By Howard Riell
From the November/December 2024 Issue
Defense manufacturers and service companies must consider a wide variety of factors when making critical site selection decisions. Whether choosing a new location or expanding in its current community, two significant elements—proximity and access to military installations and workforce—inevitably come to the fore.
It’s a daunting task, with long-term ramifications. Getting a decision of this magnitude wrong can lead to a Pandora’s Box of regrettable consequences.
“Choosing the right location is critical in site selection because many companies don’t make these decisions often,” says Eric Voyles, Executive Vice President and Chief Economic Development Officer for the TexAmericas Center in New Boston, TX, one of the largest mixed-use industrial parks in the Americas, with 12,000 acres and 3.5 million square feet of commercial and industrial property. Founded in 1997, TexAmericas Center is a State of Texas-sanctioned Local Redevelopment Authority, managing former military property as part of an effort to redevelop the land and boost employment and economic opportunities in the Texarkana region. Companies from variety of industries operate there, including defense industry firms Lockheed Martin, BAE, Amentum, EnviroSafe Demil, Cherokee Nation Federal, AGR, and ExpalUSA.
“Companies, especially corporations, are required to maintain and often grow their profit margins,” Voyles adds. “Margin growth comes from continuous improvement, cost-cutting, value-engineering, and other manufacturing-management tools.”
A firm has its greatest opportunity to affect margins prior to making a site location decision, Voyles emphasizes. A company “will … live with the location decision for years to come as the new location becomes baked into their cost structure, business culture, and strategic planning,” he says.
Defense Business, Nuanced Requirements
“Defense manufacturers and service companies look for the same factors as other companies—site and access, available workforce, and quality of life,” says Tony Boone, Economic Development Manager for the City of Sierra Vista, AZ. “The more nuanced requirements such as workforce with security clearances become critical.”
Military communities can be a great asset, Boone explains, as they include separating service members with technical skills and active clearances. “Workers with skills and clearances allow a new or expanding business to move faster. Even smaller installations have hundreds of potential workers leaving service schools each year that provide a continuous talent pipeline. In our community we have a very skilled workforce, with cyber, IT and intelligence professionals who have from four to 30 years of experience.”
Clusters of ongoing businesses in the defense sector provide the opportunity for site selection or expansion projects, Boone adds. “In our case, Sierra Vista is a small market with access to a very technical workforce on Fort Huachuca. It is that, along with access to our joint-use airport, that set the stage for the Blackstar Orbital site-selection decision. Larger installations in Texas and North Carolina, for example, have workforce pipelines that are already supporting the military-industrial complex.”
“We find defense contractors value proximity to their customers,” notes Shannon Joyce Neal, Vice President of Strategic Communications for the Dayton Development Coalition (DDC) in Ohio, the leading economic development organization in the 14-county Dayton Region.
“Wright-Patterson Air Force Base is at the heart of the Dayton Region,” Neal explains. “It is home to the headquarters of Air Force Materiel Command, Life Cycle Management Center and Air Force Research Laboratory, as well as the National Air and Space Intelligence Center and the National Space Intelligence Center. Defense companies value being near decision makers, as well as living in a military community that is home to active-duty, civilian and retired military personnel.”
The Dayton Region includes Springfield, home to a rapidly growing Advanced Air Mobility hub. Springfield brings together testing resources, AAM-focused facilities and extensive manufacturing capabilities to support the development and production of eVTOL (electric vertical take-off and landing) vehicles.
The National Advanced Air Mobility Center of Excellence (NAAMCE) opened in 2023 at the Springfield-Beckley Municipal Airport. The nucleus of operations for a growing list of AAM industry leaders, it features office, laboratory, operational, and collaborative space, a 25,000-square-foot hangar, and easy access to Airpark Ohio, a SiteOhio-authenticated site primed for manufacturing operations. The airport is home to SkyVision, an air traffic control system for unmanned aircraft, and is the gateway to 225 square miles of airspace, allowing BVLOS flight up to 18,000 feet in altitude, with no aircraft size restrictions.
Local economies are considered desirable when, first and foremost, the community is accepting of the defense industry. There must be a solid industrial base, sufficient population size and a resilient and growing economy, and population base. Locations must, of course, be accepting of cultural diversity, and there should be industrial-grade utilities with excess capacity.
The Western Charles County Technology Corridor in Maryland is an example of an area that is rapidly emerging as a strategic location for companies in the defense, advanced manufacturing, and technology sectors thanks to a combination of geographic advantages, access to cutting-edge research and development resources, and a business-friendly environment.
“Naval Surface Warfare Center, Indian Head Division (NSWC IHD) in Charles County, MD, and its Department of Defense contractors are dedicated to building a highly-skilled and specialized workforce to support their mission-critical operations,” says Kelly Robertson-Slagle, Director of Charles County Economic Development Department, which promotes the economic vitality of this rapidly growing region in the Washington, DC metro area. “This focus is particularly important in the fields of energetics, ordnance technology, and advanced defense research.”
Among the defense-related organizations that have opted to establish or expand operations in Charles County, particularly in the Town of Indian Head, is the United States Bomb Technician Association (USBTA).
Workforce Considerations
Selecting a site represents a major investment for any company—and not just in terms of capital investment in their facility, Neal points out.
“Location can drive talent attraction and networking opportunities, and set the tone for a company’s culture,” she suggests. “It can significantly impact the cost of an expansion or relocation. That’s why the DDC works with companies to help them understand that the benefits of locating in the Dayton Region go beyond the advantages of the site itself. We have a vast team of partners ready to support new and expanding companies in the region, an affordable business climate, and a strong defense talent pool.”
Neal has found that there are two main aspects to workforce considerations: candidates ready to apply for positions immediately and the development of a pipeline of future candidates. “Strong partnerships with our local universities, and their collaboration with Wright-Patterson and leading defense contractors, help ensure a sustained pipeline of skilled, qualified candidates for defense employment,” she says.
The skills and workforce attributes that companies look for include:
- Engineering and technical expertise.
- Scientific research and development skills.
- Cybersecurity and IT proficiency.
- Skilled technicians and tradespeople.
- Project management and logistics.
- Workforce development and its adaptability.
- Workforce with security clearances, due to the sensitive nature of defense work.
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When it comes to access to workforce, site selectors will want to look for an available, qualified, skilled group of sufficient size. And it’s important to identify concentrations of skills, as well as local occupations as location quotient or percent of the accessible labor force.
As Voyles mentions from TexAmericas’ experience working with site selectors: “They want to know trends looking back, but also looking forward.”
Other key factors: unemployment in general, and by sector SOCs (Standard Occupational Classifications; underemployment statistics; whether workers are commuting to jobs out of the laborshed; and training and education pipelines.
Site selection professionals will also want to ask about how the community will grapple with replacing people at existing employers who leave for greener pastures.
“They will want to know recent or planned closures and announcements,” Voyles says, and access to past, current or future military professionals. “Former service personnel make outstanding employees, in general. But these individuals have an innate understanding of DOD requirements and policies from their time in the service. Many companies are specifically looking for these people to be added to their workforce. Military clearance for employees is often needed as defense companies set or expand operations.”
Riell is an experienced freelance writer who has written on a wide variety of business and economic topics, including site selection and economic development.
