Rosie Cataldo - Staff Writer
Published October 1, 2000 | October 2000 issue
Montana. Green pastures, grazing farm animalsand a rocket launch site in the back 40. Sound too futuristic? It won't be too far out if the state of Montana achieves its mission.
That goal is to develop aerospace technology as a key industrial sector within the state. With 28 active aerospace companies, the state has a "small but strong aerospace industry. MSE Technology Applications [in Butte] is the strongest aerospace-related company in the state. They work with top rocket scientists," according to Mike Gold, who recently stepped down as the director of the Montana Aerospace Development Authority (MADA).
The state wants to add to its aerospace industry because "the industry offers quality long-term jobs. I believe it is a fieldas far as commercial space activitythat is in its infancy. It is similar to the Internet and [information technology] revolution," Gold said.
Space companies are locating in Montana because big cities are overcrowded and expensive, Gold said. "Montana offers potential companies open space, loyal employees, an aerospace-educated workforce and reasonably priced land."
Montana's geographic location also makes it a good place for space launches. "Where [Montana] sits on the globe and its altitude provide both an ease of entry into space as well as an exit," said Evan Barrett, executive director of the local development corporation in Butte.
The industry appears poised for future growth, according to sources, as industry competitors race to engineer faster, lighter, more reliable rockets as well as reusable engines. "It costs $10,000 per pound to launch a space craft. The industry needs to bring this cost down tenfold, to $1,000 per pound," said Gold. When that happens there will be an explosion of new technology, he said.
A big push is being made by U.S. Sen. Conrad Burns to bring aerospace-related companies to Montana, said Dwight McKay, Burns' state director. Burns serves on the NASA Committee, McKay said, and added that NASA is looking for a partnership with the private sector to conduct launches. Burns also created a space technology board and has kept Montana aerospace companies informed about federal contract opportunities related to space technology, McKay said.
One of the best-known reusable launch vehicles, VentureStar, developed by Lockheed Martin, may have a launch site in Montanapossibly at Malmstrom Air Force Base in Great Falls, McKay said. Montana officials will know within a year, and if it happens, McKay said, the state economy will get a boost.
"One of the biggest ways the aerospace industry will benefit Montana is that it will create more primary jobs that pay more, and you have more spinoffs for other jobs," McKay said. "Right now, as far as new space technology companies to Montana, it is a wait-and-see type situation, to see what venture capitalists want to do."
For example, Rotary Rocket of San Bruno, Calif., is seeking private funding for a test launch site in Montana for which NASA will provide matched funds for technical help, said McKay. But the launch site in Montana is pending because of a lack of funding, according to Richard Stockmans, Rotary Rocket's director of business development.
Part of the industry's growth in the state has been from within. MSE Technology Applications in Butte is the largest aerospace company in Montana and deals with advanced energy and aerospace programs. The company, built and owned by the U.S. Department of Energy (DOE), began in 1974 during the energy crisis. In the late 1980s, MSE diversified into areas other than energy, and in 1996 the company purchased its facility from the DOE. Currently, MSE has 230 employees, the majority of whom are scientists and engineers. In June, 175 other MSE employees left to form a subsidiary company in Montana called HKM Engineering Services.
"We've taken skills under the DOE program and reapplied that to the aerospace industry," said Dave Micheletti, manager of advanced energy in aerospace programs for MSE and current executive director of MADA. He said the foundation and springboard of Montana's aerospace economic development initiative is MSE's initiative. "In just five years, we've become industry leaders," Micheletti said. "This represents some of the most advanced research done anywhere in the United States. Having a world-class aerospace facility becomes a very attractive recruitment tool."
Continuing its growth, MSE is constructing a new test facility next to its site in Butte, which will be used to develop and test a supersonic nozzle for the U.S. Air Force. The new facility is scheduled to begin operations by June 2001.
The state recently passed House Bill 555 authorizing up to $20 million in state bonding to aerospace companies that create new jobs, to be repaid by increased tax revenue generated by new aerospace projects. "We don't have any one [company] specifically [in mind] for the funds to be utilized yet," Gold said.
The bill's genesis came from the impending VentureStar project, according to Barrett. "Jobs created by the project would offset payment," Barrett said. "It clearly needs some tweaking, but has some potential."
One example that the bill needed tweaking was evident in the breakdown in recent negotiations between state officials and Bigelow Aerospace of Las Vegas, Nev. Bigelow's move to Montana fell through because of timing and the minimum employee requirements to receive funding, which "is a lethal thing to impose on a company," said company president Robert Bigelow. "Maybe in the future, some years down the road, we could do something in Montana," he said.
There also are a number of other incentive programs for the industry to tap:
The Montana Board of Investment loan program can provide up to $16 million for working capital equipment for any single project.
The Small Business Innovative Research Program (SBIR), a federal program designed to benefit companies with fewer than 500 employees, offers over $850,000 in different phases.
The Community Development Block Grant Project awards loans up to $200,000 at 8 percent for a single job project.
The Board of Investment Infrastructure Program lends money to local government, which then lends to local companies.
So far, five aerospace-related companies in Montana, including MSE, have been awarded SBIRs, according to Tim Nagel, program coordinator for the Montana Department of Commerce. MSE will be the first aerospace company to use the Board of Investment's loan program, and, along with the U.S. Air Force, will also use the infrastructure program. [For further discussion of economic development programs in Montana and other Ninth District states, see the April and July issues of the fedgazette.]
Higher education also plays an important role in the space industry. Montana state universities in Bozeman and Billings both have NASA TechLink centers, funded by NASA and the U.S. Department of Defense. Boeing Corp. is the number one employer of MSU-Bozeman graduates. Chandra Morris, director of communications of TechLink at MSU-Bozeman, said TechLink identifies the needs of technology companies and serves as a matchmaker. TechLink has access to people in research centers whose project may match with technology in their region, which includes Montana, the Dakotas, Wyoming, Idaho, Oregon and Washington state.
University students are also involved in the aerospace industry. Founded by NASA, the Montana Space Consortium at MSU-Bozeman allows students to assist in the development of space projects. According to Morris, this year students are helping with the Slender Hypervelocity Aerothermodynamic Research Probe (SHARP) aerospace vehicle that will be launched out of Casper, Wyo. SHARP also refers to the sharp edges NASA wants to use on the leading portions of its space vehicles to make the takeoff and re-entry more efficient. TechLink brokered a deal between NASA-Ames Research Center in Mountain View, Calif., and Wickman Space Craft and Propulsion, Casper, Wyo., for students to build models of SHARP, which loads into the nose cone of a rocket and is later launched for independent exploration.
While some might be surprised at the state's position in this high-tech field, Micheletti said, it's the result of good foresight and planning. For example, Montana lowered its business equipment tax to make the state more competitive.
"What Montana has done is to advertise that it is a good place to do business by recruiting aerospace organizations, contacting companies and informing them of the favorable business climate," Micheletti said.