Pass the Guns, Hold the Butter By Cynthia L. Webb washingtonpost.com Staff Writer Monday, March 24, 2003; 9:37 AM
As the U.S.-led campaign to disarm Iraq continues, the Pentagon's hungry war machine is gobbling up supplies from defense contractors and other firms across the country. Alliant Techsystems, an Edina, Minn.-based company that manufactures the U.S. Army's small firearm ammunition, is one company whose bottom line will likely benefit sharply from the ramp-up in war. "They are very well positioned to benefit from military activity in the short term," Loren B. Thompson, military analyst at the Lexington Institute told The New York Times in an article yesterday. However, the Times noted that Alliant CEO Paul David Miller "plays down the possible effects of the war in Iraq on his company, noting that the military, for now, is drawing from its munitions stockpiles. Mr. Thompson, the military analyst, said that Admiral Miller was being discreet because it is considered bad taste in the industry to highlight the returns generated by war." . The New York Times: Quiet, But Central, Role For Ammunition Maker (Registration required) Military orders for supplies related to the war effort have already helped spark new business for many companies. "Tennessee companies are supplying U.S. forces with equipment ranging from soldiers' backpacks to explosives used in missiles," The Associated Press reported today. SSM Industries of Spring City, Tenn., makes special fabric, including bulletproof and fire retardant varieties, for the military. A Specialty Defense Systems plant in Tennessee manufacturers MOLLE, or Modular Lightweight Load-Carrying Equipment systems for soldiers. "It's designed to allow the soldier to really carry all his requirements into the field of battle," said Lee Ferguson, chief operating officer of the plant, according to the newswire. "The Holston Army Ammunition Plant in the Tri-Cities [in northeastern Tennessee] produces explosives used in missiles, including the Sidewinder, Hellfire, Tomahawk and Javelin missiles, said Nancy Gray, the Army's public affairs officer for the plant. ... Other area firms are making Humvee parts, so-called 'dirty bomb' detectors and smallpox kits. Kevin Frankel, a senior nylon-research engineer at the Chattanooga DuPont Textiles and Interiors plant, recently said military contractors are buying every pound of parachute yarn the plant can produce." . The Associated Press via KnoxNews.com: Products From Tennessee Go To War Alabama defense contractors also have seen business ramp up in light of war. "American Apparel Inc., which makes combat uniforms at five Alabama plants, has increased production and shipments of desert-camouflage battle dress uniforms, said Jim Hodo, the company's vice president and chief operating officer," another Associated Press article reported. "The wearers of those uniforms will use spare parts made by GKN Aerospace Alabama. Company spokesman Stacey Clapp said the company has had a slight increase in parts for military helicopters, including the Army's UH-60 Black Hawk and the Navy version, the Seahawk. ... The Army also has increased orders from Miltope Corp., a Montgomery-based computer manufacturer. Miltope specializes in rugged laptops that can survive being dropped or submerged in water and is in the second year of a five-year contract to build 11,000 of the laptops for the Army." . The Associated Press via The Tuscaloosa News: Alabama Businesses Contribute All Sorts of Goods To Military The nation's tech capital, Silicon Valley, is playing a major role in supplying technology services and products for the war effort. "Satellites tracking Iraqi troops in the desert were designed by engineers on the Peninsula. Data networks linking America's front-line soldiers to the Pentagon, half a world away, rely on Silicon Valley's trademark gadgetry. American fighter pilots aim their weapons using a high-tech helmet developed in San Jose," The San Francisco Chronicle reported yesterday. "The military pumps more than $4 billion each year into local businesses, cash spent on everything from ice cream and underwear to chemical-weapons detectors. A Chronicle review of Defense Department spending in 2002 found more than 900 companies from Healdsburg to San Jose selling to the military." . The San Francisco Chronicle: War on Iraq: Bay to Baghdad; Contracts: Score of Area Businesses Feed Military Machine's Need For Gear Will the war help offset the tech slump? The Wall Street Journal tried to answer that question, reporting: "The war has proved to be a break -- though probably a short-term one -- for some tech companies in Silicon Valley, and they have been throwing out their traditional corporate playbooks. Many have refocused on military projects at the expense of bread-and-butter consumer or business products. Some are increasing factory shifts and speeding up production cycles, while others are hiring more staff -- all actions that run counter to recent cost-cutting trends in the industry. More than patriotism is at stake. For many tech companies, the U.S. government and the military are among the few bright spending spots. The government's annual information-technology