April 2019 Magazine

Booming Business: Arkansas’ Defense Companies, a Growing Economic Segment

Booming

By Dwain Hebda

Filming a promotional video, a drone glides through a manned gate and, gaining altitude, reveals a sprawling, forested 17,000 acres in south-central Arkansas. It could be a wildlife preserve, so tall and thick are the trees here, until the drone hovers along row after row of mounded underground bunkers, their massive concrete façades studding the landscape.

Here, among the hardwood and towering pines, a cross-section of Arkansas’ defense companies manufactures the kind of installation outside of weaponry that enables America’s fighting men and women to get their point across to the enemy in no uncertain terms.

Welcome to Highland Industrial Park,  a former military installation outside of Camden, that’s now home to defense contractors large and small, from industry behemoths Lockheed Martin and General Dynamics to smaller, local specialty firms.

Spectra Technologies makes warheads from the Calhoun County-based Highland Industrial Park.

Spectra Technologies is one of the more modestly-sized firms – just 200 employees – that’s part of a 10,000-job, $1.8 billion industry in The Natural State, according to the Arkansas Aerospace and Defense Alliance. Spectra makes warheads, the explosive payloads that range from a few milligrams to 500 kilos, as well as hand-thrown grenades, 40mm grenades and assorted demolition products.

David Siggers, company co-founder and president, says the state in general – and Calhoun County in particular, where Highland Park is located – provides several advantages to his firm.

“The Highland Industrial Park is a very unique place for people that build ordnance (artillery),” he says. “This was a former naval depot, and there is a huge number of specialty buildings that we call magazines, which are earth-covered specialized buildings for storing explosives and different types of ordnance products from rockets to missiles to general ordnance products.

“Because of that infrastructure, and because of the indigenous knowledge base that surrounds it and is tuned into the kinds of specialized work that you have to do to process energetics, it makes it a great place to be.”

The presence of other companies in the business park has also opened up opportunities for smaller manufacturers such as Spectra, even as they compete head-to-head with their billion-dollar neighbors.

“We do compete against companies in many instances, but we’re also a servant to those kinds of companies where we build warheads for missile makers and things of that sort,” Siggers says. 

“We’re a very niche market company because of the kinds of things that we do. I think we found our right place from a competitive posture. Our business model is tuned specifically for the things that we do, and I think that’s what helps us to remain competitive and continue to grow. We’ve been doing that pretty well for the last 17 years.”

The industrial park is privately held but operates hand in hand with the Ouachita Partnership for Economic Development (OPED), one of a bevy of regional and local economic groups that contribute to make the area an attractive one to the defense industry. Primary among these, the Camden Defense Industry Consortium (CDIC) supports various training programs for defense companies, improves communications infrastructure and recruits new firms to the area.

James Lee Silliman, OPED executive director, says these efforts continue to pay off in the growth of resident companies. 

“Most of your job creation – it’s a proven fact – comes from existing business and industry expanding their operations and adding employment,” he says. “It’s not necessarily landing the big fish that everybody in the country would like to chase. If you can take care of your industries and businesses that you currently have and assist them in growing and expanding their operations, that’s a much easier way to create new jobs and investment.

“What we’re experiencing is Aerojet Rocketdyne is in a growth mode and expanding their operations here, and that comes on the heels of a previous expansion and announcement from 2015. Lockheed Martin is in hiring mode; I think they anticipate more contracts coming to Camden. Raytheon Missile Systems and General Dynamic, they all seem to be in a hiring growth mode right now.” 

Such expansion of existing businesses naturally begs the question of how to find skilled employees to fill the jobs, let alone attract new companies to the area. Silliman says such issues in Calhoun County are no more dire than anywhere else.

The aerospace and defense industry in Arkansas accounts for 10,000 jobs, many of which are located in Highland Industrial Park.

