It’s been 65 years since the Shumaker Naval Ammunition Depot in Camden, Arkansas, closed down, after just over a decade of postwar service manufacturing missiles for military aircraft. But its presence can still be felt in this region of the state, known for its rolling hills and easygoing culture: Much of the property once occupied by the base not only continues to host military suppliers, whose predecessor companies populated the region from the early days, but they are, in fact, thriving.
Big prime contractors Lockheed Martin and Aerojet Rocketdyne both have significant presences at Highland Industrial Park, having each recently announced expansions, and many companies that support those operations have also grown roots there—with room for more startups still remaining as the work expands. This is an unconventional phenomenon, given that most defense industry centers are situated near active military presences or technology hubs, the latter of which often generates much higher labor costs. For a largely rural area to be able to sustain and grow these businesses means that both the community, and the companies, must be doing something right—perhaps offering lessons for those facing similar challenges elsewhere. There are more than 3,000 defense-related jobs in Highland Industrial Park alone.
According to James Lee Silliman, executive director of the Ouachita Partnership for Economic Development, a good part the region’s success stems from the original base’s buildings and infrastructure, which were organized explicitly for munitions manufacturing, which requires lots of space dedicated to executing the work safely, since explosives are involved. Aerojet Rocketdyne manufactures 75,000 solid rocket motors for tactical missiles each year, and though it had announced plans to grow its workforce from 800 to 900 by the end of 2021, it in fact achieved that by the end of 2020–and is still hiring. Meanwhile, Lockheed Martin is building a new 70,000 square-foot production facility that will add 326 new jobs to its current 700 in the Camden region. The company builds a variety of rockets and missiles, including the Patriot air defense system, in Camden.
The Workforce Is The Key
But Silliman adds that persistent developmental support on the community side has helped the area grow by accommodating the needs of the burgeoning industry. “We’ve offered local incentives for both job creation and workforce training, so we’re able to assist the companies in those ways,” he notes, adding that Southern Arkansas University Tech, a community college that offers such workforce training, sits right next to Lockheed Martin. “It’s just evolved over the years, and now Camden has become the aerospace and defense industry hub for our state.”
Lockheed’s leadership has responded to these efforts. “There’s an incredibly supportive environment for businesses here in Arkansas,” says Justin Routon, Camden Operations site director at Missiles and Fire Control at Lockheed Martin. “We have an outstanding partnership with Governor [Asa] Hutchinson and his Economic Development team. These partnerships along with many others in the area, including the entire Arkansas Congressional delegation, assist with affordability, job retention and growth, investment in new facilities and equipment, recruitment, training and workforce development and ensure that Arkansas continues to provide an excellent climate for business and is attractive for companies like ours as they expand their operations.”
Routon adds that this commitment has generated an efficiency on the part of Lockheed’s operations there, generating a long record of precision manufacturing, quality, and on-time deliveries—all essential to military defense technology. This led directly to Lockheed gravitating to the region for its expansion last year. Aerojet Rocketdyne was similarly motivated. [Lockheed recently announced it will purchase Rocketdyne, but at the moment they remain separate companies.] A Rocketdyne spokeswoman noted the support of the OPED, Calhoun County, and the Arkansas Economic Development Commission, Calhoun County in the development of its high-tech development and manufacturing facility, which is also developing next-generation propulsion technologies for hypersonic missiles now in development by the Department of Defense. She also noted the role of Southern Arkansas University and Southern Arkansas University Tech in sustaining its workforce needs.
Both companies, however, cited the strength of the supplier network in the region, as well. “Aerojet Rocketdyne Camden relies on local businesses for many supporting services and having the skills locally helps us do our job,” the spokeswoman said. “We partner with more than 140 Arkansas businesses whose services and products we rely on daily, and since 2015, we have sourced more than $167 million dollars to Arkansas suppliers.”
With six major defense contractors in the area, there are dozens of supplier companies that contribute to the defense industry, as well as other non-defense clientele. But it’s here that the defense industry trickles down most to those with an entrepreneurial bent. Silliman says OPED small business development office provides free services for entrepreneurship, including small business cultivation and development. This includes advisers, assistance with business plan development and market research, and even assistance with acquiring financing to launch the company. Everything from microbreweries to retail businesses are supported, as the region’s needs are growing right along with the industry growth, and the agency recently supported its first defense-specific startup, CVR Industries.
A Machining Startup
The owner of that machining company, Chad Raney, took advantage of the opportunities present in the defense sector during a relocation from Arizona to Arkansas last year. His wife works in the aerospace industry, a factor that contributed heavily in their decision to come to Camden, and Raney is currently working to establish his operation as a supplier to the larger defense companies there, producing both prototype parts and production assemblies. He’s planning to integrate robotics and other state-of-the-art technologies to boost his appeal to customers—to get 16 hours out of an 8-hour day, he says. “They like the fact, especially with R&D, that you’re just right down the street if you need to change something on the fly,” he says, noting that he expects to eventually grow to 50 people from the handful he has on board at the moment.
Before his relocation to Camden, Raney was in the security industry in Arizona. He acquired the machining business from the owner who was about to retire, seeing it as an entry ramp to the region’s thriving defense industry. He then set about modernizing it and honing his offerings for the defense customers. “OPED helped establish contacts in the area and promote the new business” Raney says. “They’ve tended to focus more on big business, and they’re working on changing that to make it geared a bit more toward small businesses and startups.”
Key among his challenges has been building up the business to the standards required by large prime defense contractors, and plugging the gap with other work until he’s fully spun up. He also needs to be ISO 9000-certified, which can’t happen until he’s been in business long enough for the auditors to examine his recent performance. His security business in Arizona has been helping fund the new operation in Arkansas during the establishment phase, and he estimates he’s about halfway through all those processes, so should be fully operational within another six months.
When that happens, CVR Industries could rank among the 7,803 suppliers nationwide that the Missiles and Fire Control business alone at Lockheed Martin acquired 95.8 million parts from in 2020, to the tune of $7.8 billion. That’s pretty good company to be in, Raney says. Even more broadly, the prospects for defense-industry growth remain promising even as a new administration settles in, ensuring startups in Arkansas and elsewhere solid prospects. Indeed, the Pentagon is in the midst of a decades-long modernization effort, and companies in the sector have long felt their continued growth was assured, regardless of who ended up in the White House.
This story was produced as part of the Arkansas Reporting Project, focusing on entrepreneurship in Northwest Arkansas and the Arkansas-Mississippi Delta, sponsored by the Walton Family Foundation.
This story was clarified to reflect Aerojet Rocketdyne’s 2020 employment.
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.