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By Brendan Lynch
For New England technology companies, the best defense against a recession may be defense itself.
The U.S. Department of Defense continues to roll out hefty contracts in the midst of a recession and ahead of a planned drawdown of U.S. forces in Iraq. On Tuesday, for example, it reported more than $2.3 billion in commitments to U.S. companies for things like 3-D imaging equipment, IT services, and mundane jobs like basic construction.
Don Quenneville, director of the Defense Technology Initiative, said that despite seemingly adverse economic conditions, he has not heard tales of woe from area defense contractors. The deployment of American troops may change, but the military remains engaged in Iraq and Afghanistan, and other countries — recently Pakistan — factoring in the war on terror. Continuing the mission with fewer troops creates a gap that can be filled by force-multiplying technology, such as the robots, sensors and other products made by New England companies, said Quenneville, whose organization promotes defense sector growth in Massachusetts.
“We still need to complete the mission, in homeland security and in southwest Asia,” Quenneville said. “You’d like to be able to do it without exposing military personnel to harm.” Local companies can play a key role, even if the defense budget remains static or shrinks.
“While the DOD may be shifting, it’s shifting toward technology rather than out of defense totally,” Quenneville said.
Axsys Technologies Inc. is weathering the recession quite nicely — it’s growing. COO Scott Conner said more than 90 percent of Axsys’ business comes from either the Department of Homeland Security or the Department of Defense. Conner said a decrease in troop levels could lead to an increase in business for Rocky Hill, Conn.-based Axsys, which makes thermal imaging systems. Even if the defense budget shrinks, Axsys could benefit, Conner said. Rather than buy new tanks, for example, the military often upgrades the technology on old ones to cut costs.
In October, Axsys opened a new imaging facility in Nashua, hiring 100 people. Conner said the company plans to add 50 employees in Nashua in 2009. The company is also expanding into other markets — border security on the U.S.-Mexico border, and protection of sites such as oil refineries.
The ability to succeed in a tough economy wasn’t planned, but instead was a happy accident, Conner said. “I wish I could claim that kind of brilliance,” he said.
Becoming a defense contractor can take years of product development and reputation building. But having done that, it can provide stable income, according to iRobot Corp. CEO Colin Angle.
“There are times when not having all your eggs in one basket is incredibly important,” said Angle, whose company produces robots for government, industrial and consumer markets.
In uncertain times, the defense industry changes more slowly so it’s easier to see what’s coming down the road, he said.
That doesn’t mean iRobot is immune to the recession. The company recently laid off nearly 30 people, a response to the economic conditions, Angle said, and a way for the company to recharge for 2009, a year for which the Bedford-based company is prepared, assuming the economy “merely sucks,” he added.
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