Audio Alliant Techsystems growing with high-tech weapons (story audio) Photos Making ammunition Shells coming off the assembly line The new XM-29 rifle View full slideshow (6 images) Resources ATK Alliant Action Your Voice Join the conversation with other MPR listeners in the News Forum.

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Alliant Techsystems growing with high-tech weapons
by Marisa Helms, Minnesota Public Radio
September 1, 2003

A shot shell draw press, where 10-gauge shot shell bases are manufactured. The bases will be packed, loaded and delivered to waterfowl hunters across the nation. (MPR Photo/Marisa Helms)

Many Minnesota businesses would just as soon put the last two years behind them. But as one of the state's few defense-industry companies, Edina-based Alliant Techsystems stands out as an exception in an otherwise stagnant post-9/11 economy. Alliant Techsystems, which now prefers to be known by its stock ticker initials, ATK, is a $2 billion public company that's been attracting a growing number of military contracts and shareholders.

Edina, Minn. — ATK was created in 1990 when Honeywell spun off its defense division, but the company didn't really take off until a couple years ago. Since then it has doubled in size, buying up several smaller munitions and aerospace companies.

The war on terrorism has helped fuel ATK's growth. The company's first quarter earnings are up 32 percent from a year ago.

Company spokesman Bryce Hallowell says the wars in Afghanistan and Iraq are factors in the profit jump. But, he says they may not pad the bottom line as much as many people think.

"It was a shoot 'em up war for a couple months. There is a lot of ammunition that was used up in that, but it's not a significant event," says Hallowell. "The U.S. Army is going to continue to train regardless, and continue to use ammunition regardless if they're in Iraq, Afghanistan, or if they're sitting at Fort Dix."

	The new XM-29 rifle

ATK has about a dozen facilities around the country and employs 12,000 people, 2,200 of them in Minnesota.

Nearly half of ATK's Minnesota employees work at the sprawling Federal Cartridge factory in Anoka.

Tens of thousands of bullets fall off the assembly line every hour.

Hallowell says ATK bought the bullet manufacturer two years ago because it fits into the company's military and commercial product lines. "In this plant, that was primarily for the sport commercial hunter, we're now producing a frangible ammunition that we're bringing back to the military," Hallowell says. "We've got capabilities here that are now for the first time ever -- about a $20-plus million contract -- that's operated out of here that is providing ammunition to the Department of Defense."

ATK's other Minnesota operations include the Twin Cities Army Ammunition plant in Arden Hills, an ordnance testing grounds in Elk River, and a research facility in Plymouth. Outside Minnesota, it has facilities in Maryland, Ohio, Missouri, and the Virginias.

The company employs about 300 people at its corporate headquarters in Edina.

	Space shuttle

Hallowell says the Plymouth research facility is where much of the company's investments are headed -- into what's called precision guidance weapons and high-tech munitions.

"We really believe that the military is moving toward a precision guidance future, and ATK wants to play in that arena for a long time."

ATK's precision guidance projects in Plymouth include a development deal with the Pentagon to replace the M-16 military assault rifle with the XM-29. That model is a lightweight rifle that allows soldiers to shoot around corners without exposing themselves to enemy fire.

The company just received a contract for the "Shredder," a penetrating bomb designed to destroy biological and chemical weapons without releasing the toxic agents into the atmosphere.

ATK has just announced it will be a subcontractor on a $92 million missile project. The Standard Missile 3 is a sea- and land-based missile defense system.

	Alliant Action protesters

Hallowell says the company will engineer and manufacture the system's propulsion and flight control mechanisms.

"This would take out an incoming ballistic missile. And President Bush has said he wants that system up and running by 2004," says Hallowell.

Through its acquisitions, ATK has also branched out into the aerospace industry. It has become a major player in solid rocket fuel boosters. The 70-foot-high, six-foot diameter booster rockets propel space shuttles into orbit.

ATK is also playing a role in the Mars expedition scheduled to land on the planet in January. It provided the boosters that sent the mission into space, and is providing much of the technology for the MER (Mars Exploration Rover) that will roam the planet's surface.

Most of ATK's aerospace operations are based in Utah and California.

Alliant represents a violent solution to any problem ... I personally think humans could probably think of better ways to solve problems than shoot each other. - Tom Bottolone, Alliant Action

Hallowell says while ATK has a growing national and international reputation, the company is committed to keeping its headquarters in Minnesota. He says ATK is invested in the state's economic and social vitality.

"The new ATK is a company that has a significant aerospace component, that has a significant precision guidance component, that has the ammunition component, and is growing leaps and bounds," Hallowell says. "I think Minnesotans are going to start to take notice of this company and begin taking some real homegrown pride in it. At least, that's what we would hope."

Hope as he might, there are some Minnesotans who will be proud of ATK only when it stops producing weapons.

Each Wednesday morning for the past eight years, a group of peace activists called Alliant Action assembles on a traffic triangle just outside ATK's offices in Edina.

Activist Tom Bottolone says Alliant Action is opposed to the company's use of radioactive materials like depleted uranium in some of its munitions. He says he and others also object to the development of the XM-29 rifle. They say it's too dangerous and could fall into the wrong hands.

Bottolone says his group wants to see ATK take what he calls a moral stand, and stop making weapons.

"Alliant represents a violent solution to any problem -- a violent solution," Bottolone says. "Whether it's our soldier being killed, or the enemy soldier being killed, they represent a violent solution. I personally think humans could probably think of better ways to solve problems than shoot each other."

	Keeping an eye on the group

Company spokesman Hallowell dismisses the activists as representing a "minute subsection" of the American public who believe the U.S. should never go to war.

"Nobody wants to go to war. But if we're going to go to war, we're going to make sure that our sons and daughters have the very best weapons possible," says Hallowell. "(They) are going to be out there on the battlefield winning a war with technology, staying out of harm's way as much as possible and returning home safely."

While ATK has its tenacious detractors like Alliant Action, the company is looking good to analysts and lawmakers. ATK is a growing company providing high paying jobs and tax revenue to the state.

ATK's profits and degree of success can only improve, according to equity analyst Peter Arment, who watches the defense industry for JSA Research in Rhode Island.

Arment says defense should continue to be a "growth industry" at least toward the end of the decade.

"We're only a few years into that upturn in terms of defense spending, so we think the future for a company like ATK is quite favorable," says Arment. "That's why we've been recommending to our clients that they should own the ATK stock."

The U.S. government's 2004 defense budget is expected to be approved at just under $400 billion, with the majority going to the Department of Defense.

Minnesota's U.S. Sens. Republican Norm Coleman and DFLer Mark Dayton pledge to do their best to bring military dollars home to ATK, and other companies doing defense work in Minnesota.

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