Two Defense Contractors See More Work Coming
By CHRIS CZIBORR
A couple of Santa Ana defense companies, Wyvern Technologies Inc. and Commerce Overseas,both licensees of Los Angeles-based Northrop Grumman,are forecasting an uptick in work as a result of increased spending by the Defense Department.
Both companies are small, recording about $4 million in yearly sales, 25 employees and plans for some modest new hiring over the next year. Officials at the companies are seeing more business since Sept. 11 and are forecasting continuing increases in sales.
“We’ve had about a 25% increase in business last year compared to 2000, especially following Sept. 11,” said Wyvern president Jim Weber.
Wyvern makes all the outsourced electronics for Los Angeles-based Northrop Grumman’s F-5 fighter and B-2 stealth bomber. The company also has made electronics for the F-14 Tomcat, F-16 Falcon, F-18 Hornet and F-22 Raptor fighters, as well as the B-1 bomber and all Navy and Marine helicopters.
Commerce makes structural mechanical replacement parts for the F-5, the T-38 trainer and the A-7 Corsair. The company makes the parts in OC, using some components from Wyvern.
“We’re talking about expanding that into F-14s, F-18s, B-2s and the B-2bs,” said Commerce Chief Executive Chris Garville.
The company’s fiscal year starts in August, and Garville has reported a year-on-year sales increase since then of 25%, like Wyvern.
“We’ve tripled the size of our warehouse space since about six months ago to 15,000 square feet,” Garville said. Wyvern currently has about 10,000 square feet.
The two companies both are forecasting 20% to 30% increases in sales this year.
“A big factor is the Afghanistan situation, where military inventories of spare parts for aircraft have since gone down,” Garville said. “So we think we’re going to see a nice uptick based on that.”
Wyvern also sells to other countries’ militaries, although the lion’s share,90%,of its business is domestic.
Commerce Overseas’ business is split 50-50 between domestic and international sales, and it has offices in New York; Washington, D.C.; Sao Paulo, Brazil; Milan, Italy; Kuala Lumpur, Malaysia; Ankara, Turkey; and Singapore. The company sells to 70 countries worldwide.
Vince Battaglia, who sits on the boards of both companies, said that he expects Orange County to remain a hot spot for defense work (see related story on page 1).
“OC is a highly skilled labor market, but has a lower salary structure overall compared to L.A. And areas of Santa Ana and Costa Mesa have a lot of affordable housing,” Battaglia said. “Plus you don’t have a lot of trouble getting people to move to the county to work, and the traffic congestion isn’t as bad as in L.A.”
He also pointed to changes in the defense sector over the years, where prime contractors have consolidated into a few large companies that increasingly rely on subcontractors, which have proliferated and grown steadily.
