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News Index
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Pentagon Spending Boosts Mass. (Boston Business Journal)
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Defense cos. raking it in as military turns to area's tech expertise
Boston Business Journal - September 22, 2006
by Todd Wallack
Workers put the finishing touches on athletic shoes at the New Balance factory in Lawrence. New Balance is among many local companies landing military contracts.
The wars in Afghanistan and Iraq and the Pentagon's desire for state-of-the-art materiel have created a boom in defense contracts for Massachusetts companies of all sizes.
Bay State companies landed $9.6 billion in defense contracts in the government's 2004-2005 fiscal year, up 20 percent from the year before. Defense data also shows a surprising breadth of companies -- from Pittsfield to Nantucket -- that benefited from defense spending. More than 1,000 firms received at least $25,000 in contract awards last year.
"Massachusetts has prospered in the last few years because of the drastically increased defense budgets,'' said U.S. Rep. Marty Meehan, a Lowell Democrat and member of the House Armed Services Committee. "All you have to do is go to Afghanistan or Iraq and you will see Massachusetts technology in the theater."
Experts say the U.S. defense budget has mushroomed over the past few years, both because of the decisions to invade Afghanistan and Iraq and an effort to upgrade the military's technological capabilities. By some estimates the military budget, adjusted for inflation, is now the largest since the height of the Korean War.
And the military has long turned to Massachusetts, lined with research universities and computer companies, for much of its technical know-how.
"The more reliance there is on technology, the better it is for Massachusetts, because that is what we have to offer,'' said Alan MacDonald, executive director of the Massachusetts Defense Technology Initiative, a trade group that promotes the state's defense sector.
Indeed, scores of local tech companies are working on new technology for the military.
IRobot Corp., the Burlington company best known for making household robots that vacuum rugs and mop floors, has a line of military robots called PackBots designed to dismantle enemy explosives and explore hostile territory.
And in February, Textron Systems in Wilmington hosted an event to show off local companies' role in developing military equipment for the future -- part of the military's Future Combat Systems Initiative. The program is expected to generate $120 billion in contracts over 30 years.
Much of the military's research is also based here. The Massachusetts Institute of Technology, which received more than $600 million from the Defense Department last year, ranks as the fourth largest defense contractor, according to Pentagon data. Among other things, the university runs the MIT Lincoln Laboratory, which has close ties to the Air Force and works on national security research. Other colleges, including Boston University, Harvard, Northeastern, Tufts and several University of Massachusetts campuses, also received funding last year for defense research.
Many of the state's traditional defense contractors, such as Waltham-based Raytheon and General Electric, have also seen increased funding.
"We've had a business rise across the company,'' said Raytheon spokesman Jon Kasle. More than $2 billion in contracts were handled by Raytheon's Massachusetts operations alone, up one-third from the prior year. The company has 12,000 employees in Massachusetts who work on everything from sensors to the Patriot Missile.
Business has also boomed at General Electric's facility in Lynn, which has 4,000 employees and makes engines for the Navy F/A-18 Super Hornet and various military helicopters, including the Black Hawk and Apache. GE spokesman Rick K
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