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|Articles - February 2014|
|Tuesday, January 21, 2014|
Page 4 of 4
In Hood River, Cloud Cap Technology’s components for small, unarmed drones offer another example of niche military products developed commercially. “We believe we’re not only creating great new products that our country’s defense requires and needs, but we’re also helping to pave a way for procurement in the 21st century that involves the supply base innovating and being able to offer ideas and products that meet the military halfway, to ultimately get what they need developed quicker and less expensively,” explains general manager Jim Siekkinen. That can mean taking the investment risk to create a new technology and then approaching the DOD with it, rather than waiting two to three years for a branch of the service to define its needs and develop its own specifications.
Drone technology became ideal for this contracting approach, as soldiers’ needs for intelligence, surveillance and reconnaissance (ISR in military speak) evolved rapidly over the last decade. Siekkinen equates today’s small unmanned aircraft to a pair of binoculars — if binoculars could search for combat hazards 20 or 100 miles over the next ridge. Founded in 1999 by two friends working at drone developer Insitu, just across the Columbia River, Cloud Cap provides the makers of unmanned aircraft with parts like autopilots, motors and stabilized camera systems.
Now a subsidiary of UTC Aerospace Systems, the company employs about 100 people and ships 100 to 200 systems each year. Siekkinen, a tall, former Minnesotan dressed in jeans and a blue vest on a cold afternoon, joined the company when Goodrich purchased it in 2009. He’s optimistic about the growth potential for unmanned systems, even as the company had to freeze some research and development projects last year because of uncertainty surrounding the 2014 federal budget.
In response, Cloud Cap is placing a greater focus on commercial markets and military spending abroad. That, too, provides a challenge because of the strictly enforced International Traffic in Arms Regulations. Every foreign sale involving a restricted item requires a detailed license outlining exactly what the customer will do with it. Smaller companies stretched in normal times to spend three to nine months completing that paperwork, then dealt with 2013 furloughs among the federal employees who review it. Restrictions have loosened in recent years. But Siekkinen says they still represent a significant competitive disadvantage in international sales, which represent about half of the market for small, unmanned systems.
Taking in the broader picture, though, Siekkinen says the outlook for unmanned aerial systems has nowhere to go but up. They’re significantly cheaper than manned planes, and they fit well within a larger shift in U.S. military strategy emphasizing special forces. “Dull, dirty, dangerous jobs are what UAS do best. So in that sense, they hold great promise for DOD to be saving money in the coming years,” says Siekkinen, who compares the technology’s current development to advances made in aircraft after their combat debut in World War I.
Oregon will be a part of that. While the state has earned a reputation as a frequent enclave of antiwar politics, Siekkinen and leaders at several companies contracting with the Pentagon described their communities and Oregon’s elected officials as entirely supportive of their businesses. For example, the PNDC recently brought its agenda to reduce export restrictions and revamp procurement practices to a meeting at the office of Rep. Earl Blumenauer. “I think he would identify as the most progressive member of the Oregon delegation,” PNDC executive director Hunt says, “and that was just not a factor at all.”
With billions of federal spending in play, politicians tend to focus as much on the jobs that money creates as they do on the military clout it enables. Recent years have seen Oregon companies grow more coordinated and assertive in pursuing that business, even as the industry overall faces a shrinking defense budget. DOD spending cuts forced many to innovate in ways that may well bring more military business to the state in the form of exports and products developed commercially by nimble technology companies like Eid Passport and Cloud Cap. Looking ahead, the defense industry will remain a sliver of Oregon’s economy. Nonetheless, this niche market will continue to offer thousands of contracting opportunities to businesses across the state willing to take on the challenge.
Friday, July 18, 2014
BY JASON NORRIS | OB GUEST CONTRIBUTOR
Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”
Wednesday, July 09, 2014
BY LINDA BAKER | OB EDITOR
Scott Kveton, the CEO of Urban Airship is taking a leave of absence from the company. As the story continues to unfold, here’s our perspective on a few of the key players.
Monday, June 16, 2014
The Oregon economy could get a boost from a new trade agreement being negotiated between the U.S. and the European Union.
Friday, June 27, 2014
BY JASON NORRIS | OB BLOGGER
Over the last several months we have seen a wave of cross-border acquisitions, primarily U.S.-based companies looking to purchase non-U.S.-based companies. There are a few reasons for this, but the main culprit is the U.S. corporate tax system. The United States has one of the highest corporate tax rates in the world.
Thursday, July 10, 2014
BY TOM COX | OB BLOGGER
Tom Cox interviews Dr. Mark Goulston, author of Just Listen, Discover the Secret to Getting Through to Absolutely Anyone.
Wednesday, July 02, 2014
BY JESSICA RIDGWAY | OB WEB EDITOR
Dress for Success Oregon promotes the economic independence of disadvantaged women by providing professional attire, a network of support and career development tools.
Monday, July 14, 2014
BY TERRY "STARBUCKER" ST. MARIE
I really didn’t know that much about angel investing, but I did know a lot about the entrepreneurial spirit.
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Lane Powell Shareholder Susan K. Eggum has been elected as vice chair of programs and projects for the International Association of Defense Counsel’s (IADC’s) Employment Law Committee.
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Fifteen Lane Powell attorneys have been named 2014 “Oregon Super Lawyers,” and another five attorneys have been named as “Oregon Rising Stars” by Super Lawyers magazine.