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Capstone in the News … WISCONSIN TO GAIN FROM MILITARY SPENDING

01 Mar 2017

Capstone in the News … WISCONSIN TO GAIN FROM MILITARY SPENDING

WISCONSIN STANDS TO GAIN FROM MILITARY SPENDING HIKE 
Milwaukee Journal Sentinel
February 28, 2017

Wisconsin companies that supply the U.S. military with everything from boots to combat ships are well-positioned for increased defense spending.

Each of the military services have delivered to Congress plans for increasing the 2017 defense budget by more than $30 billion to acquire armored vehicles, aircraft, ships and more.

“A fiscal-year 2017 Department of Defense budget amendment is expected to be sent to the Office of Management and Budget in the coming days, requesting at least an incremental $20 billion,” a report from Milwaukee-based Robert W. Baird & Co. Inc. said Tuesday.

Wisconsin companies, defined as prime federal contractors, received about $3.73 billion in federal government business in fiscal 2016, up 11% from 2015 and 27% higher than in 2014.

Those figures didn’t include hundreds of millions of dollars spent through Marinette Marine Corp., in Marinette, for building U.S. Navy littoral combat ships, because Marinette is a subcontractor for the program run by Lockheed Martin Corp. of Bethesda, Md.

It’s uncertain what role littoral combat ships will have in the Navy’s plans, but President Donald Trump has promised to reinvest in a “depleted” military to halt the erosion of combat readiness.

Overall, Wisconsin could benefit “hugely” from a 10% hike in defense spending, said Alan MacLeod, managing partner at Capstone National Partners, a Milwaukee consulting firm.

“If this administration wants to improve the equipment of the military, this is a great opportunity,” MacLeod said.

In early 2016, Oshkosh Corp. landed $677 million in new military business, including rebuilding hundreds of tactical trucks.

The work for the U.S. Army is taking place in Oshkosh through at least Dec. 1, 2024, and includes hundreds of millions of dollars for refurbishing some of the Army’s biggest armored trucks used in the war in Afghanistan.

The overall increase in defense spending in Wisconsin last year was largely from Oshkosh Corp., said Aina Vilumsons, executive director of the Wisconsin Procurement Institute in Milwaukee.

Wisconsin also has more than 200 companies with ties to the aerospace sector, including about 140 suppliers to Boeing Corp.

More than 24,000 people are employed in Wisconsin by companies that support aerospace.

A coalition of aviation and aerospace companies, industry associations and Wisconsin colleges, have formed a partnership to explore the establishment of an aviation and aerospace center in Milwaukee.

The proposed Center of Excellence for Integrated Aerospace and Defense Technologies would bring together industry and academic researchers, engineers and programmers to develop and test new aerospace and cybersecurity systems in one location.

“Cyber efforts are going to play a big role” in defense spending, MacLeod said.

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