polytechnic Institute earlier this year. "I love 
defense [sic] in general, because that's where all the interesting 
technology is now," Jerry said. "I'd really like to work testing guidance 
and navigation systems, but I'd do just about anything."

BAE and other military contractors have become islands of growth in a 
national job market that is underwater.

The growth in defense [sic] may not continue for long. Industry analysts are 
projecting budget cuts in major US weapons programs as the war in Iraq winds 
down and the incoming administration of President-elect Barack Obama 
wrestles with other priorities. Defense [sic] spending has climbed steadily 
during the Bush administration, reaching $671.7 billion in the 2008 fiscal 
year, including emergency supplemental appropriations for the wars in Iraq 
and Afghanistan. That represents a 72 percent increase from fiscal 2000, 
after adjusting for inflation.

But the budget reductions are not likely to start until next fall, when 
President Obama's national security team will be in place and the next 
federal budget year begins, suggested Loren B. Thompson, chief operating 
officer at the Lexington Institute, an Arlington, Va., think tank.

"There will be breathing space because of the rhythm of the budget cycle," 
Thompson said.

"And even when the cuts come, some companies, because of what they do or 
because of emerging threats, will fare pretty well. Companies in 
Massachusetts and New Hampshire will weather the downturn better than others 
are likely to."

One reason is that, rather than building entire jets, ships, tanks, or 
ground installations, many of the region's defense [sic] firms develop the 
electronics, combat, and communications systems they use. Even when a 
massive weapons program is cut back, as the Navy's $20 billion DDG 1000 
destroyer program was last summer, contractors like Raytheon can market 
their combat systems for use in other new ships or in older vessels in the 
Navy fleet.

Area contractors, for instance, work on electronic eavesdropping, signal 
processing for radar systems, and equipment used to integrate intelligence 
from different sources, technologies critical to helping the US military and 
allies battle terrorists in multiple countries. General Dynamics, at its 
Taunton site, is developing a new generation of command, control, and 
communications systems that enable the Army to coordinate simultaneous 
operations at far-flung locations.

The economic downturn has given defense [sic] contractors a boost by 
expanding the pool of potential employees, since workers from civilian 
industries have lost jobs due to cutbacks.

But the ongoing housing slump has made it difficult for workers from other 
states to sell their homes and move to New England, forcing contractors here 
to compete with one another for local talent.

"To move people right now is problematic," said Keith J. Peden, senior vice 
president of human resources at Raytheon headquarters. "That makes the 
universe we recruit from smaller."

Raytheon, which is sitting on a $37 billion order backlog, has added more 
than 200 jobs so far this year at more than a dozen sites in Massachusetts, 
from Tewksbury to Marlborough. The company projects that it could add 
another 400 jobs in 2009, in programs ranging from border security and 
training systems to radar and Patriot missiles.

Over the past year, US allies such as Kuwait, Taiwan, South Korea, and 
Japan, jittery over the missile threat from Iran and North Korea, have 
placed orders for Raytheon's antimissile Patriot weapon systems.

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