Patriots’ Hits in Gulf War Also Impact Valley Firms : Mideast crisis: Some local companies may benefit from the hostilities. But others could be hurt.


The Patriot missile’s direct hits in knocking out Iraqi weapons in the Gulf War are being directly felt in the San Fernando Valley.

In Chatsworth, for example, Datametrics Corp. makes rugged computer printers for the Patriots’ launching trucks, providing soldiers with messages and computer data. The company expects demand for the Patriot, which is built by Raytheon Co., to increase because of the missiles’ well-publicized early success in the war--which would lift orders for Datametrics’ products.

Within the next few days, Datametrics expects Raytheon to place a $500,000 order for more Patriot printers, which cost several thousand dollars apiece, and to order up to an additional $1-million worth over the next month, Datametrics President Sidney E. Wing said.

“The war has certainly accelerated” demand for the printers, Wing said.


Datametrics isn’t the only local company to benefit from the war, a spot survey of companies in the Valley and nearby regions shows. Other businesses say they have yet to realize any upturn in activity because of the war, although that could change if the war drags on for some time. And a few companies are being hurt by the fighting.

Those benefiting include TransTechnology Corp., based in Sherman Oaks. It makes electronic components for the Patriot and Tomahawk missiles and other military equipment currently used in the gulf, and says orders are up since the war erupted Jan. 16.

“We’ve received more orders in the last several months than we would have received if it weren’t for the gulf situation,” TransTechnology Chairman Arch C. Scurlock said.

In Van Nuys, Pinkerton’s Inc., a securities services concern, reports a surge in demand for its security guards from corporate clients worried about war-related terrorism. Pinkerton’s, which employs about 38,000 security guards nationwide, is aggressively hiring more guards to fill the new orders, said Peter C. Sawyers, Pinkerton’s marketing director.


The extra demand “will continue as long as there is a perceived extra threat of terrorist activity, and no one really knows how long that’s going to be,” Sawyers said.

Datron Systems Inc. in Simi Valley makes satellite-communications systems that are on many of the Navy ships in the Persian Gulf, as well as antennas and switches that are used on the Patriot and Tomahawk missiles. So far, Datron hasn’t seen a jump in demand for any of its goods, but “to the extent they might want to restock the missiles, we will have some benefit,” said Thomas V. Baker, Datron’s chief financial officer.

Datron’s stock soared 50% last week alone, to $9 a share from $6, in part because the company posted higher sales and earnings, Baker said. “But certainly some part of it is undoubtedly anticipation of business that might come out of the conflict,” he said.

As for the nation’s biggest defense contractors, many of which have plants in the Valley area, experts agree it would be premature to say the war will mean big increases in new Pentagon spending for big-ticket items such as ships and planes. Inventories for much of the firepower are thought to be ample.

For instance, Northrop Corp. spokesman Ron Owens said it’s too early to tell whether the war would affect production of the controversial B-2 stealth bomber, whose initial models are being built by 2,400 Northrop workers in Palmdale. “That is a question you need to ask the Air Force,” he said.

Several other local companies also said the war has yet to have an impact. Marquardt Co., a Van Nuys maker of bombs and satellite equipment, doesn’t expect any increase in business because of the fighting, said spokesman Joe Pospichal.

The war also is not expected to have a major impact on Rocketdyne, the Rockwell International unit in Canoga Park that mainly builds engines for the space shuttle and other space programs, Rockwell said. However, other Rockwell divisions make a variety of aerospace equipment and weapons now used in the gulf--such as the Hellfire missiles on the Army’s Apache helicopter, which figures to play an important role in any ground battle.

Fairchild Corp.'s Voi-Shan plant in Chatsworth, a leading maker of nuts and bolts used on virtually every type of military aircraft in the gulf, also reports little change. “We see a blip in orders now and then, but there doesn’t seem to be a concerted effort to resupply,” said Ben W. Prescott, president of Fairchild’s fastener group.


Because fasteners are routinely replaced as airplanes and their engines are overhauled in the gulf, “long-term you almost have to see something” in terms of new orders, Prescott said. “But it’s hard to say when that might happen.”

And for a few companies, war is hampering sales. 0000General Motors Corp. last week said it will lay off 850 of its 3,200 workers in Van Nuys, and halve its production of Chevrolet Camaros and Pontiac Firebirds, because of a sales slump blamed in large part on consumers’ fear that the war will further weaken the economy. Ford Motor Co. also announced more temporary closures of several U.S. plants because of bloated supplies.

That’s also bad news for Superior Industries International Inc. in Van Nuys, the leading maker of wheels for GM, Ford and Chrysler Corp. Superior already has pared production in recent weeks because of the weak economy and is mulling whether to cut its output further, said R. Jeffrey Ornstein, Superior’s chief financial officer.

“Lower car sales translate into lower Superior sales,” Ornstein said. “We don’t lose a sale for every loss of a car sale, but the overall decline will still affect us.”

Some local oil companies also could suffer year-to-year profit declines if crude-oil prices, which fell sharply after the war began, remain near current levels or drop lower in the coming weeks.

But the oil business is among the hardest to forecast these days, as shown by the volatile movement of oil prices since Iraq invaded Kuwait last Aug. 2. Local energy companies that could be impacted include Benton Oil & Gas Co. in Ventura, Fortune Petroleum Corp. in Agoura Hills and H&H; Oil Tool Co. Inc., a maker of energy equipment in Santa Paula.

Conversely, companies such as Huntway Partners L.P. could benefit if oil prices don’t spike upward any time soon. Huntway, based in Valencia, buys crude oil and then refines it into liquid asphalt for use in paving roads. Huntway tries to pass on higher crude costs to its customers via higher prices for its asphalt, but isn’t always successful.

“The best thing for a refiner is for crude to be stable,” Huntway President Juan Y. Forster said. “When you’re jerking up and down as fast as these markets have, it’s difficult.”



COMPANY PRODUCT/SERVICE Datametrics Patriot missile printers Datron Systems Missile components TransTechnology Missile components Pinkerton’s Security guards Huntway Partners Liquid asphalt