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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, August 15, 2014
In this week's poll, we asked readers: "Who should pay for the troubled Cover Oregon website?" Here are the results.
Thursday, July 03, 2014
BY TED AUSTIN & MIKE BAELE | GUEST CONTRIBUTORS
The Office of Economic Analysis announced that Oregon is currently enjoying the strongest job growth since 2006. While this resurgence has been welcome, the lingering effects of the 2008 “Great Recession” continues to affect Oregon businesses, especially with regard to estate planning and business succession.
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.
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?”
Monday, June 30, 2014
Oregon Business magazine won two silver awards for excellence in writing in the National American Society of Business Publication Editors Western region competition.
Friday, August 22, 2014
BY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR
When business intersects with family, a host of situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.
Wednesday, August 20, 2014
By Kim Moore | OB Editor
The 2015 survey launched this week. It is open to for-profit private and public companies that have at least 15 full- or part-time employees in Oregon.
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Vigilant enters a New Year with a new president.
How George Fox has become one of Oregon's largest private universities.
Forest Grove sees growth in the burgeoning food and beverage scene.
Lane Powell Shareholder William T. Patton has been appointed to the board of directors for Cascade AIDS Project, an organization that provides educational services and outreach to thousands of Oregonians living with HIV/AIDS.
Fifty-one Lane Powell lawyers were recently selected by their peers for inclusion in The Best Lawyers in America® (Best Lawyers) 2015; of those selected, 23 lawyers are from the Firm’s office in Portland, Oregon.
Barran Liebman is proud to announce that Andrew Schpak, a Partner of the firm, has been named Chair of the American Bar Association’s Young Lawyers Division for the 2014-2015 bar year.