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MEC meeting focuses on the importance of military to state and economy

Defense budget called into question

The proposed budget of Defense Secretary Robert Gates represents a mixed bag for Mississippi. On one hand, the budget calls for the continued construction of the DDG-51 destroyers for the U.S. Navy, good news for Northrop Grumman’s Ingalls shipyard, which builds the Navy destroyers. However, the proposed cap of F-22 Raptor fight production is bad news for the Lockheed Martin Subassembly Plant in Meridian where some of the fighters’ components are manufactured.

Defense-related economic development was the focus of one of the morning sessions of the Mississippi Economic Council’s (MEC’s) 60th Celebration and Annual Meeting held last week at the Jackson Convention Complex. The panel included moderator Gray Swoope, executive director of the Mississippi Development Authority, Rolls-Royce North America Inc. vice president of naval marine programs Mike Worley and Joe Max Higgins, president and CEO of the Columbus-Lowndes Development Link.

“Mississippi has a rich history and culture of supporting Defense and the military,” Swoope told the crowd gathered in the Trustmark Ball Room at the new Jackson Convention Complex. “Not only does the state have numerous military installations, but also private companies doing defense-related work. We’re here today to talk about how we can leverage that into other economic development opportunities.”

Swoope then listed the state’s military installations and their importance to the state. These include such familiar facilities as Camp Shelby in Forrest County and Keesler Air Force base in Biloxi. He also listed less familiar facilities such as Camp McCain in Grenada, where tank training is conducted and more than $25 million has been invested over the past five years. Throw in the myriad of operations of the National Guard, and Swoope said the military is obviously a major employer in Mississippi.

Swoope also talked of the many private companies doing related work in the Magnolia State such as Northrop Grumman on the Coast, Raytheon in Forest, L-3 Vertex in Madison, ATK in Iuka, which just announced a major, $200-plus-million project that will bring employment at the plant from less than 200 to approximately 800, and Navistar in West Point, where mine-resistant vehicles are made.

Certainly one key player is Rolls-Royce, which operates three facilities in Mississippi — in Pascagoula, Meridian and Stennis Space Center in Hancock County.

Defense companies offer pluses

When asked why he thought Rolls-Royce has found Mississippi so attractive, Worley, a retired naval officer, said, “Because of how easy it is to work with the people. People are friendly and want to develop companies. They’re very customer-friendly, I guess you could say.”

Located in the Golden Triangle, which has recruited a plethora of defense-focused companies of late, the always-quotable Higgins said defense companies offer many pluses to a community.

“The people these companies bring in add so much to a community’s quality of life,” said Higgins. “And, these companies not only pay well, but they are generally looking to expand before they even get phase one complete.”

Columbus Air Force Base

Higgins, who pointed out that the Columbus Air Force Base ($190-million annual payroll) is the area’s largest single employer, said many of the defense facilities in the Golden Triangle come out of the ground much larger than the companies’ expressed needs. He said it looks like overkill, but that actually the companies such as Eurocopter, Aurora and Stark Aerospace are planning for growth — sooner rather than later.

He added that Aurora has grown so quickly that there is some debate whether it is looking to begin phase three or four.

“And, Stark is still building its facility, but is already talking about expanding,” he said.

Swoope said these companies are the best of the best, a veritable who’s who of businesses, and give the state another plus to sell to prospects.

Thus, the proposed budget has all three men concerned. They see both potential pluses and minuses.

Worley said the news that the DDG-51 program would continue was good news, but that was tempered somewhat by the loss of the DDG 1000, which is being capped at a mere three ships. Rolls-Royce supplies the propellers and auxiliary power plants for these Navy ships.

Defense cuts

Worley and Higgins both expressed concerns over air-related cuts. Higgins said this could mean more parked planes at Columbus Air Force Base, an obvious negative. And, Rolls-Royce could be affected as it supplies the engines for the T-45 Goshawk trainer used at the base for pilot training.

However, fewer manned flights mean potentially more unmanned missions, and Mississippi has several companies producing unmanned aerial vehicles (UAVs) such as Northrop Grumman at a facility in Hancock County, Aurora and Stark.

“UAVs seem to be the trend,” Higgins said.

“I think if you asked every defense company, they would tell you they are concerned over Gates’ proposed budget,” Worley said. “For some, it may be good, for others, maybe not. It just depends on where you are standing.”

Eternal optimism

Swoope, too, voiced some concern over the proposed budget due to the high stakes involved. But an eternal optimist, he certainly does not seem panicked by it all.

“Sure, we are concerned,” he said with a smile. “But, that just means we are going to have to work a lot harder and be more aggressive.”

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.

About Wally Northway

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