Makers of Body Armor Boost Production
Washington Post
The Army’s rush to overcome shortages of body armor and armored Humvees in Iraq is sparking a mini-boom for manufacturers of the equipment.
Body-armor manufacturers are increasing output to 25,000 vests a month from 3,300. An Ohio-based subsidiary of Armor Holdings Inc. — the military’s only maker of armored Humvees — is ramping up to 24-hour production in an effort to turn out 220 vehicles a month within six months. It currently produces 80 a month.
The Army initially provided body armor only to infantry and combat troops. Now it wants to outfit everyone on the ground in Iraq.
In the past few months, Ceradyne Inc. of Costa Mesa, Calif., has spent $2 million to increase production of the ceramic plates used in vests to 14,000 a month from 9,000. Each vest contains at least two plates. The company has hired 120 workers and bought 16 new furnaces to fire the plates, said David P. Reed, vice president and general manager. The price of Ceradyne’s common stock has soared 145 percent since June 2.
“We’re investing for the long run,” Reed said. “Body armor is here to stay for the military.”
The Army has shifted hundreds of armored Humvees into Iraq and Afghanistan from other areas and has about 1,500 in those two countries. It aims to have 3,500 of the $150,000 armored vehicles there, though the time frame is uncertain, according to Army spokesmen.
“The evidence to date suggests that U.S. forces are not properly trained or equipped for guerrilla warfare on a long-term basis,” said Loren B. Thompson, a defense industry analyst with the Lexington Institute. “That’s illustrated not only by an absence of body armor and hardened vehicles but a shortage of people who can speak the local language.”
Armor Holdings, which also provides armor for nonmilitary vehicles, has moved its commercial operations out of its main plant so all 140,000 square feet can be dedicated to armored Humvees. The company is bringing on 150 workers, a hiring drive that will expand its staff by nearly 50 percent. Armor hasn’t operated at this pace since the military significantly accelerated orders during the war in the Balkans, said Robert F. Mecredy, president of the company’s aerospace and defense group.
The company will probably produce 850 armored Humvees this year, an increase of 227 from last year, said Peter J. Barry, an analyst with investment bank Bear, Stearns & Co. Production is expected to grow to 2,265 in 2004. “It doesn’t hurt that the pricing competition is negligible,” Barry said.
Armor’s common stock price is up about 82 percent since the beginning of June.
The military is also moving to add armor to traditional Humvees by tacking on lightweight interior insulation panels. The number of inquiries about the technology “has increased quite substantially” in recent months, said Brad Squires, chief technology officer of US Global Nanospace Inc., a Nevada company that developed the panels.
Copyright 2003 The Washington Post Company
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