Watervliet's $26M investment: Will it spur partnerships with private industry?
March 3, 2014
- Watervliet manufacturing turning to private industry to reduce its cost of operation.
- Watervliet cost savings/avoidance of $12 million last year is only part of the efforts to remain competitive and relevant.
WATERVLIET ARSENAL, N.Y. (March 3, 2014) -- Just a few years ago, the Watervliet Arsenal's control over its information flow regarding manufacturing operations was just as tight as the Wizard of Oz had behind his curtain. No news releases went out and media were not invited in.
What was being manufactured was for the most part unknown, even to the local community who lived just outside the arsenal fence line. But even the Great Oz was revealed and so, it was just a matter of time before Watervliet's operations would also be known to the world.
The days of orders freely flowing in to support combat operations to two wars have been on a downward slope since 2011. In 2011, the arsenal had more than $120 million in sales that ranged from guns for Abrams tanks to 120 mm mortar tubes. For fiscal year 2013, revenue dropped to about $96 million.
The fact that orders have slowed is not news to the workforce. After all, the arsenal's history book is rich with stories of the arsenal surviving the ebbs and flows of military orders that have taken place after every military conflict since the War of 1812.
Nevertheless, what the workforce today is really concerned about is how to maintain an adequate level of workload so that the arsenal's cost rates do not spike up. When workload falls, rates go up due in large part to fixed costs that are difficult to control. If the arsenal's products become too expensive, then prospective buyers from the Defense Department and from private industry will be less likely to consider the arsenal for their manufacturing needs.
The bottom line is that lower workload has a direct correlation to a smaller workforce and that may be at the crux of today's workforce concerns. Since the beginning of fiscal 2013, the arsenal workforce numbers have fallen by about 10 percent to about 545 personnel today.
Fiscal tools, such as reducing the size of the workforce, a hiring freeze, and a very restrictive use of overtime, have helped reduced operation costs in fiscal year 2013 by more than $12 million. But those actions are only part of the equation that arsenal leadership sees as the answer to remaining relevant and competitive.
In one of the production bays in a building that was built during World War I, there is a hub of activity and we are not talking about machining. This is ground zero on a major modernization of the arsenal's manufacturing center.
"Within fiscal year 2014, we plan to bring on line more than $26 million in new machines and enhanced capabilities," said Jim Kardas, the leader of the arsenal's Manufacturing Engineering Group. "This new equipment will allow us to benefit from modern technologies, such as superior control systems and faster machining speeds, which may lead to significantly reducing machining time."
The new machines can perform multiple operations, whereas the former machines may have been able to perform only one operation.
But what may be one of the greatest advantages to bringing on line new, enhanced capability is not so much what those machines will do for arsenal products, but what they may do for private industry.
"The Army leadership has directed the Army's Industrial Base to seek out public-private partnerships to help arsenals and depots to remain relevant, effective, and efficient," said Ray Gaston, the arsenal's chief of the Production Planning and Control division. "We have a billion dollar investment in capability, as well as thousands of years of machining experience, that may be leveraged by private industry to support their operations."
There is no limit to what may be machined at the arsenal. From something as small that can fit into one's pocket to a 30-foot cylindrical tube can be produced at Watervliet, Gaston said.
"So, before a manufacturer or a startup company invests time and money into bringing on line a manufacturing capability, they should first consider the arsenal's vast manufacturing capability in machines, tooling, and in machining experience," Gaston said.
This is a win-win situation in that the arsenal will retain critical skills, as well as reduce its cost of operation by entering into a public-private partnership. Private industry may save time and money because they will not need to invest in capability in regards to equipment and personnel that is readily available at Watervliet.
The Great Oz actually turned out to be a pretty nice guy once he stepped out from behind the curtain. The Watervliet Arsenal has also stepped out from behind its veil and believes that private industry will find its workforce pretty good people to work with, too.
The Watervliet Arsenal is an Army owned-and-operated manufacturing facility and is the oldest, continuously active arsenal in the United States. It began operations during the War of 1812, and celebrated its 200th year of continuous service to the nation on July 14, 2013.
Today's Arsenal is relied upon by U.S. and foreign militaries to produce the most advanced, high-tech, high-powered weaponry for cannon, howitzer, and mortar systems. This National Historic Registered Landmark has an annual economic benefit to the local community in excess of $90 million.