|LOCALLY, DEFENSE FIRMS ARE THINKING GLOBAL
(October 4, 2014) –When a Chesapeake defense contractor sought business overseas, it found a willing audience for its line of equipment for first responders. The next task was a bit more daunting: Translating its highly technical training manuals into Polish.
In Newport News, a firm that plays "bad guys" during U.S. Navy training exercises decided to seek international clients. As former U.S. fighter pilots, they could get around just about anything. But when it came to State Department rules, they welcomed assistance in navigation.
In each case, these companies relied on a state program called the Going Global Defense Initiative, run by the Virginia Economic Development Partnership.
As the U.S. military downsizes after more than a decade of war in Iraq and Afghanistan, Virginia's defense companies see potential in overseas markets – at least if this program is any indication.
Going Global enrolled 160 defense companies in its initial 10 months, state officials said, and limited resources prevented more sign-ups. The program has entered its second year, and Gov. Terry McAuliffe recently announced it would receive $2 million in state and federal funds to provide services such as technical translation, research on international markets and setting up contacts at foreign trade shows.
The Defense Department supports nearly 40 percent of the jobs in Hampton Roads, according to a November 2013 study. For the defense community to continue as major driver, firms that once relied solely on Pentagon business must adjust to a new reality, said Paul Grossman, VEDP vice president of international trade.
"This is not a problem," Grossman said. "This is a predicament. A problem can be solved. A predicament is something you have to live with."
Some Hampton Roads defense firms have responded to military downsizing by turning to commercial markets. A good example is the unmanned aerial systems industry. These companies have adapted war-fighting drone technology to everything from agriculture to entertainment.
But other defense companies see their products or services fitting in quite nicely overseas. Their CEOs have spent years learning how to speak the language of the U.S. military. Going overseas can be like starting up a new business.
"A website that makes sense to the Pentagon doesn't make sense at all to the Saudi Arabian air force or a port city in Singapore," Grossman said.
VEDP, a marketing organization created by the General Assembly in 1995, has offices in China, Germany, Japan, India and the United Kingdom. In August, officials held kickoff events for the second year of the Going Global program in Tysons Corner and Norfolk. The announcement included a military trade show in the Middle East with limited slots.
"Those slots were filled in 24 hours and there was a waiting list of five," Grossman said.
Going Global does not pay for a company's travel costs. It helps officials make connections or prepares materials to put them in a better position to make a direct sale or build a long-term relationship.
The Phoenix Group in Chesapeake turned to VEDP after deciding to pursue international opportunities in the face of U.S. defense cuts. Its broad array of products includes equipment for first responders, such as protective suits, breathing filters and damage-control lockers. It is particularly optimistic about its "Last Chance Rescue Filter," a device that provides 15 minutes of breathable air for firefighters who are trapped and exhaust their primary air supply.
The company went on a trade mission to Poland and Germany last year that has proved promising, said Stephen Clock, national sales director. Now they have a manager in Europe trying to drum up business. They have produced a video and received a grant from VEDP to translate its technical manuals into Polish.
Clock is confident when it comes to the Last Chance filter because the product is unique. Other haz-mat equipment also has potential. But getting past that language barrier was a big deal, he said.
The company's manuals are highly technical "and it's important to get it right," he said.
VEDP also did some preliminary market research for the company before the overseas trip.
"We ended up having 15 to 20 meetings in Poland and Germany," Clock said. "No way could we do that on our own."
In Newport News, ATAC faced a different challenge when it looked overseas. The company's biggest client is the U.S. Navy, employing experienced fighter pilots to go up against F/A-18 Hornets and other aircraft in training exercises, said Matt "Race" Bannon, ATAC director of strategy and marketing.
"We're the bad guys, testing the carrier strike groups before they deploy," Bannon said. "We can assist in that readiness."
The State Department has no qualms about that. But when it comes to training foreign air forces, ATAC has to fly by the rules.
The U.S. has what might be called a "bad guy list," Bannon said. That would include countries with a record of human trafficking or human rights violations, for example. VEDP provided assistance to ensure that ATAC was complying with export law, steering the company toward law firms that specialize in that area.
Bannon, a former Navy pilot who flew F-4 Phantom and F/A-18 Hornets, said the company has also provided advice and support on international trips. For competitive reasons, Bannon didn't want to say where ATAC was looking, but the Virginia program has helped make it easier.
"They're creating the mechanism to do this," he said. "They create a support structure."
ATAC's local offices and hangar facilities stand in the shadow of the Newport News-Williamsburg International Airport. This week, a pair of British-built MK-58 Hawker Hunter combat jets sat in the hangar next to an Israeli F-21 Kfir. All told, the company's inventory totals 25 tactical aircraft which it operates out of Newport News and several locations worldwide.
As defense budgets shrink, ATAC's service ends up being more valuable, Bannon said. By using ATAC's aircraft as "enemy" planes or even missiles skimming near the water, the Navy saves flying hours by not having its own F/A-18s fly against each other.
"We become a better value proposition," he said.
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