budget, not including military spending, is around $60 billion, according to some estimates. Merrill Lynch & Co. expects federal IT spending to rise 8% this year and 12% in 2004. Meanwhile, war jitters and the sluggish economy have damped business and consumer tech spending. Military and government contracts tend to have a disproportionate impact on smaller tech companies because they're less likely to be as diversified as the big concerns." . The Wall Street Journal: Tech Companies Scramble To Fill Military Orders (Subscription required) The Houston Chronicle, hometown paper for a number of oil-related businesses that could presumably benefit from reconstructing Iraq's ailing oil industry, said "a company's fortunes can quickly turn from boom to bust" even if they are in the war-related sector. "Take, for example, Stewart & Stevenson. The Sealy-based company makes the midsize Army trucks that are the workhorses for the troops invading Iraq. The company has had the contract for 12 years, but now it is fighting to hold on to it. At stake is the future of the factory, which is one of the biggest employers in the Sealy area. Meanwhile, at Halliburton's Kellogg Brown & Root division, government contracts range from planning to rebuild Iraq's oil fields to running support operations for the troops. Despite its long history with defense contracts, Halliburton has been targeted by critics who question whether it is capitalizing on its relationship with Vice President Dick Cheney, who headed the company as CEO between 1995 and 2000. Halliburton recently became a Houston-based company when it moved its headquarters from Dallas. And Boots and Coots, one of the companies famous for helping to snuff the fires in Kuwait after Desert Storm, was looking briefly like a hot stock again when the invasion of Iraq began." . The Houston Chronicle: Military Contracts Can Prove To Be Risky Business Contractors Go To War Too In addition to manufacturing military supplies, a number of companies, including Lockheed Martin and Northrop Grumman, also are supplying the U.S. military with contractors for the war effort to help maintain battle gear and support other efforts. While neither company would tell The Gazette newspaper how many employees are working in the Middle East, the newspaper said that analysts estimate that 20,000 contractors -- or one contractor for every 10 military workers, "will be in the region playing a role as part of the growing privatization of the military." Deborah D. Avant, an associate professor of political science and international affairs at The George Washington University, told the newspaper that military downsizing and more high-tech weapons have led to an increased use in contractors. "They provide a lot of the operational support," Avant said. . The Gazette: Military Contractors To Keep Doing Business In Harm's Way The Iraq war may prove a boon to law firms and other specialty consultants. The Washington Post on Saturday reported that William A. Roberts III, a D.C.-based government contracting lawyer with Wiley, Rein & Fielding, has been flooded with calls about Iraq. "Clients that help the Defense Department and other federal agencies support troops overseas have called with questions about everything from insuring expensive machinery in the Middle East to computing hazard pay for contract workers near the line of fire," the Post reported. In addition to questions about special pay for contractors working in danger zones and insurance for wartime workers, the general landscape for contractors has already changed due to the war, the paper said. "The Iraqi war has already changed the government contracting environment. For example, the Defense Department, citing the need to move supplies quickly, has waived many strict procurement rules. The waiver, which is permitted during national emergencies, enabled the government to bypass some competitive bidding requirements and other contracting rules. ... Contract workers who find themselves near harm's way can be entitled to hazard pay." . The Washington Post: Conflict Jostles Contracting Sector War-Inspired Entrepreneurship The Pentagon is calling the U.S.-led war in Iraq "Operation Iraqi Freedom." An enterprising ex-Marine and Gulf War veteran snapped up the domain name iraqifreedom.com after seeing it was still available. "I had just sat down at the computer after turning on one of the news channels on television," Darryl Pollock of Wingo, Ky. told Dow Jones Newswires. "I heard that the Pentagon had come up with the new operation name, Iraqi Freedom, but that it was not yet confirmed by the President." Pollack notes on his Web site that the domain name is for sale. . Dow Jones Newswires via The Wall Street Journal: Ex-Marine Captures Iraqi Freedom Domain (Subscription required) . The Louisville Courier-Journal: At the Water Cooler Blogging the War "Blogs" dedicated to war news are mushrooming on the Web. Dan Gillmor of The San Jose Mercury News wrote that "some webloggers serve a clearinghouse function, becoming a collaborative filter and conversation. They sort through the journalism, professional and amateur, and point the rest of us to the most interesting coverage. ... The