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9-11 In Focus: Defense Contracts For Work In North Carolina Triple Since 9-11

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Dave Adams

http://66.225.205.104/LM20110909.mp3

In the ten years since 9/11 military spending has sharply risen to help fund two wars. In North Carolina, that's meant companies are filling more orders for the defense department. Plane parts, camouflage, and parachutes are all manufactured here. Over the past decade, military spending in North Carolina has tripled. Many of North Carolina's military contracts are clustered around bases like Camp Lejeune and Fort Bragg. But some of that money has trickled into the Charlotte area. Curtiss-Wright Controls was founded by the Wright brothers. It's headquartered in Charlotte and employs about 300 people in its Gastonia and Shelby plants. They make something called actuation products. Dave Adams. "Those are the components that open cargo doors. They do the lifting of the elements of the wing that move and then, of course, they lift the bombs up into the bomb racks," says Curtiss-Wright's Co-Chief Operating Officer Dave Adams. The company has plants all over the world doing defense work for big contractors like Lockheed Martin. They also do work for other industries, including commercial aircraft companies. Locally, Curtiss Wright has increased its workforce by about 50 percent to keep up with demand since 9/11. "We took a little hit over the last couple years as did everybody through the recession, but the military side has held up pretty well," says Adams. Thousands of North Carolina companies have seen a defense boost. Defense contracts for work performed in the state have tripled from $1.2 billion in 2000 to about $4 billion in 2009. Those numbers only include contracts the defense department makes directly with companies. If you figure all the money that changes hands with sub-contractors, the number is much larger. In 2009, the county that pulled in the largest share of defense contracts was Cumberland County. That makes sense because that's where Fort Bragg is located. The second largest was Onslow County, the home of Camp Lejeune. Mecklenburg County came in eighth with $101 million in contracts. But the state is still not at the levels you'd expect considering this: "We have the third largest presence of active duty military of any state in the country," says Scott Dorney with the North Carolina Military Business Center. With all the services that come with supporting bases, you'd think North Carolina's slice of the defense contract pie would be bigger. "But when you look at defense dollars, where defense dollars are actually spent across the country, we're about in the middle of the pack," says Dorney. At the top of the list are states where large weapons systems are built like Virginia, Texas, and California. Such systems are not built in North Carolina and the bottom line is it costs a lot more money to build aircraft carriers than it does to support a military base. So while the amount of defense money going into North Carolina companies has tripled, those contracts still only account for less than one percent of the state's economic output. Wells Fargo economist Mark Vitner says that's come with a cost. "The wars themselves have weighed on consumer confidence and consumer confidence never really recovered all that much from the 2001 recession," says Vitner. Remember the 9/11 attack spurred a brief recession when people were afraid to travel and spend. While buying picked up, Vitner says the general public never fully regained confidence. "I think it added to consumers' anxiety and really probably added to the general environment of uncertainty and kept the economy from reaching its peak level," says Vitner. And consumer confidence is also inhibiting the economy's ability to recover from the recent recession. For those companies lucky enough to get contracts in North Carolina, there was a stabilizing effect. But now they have to contend with the impact of defense cuts on the horizon and the draw-down in Iraq and Afghanistan. At Curtiss-Wright in Charlotte, Dave Adams expects defense work to slow somewhat, but still be steady. "It really balances out in the long-run. You may not be building as many tanks, but you will have to upgrade those tanks that are in existence. Same with aircraft. They have to upgrade aircraft all the time," says Adams. Plus, he says the company's commercial aircraft customers are doing well. Curtiss- Wright is expanding its operations in North Carolina anticipating orders from the new Boeing facility in South Carolina.