“We’re not unique to anywhere in the United States right now on workforce,” he says. “Companies are doing a lot of their own recruitment through their website to fill positions. The state has training programs through Workforce Development that the companies can take advantage of. And we offer local incentives on job expansions to work with the companies and through our local community college, SAU Tech, which is located right there in Highland Industrial Park. We also offer job training incentives through our organization to assist on these expansions.”

Like any other industry, workforce issues can be particularly difficult for smaller manufacturers, but Siggers says going head-to-head with his much larger neighbors comes with the territory. 

“I think the challenges are very similar for everyone that is in our business, and that is finding the right kind of technical talent to be able to work inside of this unique kind of market place,” he says. “Especially in the engineering area of both manufacturing engineering and quality engineering, those remain challenges pretty much nationwide.

“Here in the industrial park with Lockheed, Aerojet and General Dynamics, if we aren’t paying competitive wages and competitive benefits and those sorts of things, we wouldn’t be able to attract employees.”

Another indicator of the industry’s prominence in the state is the launch of 

the Mid-America Aerospace and Defense Summit, being hosted by the Arkansas Aerospace and Defense Alliance in late April. The summit is one of a regional and national focus, after a decade of similar events focusing exclusively on Arkansas.

“Aerospace goods are Arkansas’ number one export to the world. Coming from a heavily agriculture-based economy here, that does surprise folks,” says Chad Causey, AADA executive director. “The focus for the summit is on the vast array of aerospace and defense companies located in the fly-over states in mid-America. 

“We’ve got a great aerospace and defense presence here in Arkansas, but Oklahoma has a significant aerospace and defense industry located there. Kansas, as well, northeast Texas, Missouri with Boeing in St. Louis – the purpose of this convention is to bring those companies closer together and provide a forum for them to explore ways to work together to grow aerospace and defense throughout the region.”

Causey says such collaborative thinking has traditionally been lacking among many aerospace and defense companies. That’s why the April event will show the benefit of – and pathways to – better communication that can benefit everyone in the industry through increased and broader partnerships.

“We’ve got a great program where we’ll hear good information from various entities, companies and speakers from throughout the region,” he says. “Connectivity is something at which we can do better.

“Exploring what we can do as a region to promote growth in this industry will benefit everybody because of the supply radius and the opportunity for supplier companies in one state to provide services and parts for a Tier 1 supplier or an OEM in another state. Having that higher level of connectivity will mean growth for all of us.”

The Mid-America Aerospace and Defense Summit is slated for April 24 to 25 at the Fort Smith Convention Center. For more information, please visit arkansasaerospace.com and access the “Events” menu.

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The Mid-America Aerospace + Defense Summit, slated for April 23-25 in Fort Smith, will host some of the industry’s top business and government officials discussing the future of defense technologies and market conditions.

At press time, Arkansas Governor Asa Hutchinson had been invited to deliver the keynote at midday on April 24. Other legislators on the program include Lt. Governor Tim Griffin who will deliver introductory remarks that morning and U.S. Congressman Steve Womack (AR-03) will also address attendees, providing updates from the nation’s capital. 

Mike Preston, executive director for the Arkansas Economic Development Commission is another highlight of Wednesday’s program; he will anchor a panel discussion on economic development opportunities and challenges in the state and the region. The afternoon session also includes a presentation on legal issues by Ehren Hartz of Winstead and Kathleen McDonald of Wilson and Associates. A second panel discussion, centered on workforce issues, will close out the day’s slate of speakers. 

Corporate presenters scheduled to appear April 24 include executives from Aerojet Rocketdyne, Dassault Falcon Jet, Lockheed Martin, Gulfstream and Southwest Airlines.

International issues dominate the slate of topics April 25, with talks focusing on international trade outlook with a particular emphasis on trade issues with Mexico. Also on the docket is John Burgess of Mainstream Technologies, discussing cybersecurity issues in the aerospace and defense industries. 

In addition to the speakers, attendees will have ample opportunities for business to business networking (don’t miss the Summit Networking Reception the evening of April 23, sponsored by B&M Painting) and to see the latest in products and services via the on-premises trade show, open throughout the summit.