soapboxes have their own unique value. These are political weblogs that deal mostly with policy issues, with the war and international politics at the top of the current agenda. Sometimes they're the classic 'sound and fury, signifying nothing,' but the best force us to reconsider our own biases. I frequently disagree with Glenn Reynolds (www.instapundit.com) but his postings are always relevant, often enlightening. The source and quality of information are as important online as in traditional media, but more difficult to verify in some cases. As I write this, meanwhile, there's a discussion online about the bona fides of a weblogger who says he's in Baghdad, telling us how things look to an Iraqi citizen. We're developing new hierarchies of trust for this new medium, just as we have for the traditional publications and broadcasts." . The San Jose Mercury News: War Offers Varied Perspectives on War Coverage . warblogging.com The weblogger Gillmor refers to claims to run his commentary on the war and life in Iraq from his home in Baghdad. His site is at dear_raed.blogspot.com. The blog includes some fascinating details of what life is like on the streets of Baghdad. An excerpt of a posting from 10:30 p.m. on Thursday, spelling errors and typos uncorrected: "the all clear siren just went on. The bombing aould come and go in waves, nothing too heavy and not yet comparable to what was going on in 91. all radio and TV stations are still on and while the air raid began the Iraqi TV was showing patriotic songs and didn't even bother to inform viewers that we are under attack. at the moment they are re-airing yesterday's interview with the minister of interior affairs. THe sounds of the anti-aircarft artillery is still louder than the booms and bangs which means that they are still far from where we live, but the images we saw on Al Arabia news channel showed a building burning near one of my aunts house, hotel pax was a good idea. we have two safe rooms one with 'international media' and the other with the Iraqi TV on. every body is waitingwaitingwaiting." Filter reader Roger Yee points out the following blog, The Command Post (billed as a "warblog collective"), as one that offers regular updates on the war. Washington Post columnist Leslie Walker links to some real-time war coverage and war blogs of note in her Sunday column, "Operation Commentary Storm." Washington Post media critic Howard Kurtz also explored the war blogging phenomenon in a Sunday column headlined, "'Webloggers,' Signing On as War Correspondents." Broadband's Time to Shine? News organizations are using their Web sites to feature streaming video, audio clips from reporters in the field and digital pictures from the Iraq war. All of these features, while accessible from a dial-up connection, are best seen using high-speed Internet connections -- giving broadband another way to push their products. The New York Times reported: "Some executives at online services like America Online and Yahoo and news Web sites like CNN.com are already arguing that the war has brought the long-awaited adulthood of the high-speed, or broadband, Internet. 'This is the coming of age of the broadband news medium, just like the first Iraq war for CNN,'" James Bankoff, AOL's executive vice president for programming told the newspaper. . The New York Times: War Is Test of High-Speed Web (Registration required) AOL's New Broadband Strategy One non-war item bears mentioning today: America Online plans to start selling next week a new service, geared toward broadband users, to pump up its lagging sales. "America Online Inc. is launching a $35 million marketing campaign in a bid to hang on to its subscribers, even if they buy high-speed Internet access elsewhere," The Washington Post said. The newspaper continued: "Matt Davis, a broadband analyst at the Yankee Group, predicts that high-speed Internet use will double over the next few years, from less than 20 percent of households to more than 40 percent. Given the rapid change in the marketplace, Davis said America Online's new approach is critical to its viability." According to The Los Angeles Times, the "new service, to be launched March 31, will include a redesigned home page targeted at high-speed users. Still photos will be replaced by streaming video, and popular broadband features, such as music downloading and games, will get more prominent display. Other new broadband features include anti-virus protection and enhanced parental controls; exclusive content from sister publications People and In Style, whose current free Web sites will cease next month; and no-cost access to CNN's QuickCast, which delivers hourly news updates." . The Washington Post: AOL Hopes It's Found A Way To Hang On . The Los Angeles Times: AOL To Roll Out New Net Service (Registration required) . The Wall Street Journal: America Online Launches Cheeky New Ad Campaign (Subscription required) . The New York Times: Beyond War News, AOL's Broadband Plan May Face a Struggle Filter is designed for hard-core techies, news junkies and technology professionals alike. Have suggestions, cool links or interesting tales to share? Send your tips and feedback to [EMAIL PROTECTED]
