Crain's Detroit Business - Mackinac Section - June 7, 2010 - (Page 25)

June 7, 2010 CRAIN’S DETROIT BUSINESS Page M25 A CONVERSATION WITH Dan Raubinger, Automation Alley Defense Industry Dan Raubinger, program manager of Diminishing Manufacturing Supplies and Material Shortages for Automation Alley, spoke with reporter Chad Halcom about creating a vendor database and other efforts to grow the local defense industry. You are about eight months into the three-year program to create a vendor selection database for the U.S. Army Tacom Life Cycle Management Command. How’s it coming? The total number of companies we have listed is around 1,700 for Southeast Michigan, and it’s expandable. But that isn’t really as significant as the number of companies who have opted in to participate, and we’ve had almost 200 say they’d like to be considered for various obsolescence programs (since September). The number spikes every time we do public outreach. What are the funds used for? (The) initial shot in the arm was funds to get it going, keep the lights on and fund our small staff, but some of the funds can go to a prototype part or a DMSMS (Diminishing Manufacturing Sources and Material Shortages) component. We don’t replace the normal parts acquisitions process, because we only buy that first article. If TARDEC (the Tank-Automotive Research, Development and Engineering Center) needs a stamped component that isn’t in production anymore, they can find a stamper and buy a prototype part through us. Sometimes there are no 2D or 3-D drawings with that original component anymore, so we may also have to line up another source to do the reverse engineering and design work. So is this a gateway to larger orders? They do indicate general volumes for the particular component they seek, and for an auto supplier or former automotives. But they’re generally for dozens or hundreds of parts, not thousands. Even the production volumes are low because they have a large number of vehicles or weapon systems, but not much need for that part. So it wouldn’t supplant other procurement sources; it’s just another source. Defense Secretary Robert Gates said he is trying to trim at least $10 billion more from next year’s budget. What does that do to you? Most of what you read about defense budgets, the lion’s share of that savings is going to come out of procurement for new weapons systems. But as that declines, you actually need to spend more to maintain existing fleets. The ($323 billion) Joint Strike Fighter program is an interesting example; it’s going to replace planes like the F-16. The longer that project remains under review, the amount you have to spend to maintain the existing fleet goes up. If you know someone interesting in law, manufacturing or defense in Oakland or Macomb counties Chad Halcom should interview, call (313) 446-6796 or write chalcom @crain.com. Tech firepower has Washtenaw adding military, homeland security jobs BY CHAD HALCOM CRAIN’S DETROIT BUSINESS U niversity spinouts and intellectual capital for innovation are turning Washtenaw County into a burgeoning defense research and engineering cluster to design the devices of high-tech warfare. Private-sector employers in Ann Arbor and neighboring Ypsilanti with major defense and homeland security contracts could account for up to Up and coming 1,500 jobs — or Washtenaw contractors: nearly 2 perSoar Technology cent of the Inc., Page M27 combined emSun Engineering ployed workInc., Page M28 force for those Nanocerox Inc., two cities in Page M28 March, according to recent employer data furnished to Ann Arbor Spark and Crain’s. That number could climb soon: The Procurement Technical Assistance Center at Schoolcraft College reports 63 other companies in Washtenaw County became clients in 2008-2009, up from just 12 new client companies in 2007. The PTAC centers help client small businesses obtain new government contracts in defense and other areas. Also, the office of the vice president of research at the University of Michigan reports more than 600 sponsored research projects funded by the U.S. Department of Defense or U.S. Department of Homeland Security totaled $66 million in fiscal 2009, up from $61.3 million in research funding the previous year. The Eastern Michigan University office of research development in Ypsilanti reports $2.9 million in defense and homeland security spending out of $9.9 million in total grants and contracts awarded during fiscal 2009. That’s compared with $2.2 mil- PROFILES ALAN WARREN Kurt Flosky is executive vice president of Arotech Corp.’s training and simulation division, which includes First Ann Arbor Corp. Inc. More than 120 of the division’s 136 employees are in Washtenaw County. Shown is a military land vehicle driving simulator. TOP FIVE WASHTENAW COUNTY DEFENSE CONTRACTORS Washtenaw is home to several leading contractors. For the full list of regional leaders in defense, see Page 29: General Dynamics AIS: 250 employees; aerial surveillance L-3 (Eotech): 140 employees; optics Arotech: 126 employees; simulation AVFuel Corp. 120 employees; aviation fuels supplier Altarum Institute: 94 employees; health care system research and consulting lion out of a total $10.1 million awarded during fiscal 2007. Since UM is a progenitor for three of the top five defense contractor companies in Washtenaw — the imagery processing operations of General Dynamics Advanced Information Systems in Ypsilanti, L-3 Communications EOTech Inc. in Ann Arbor and That (research) expertise “invaluable to the defense of is the nation. ” Dennis Lowrey, General Dynamics Advanced Information Systems the nonprofit Altarum Institute — university spending today can be an indicator of tomorrow’s new spinout companies and talent pool, local defense executives said. “There’s a premier university in Ann Arbor with a history of deep research in electrical engineering, software and related disciplines. That expertise is invaluable to the defense of the nation,” said Dennis Lowrey, vice president of imagery systems at GDAIS, which tallies the most Washtenaw defense contractor employees at 250 in Ypsilanti. “We’re looking specifically for those kinds of skills to help the government solve very novel and difficult problems.” Research spending at EMU could mean future commercialization or spinout companies for See Defense, Page M26

Table of Contents for the Digital Edition of Crain's Detroit Business - Mackinac Section - June 7, 2010

Crain's Detroit Business - Mackinac Section - June 7, 2010
In this Issue
Economic Makeover
Lesson Plan for Education Reform
Teaming Up for Action
Time for a Cultural Revolution
Defense Mechanism
Slowing the State's Brain Drain
Intern, Employers of the Year

Crain's Detroit Business - Mackinac Section - June 7, 2010