The timing couldn't have been better.
Pacamor Kubar Bearings Inc., which makes precision ball bearings for cruise missiles, emerged from bankruptcy two days before the U.S.-led air strike against Iraq.Already, the upstate New York company has received inquiries from the U.S. Department of Defense about its manufacturing and delivery capabilities and plans to recall 40 laid-off employees.
"If this conflict drags on, our business will see some action," said Augustine Sperrazza, Pacamor Kubar's chief executive officer.
Many defense contractors, large and small, are optimistic that the Persian Gulf crisis could yield war dividends. Producers of bombs, missiles and other ammunition could see higher profits should orders increase to replace what's being used in the war.
But the bigger payoff could come from a congressional nod for research and development of more high-tech military systems, now that the Patriot and Tomahawk missiles and Stealth fighter have proven successful, analysts and defense contractors say.
Whether defense spending remains flat or shrinks, more money is likely to flow to the high-tech sector, said Phillip Giaramita, a spokesman for Martin Marietta Corp.
"There will be an emphasis on high technology," Giaramita said. "The Persian Gulf crisis has shown that these high-tech products can work in combat."
Companies across the country began gearing up for wartime production as soon as fighting in the gulf started.
Many defense contractors say they haven't been asked to drastically increase production levels yet, although they have been told to accelerate delivery on existing orders.
"They want the same amount they contracted for, they just want them faster," said Bob Skelly, a spokesman for Raytheon Co., maker of the Patriot missile.
Taylor Devices Inc., which produces components for Tomahawk missiles, has placed its plant under an "emergency situation" for Operation Desert Storm, said Douglas Taylor, an executive vice president.
Taylor said the defense department contacted the firm the day fighting started asking that they operate under a wartime production system that gives top priority to defense-related products.
The Defense Department has refused to comment on the status of the country's inventory of military equipment, citing security concerns.
Defense companies said the intense defense buildup during the 1980s means the nation has huge stockpiles of weapons now being used in the Persian Gulf. Some said this may be the first war in history that is fought from inventory.
"The United States is using a lot of systems in the inventory," Giaramita said. "The short-term impact of the Persian Gulf crisis on the defense industry will depend on whether the government decides to replenish or not."
Analysts said the Pentagon will have to replace some of the equipment being used in the war, especially bombs, missiles and their components. That could be a short-term boon for companies such as upstate New York's Pacamor Kubar.
The pressure to trim the federal budget probably will limit the longer term impact on defense spending. Many analysts say that despite the initial success of the weaponry deployed in the gulf, the budget will remain tight.