Global tension a boost for defense contractor

September 24th, 2018

Diplomatic relations between the United States and Russia over the past 64 years have ranged from lukewarm to ice cold.

David Jost monitors that relationship like it's his job. In some ways, it is.

As president of Ultra Electronics Undersea Sensor Systems Inc., Jost oversees production of sonobuoys, devices used in anti-submarine warfare detection and tracking. The Columbia City defense contractor has had a standing order from the Defense Department to make sonobuoys since 1954.

“We're kind of entering another phase of a Cold War,” Jost said. “Under today's (political) environment, the threats are back.”

As tensions rise between the U.S. and Russia, China, Iran and North Korea, among others, Ultra Electronics USSI plans to celebrate production of its 7 millionth sonobuoy this week.

Several defense contractors in the region – and their thousands of workers – could potentially profit from uneasy international relations. Among the major defense employers with a presence in northeast Indiana are BAE Systems, Raytheon Co., C&A Tool Engineering Co., Harris Corp. and Ultra Electronics USSI.

But Jost and his colleague, Heather Lutton, stressed during a recent phone interview that they aren't hoping for a declaration of war to ramp up production.

They think in defensive terms.

“We're trying to prevent any harm coming to the United States,” said Lutton, the company's product manager.

Boom in business

Magnavox made the first sonobuoy about a decade after the end of World War II.

The operation passed through a series of owners beginning in the early 1990s. It was under the North American Phillips banner, then Carlyle, Hughes and Raytheon before being acquired in 1998 by Ultra Electronics Holdings PLC, a British conglomerate.

December marks the 20th anniversary of that deal, which included about 65 former Raytheon employees. The sale came at a time when sonobuoy production rates were “extremely low,” Jost said.

Since then, Ultra Electronics USSI has experienced steady growth, with demand increasing in recent months. Production of sonobuoys, which are 80 percent to 90 percent of the company's business, averages about 1 million per decade.

Since buying the sonobuoy business 20 years ago, Ultra Electronics USSI in Whitley County has cranked out more than 2.4 million.

The company, which now does $148 million in annual sales, employs 460 and is hiring engineers. The workforce designs, assembles and tests sonobuoys in addition to manufacturing them.

With the U.S. government's permission, Ultra Electronics USSI sells sonobuoys to about 30 countries that are U.S. allies. About 25 percent of production is exported each year, Jost said.

The company also stepped up four years ago when a Malaysia Airlines flight disappeared. Ultra Electronics USSI supplied at least 3,000 sonobuoys to the Australian Air Force to aid its search of the Indian Ocean.

Alan Tio, chairman of the Northeast Indiana Defense Industry Association, said Ultra Electronics USSI also “contributes greatly” to his organization's efforts to prepare the next generation of workers with the necessary skills to support the industry.

Among the organizations the manufacturer has supported include the Workforce Investment Board; the Elevate Northeast Indiana board; the Regional Opportunities Council; and the Industry Advisory Board at the Purdue Fort Wayne College of Engineering, Technology and Computer Science.

“USSI demonstrates how a global leader like Ultra Electronics can find ongoing success in northeast Indiana and speaks to opportunities for our region to continue to play an active role in equipping our nation's warfighters,” said Tio, who is also CEO of the Kosciusko Economic Development Corp.

'Like a bullet'

Sonobuoys are typically used for short-term detection and tracking of unfriendly submarines, Jost said.

They are usually deployed by aircraft, which drop them into the water. Once the sonobuoys hit the water, they release a float that carries an antennae to the surface. The devices, which are dropped in groupings or fields, are designed to last one to eight hours.

The Navy uses a different type of sensor in areas where it fixes devices to the bottom of the ocean that serve as trip wires, but the oceans are much too big to station them everywhere.

“They're meant to be expendable and short-term,” Jost said of sonobuoys. “It's like a bullet. They're relatively inexpensive.”

Emphasis on the word “relatively.” Ultra Electronics USSI makes four types of sonobuoys, which range in price from about $800 to about $5,000 each.

Lutton, the company's product manager, said the commercial side of the business is also growing. Ultra Electronics USSI also makes personal and tactical communications systems used by firefighters and other first responders.

“We're definitely on the brink of innovation of that stuff,” she added. “Who we are and what we do are not well-known.”

That includes the company's contribution to keeping the country safe from enemy submarines, which are increasingly quiet and can move and hide from detection, Jost said.

“It's one of the most difficult threats to conceptualize,” he added. “The reality is, we live in a world where it's always going to be a little dangerous.”