Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 1

PENNSYLVANIA MILITARY INSTALLATIONS // IMPACTS

J

LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 2

This report was produced by the University of Pittsburgh Center for Social and Urban Research (UCSUR) and financed by a grant from the Military Community Enhancement Commission, Pennsylvania Department of Community and Economic Development, with additional funding support from Team PA.

June 2018 Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 3

LETTERKENNY ARMY DEPOT

This report is part of the Pennsylvania Military Community Enhancement Commission-sponsored study of the economic impacts of Pennsylvania’s military and defense installations. The aim of the project is to aid the Commis- sion and the Commonwealth of Pennsylvania in understanding the economic and strategic value of its major military installations regionally and nationally, as well as their ties to surrounding communities and Pennsylvania industry.

s Letterkenny Army Depot celebrates its 2. “Reset” of weapon systems — quicker and less 75th anniversary, its primary purpose comprehensive repairs but still returning a system or remains vital to the U.S. military: to vehicle to serviceable condition, and maintain the skills and facilities necessary A for a wartime surge. The depot is located 3. The development of new weapon systems on 18,668 acres adjacent to the Borough of Chambers - The depot currently supports the following burg and encompasses parts of Greene, Hamilton, and weapon systems: Patriot, Avenger, RG-31, and Force Letterkenny townships in Franklin County. The depot Provider. Additionally, the depot performs various employs over 3,000 people, including government engineering tasks and provides inventory and storage employees, military personnel, and private contractors. support. Letterkenny Munitions Center is a major Its main workload is three-fold: tenant of the depot, responsible for numerous tasks related to conventional ammunition and , 1. Weapon systems overhaul and/or recapitalization including maintenance, storage, and regional and — essentially rebuilding a system or vehicle so that it global distribution. J is like new

1

PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 4

MISSION: Letterkenny Army Depot develops and delivers materiel readiness for Air Defense forces of the U.S. and its international partners and builds combat power for combined and joint route clearance operations worldwide.

etterkenny was established in 1941 as part fitting and resetting combat vehicles and recapping of the War Department’s plans to create 12 Patriot Missiles. 1 new ordnance depots to deal with a surge in As a result of previous Base Realignment and war materiel. Letterkenny Township was Closure (BRAC) rounds, Letterkenny has seen changes L chosen based on its established infrastruc - — positive and negative — to its workload and mis - ture and its location, which was close to — and a safe sion. In 1995, the BRAC Commission realigned some distance from — the eastern seaboard and Washington, of Letterkenny’s workload to the D.C. The number of employees at the depot continued in Alabama, as well as to in to grow even after WWII (6,5000 people in 1950), as Pennsylvania. It also expanded Letterkenny’s storage did its vehicle storage and processing work. During the and disassembly missions. Letterkenny Industrial De - 1950s, the depot also began to work in electronics and velopment Authority (LIDA) was created in response guided maintenence, and in 1954 it became a to BRAC changes and charged with redeveloping al - permanent military installation. During the following most 1,500 acres turned over to the community as a re - decades, the depot morphed into the multi-faceted in - sult of the realignment. The authority continues to stallation it is today, performing many functions related support the depot through a variety of agreements and to supply, maintenance, and ammunition. Its missile- even leases former military space to the depot. 2 In the related mission was solidified in 1992, when the depot most recent round of BRAC (2005), Letterkenny Army was chosen to be the center of Tactical Missile Systems Depot gained from the process, which resulted in an in the Army, Navy, Air Force, and Marines. In the post- expansion of missile maintenance operations and tac - 9/11 era, the depot has been heavily involved in retro - tical vehicle work. J

2

PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 5

3

In July 2016, Letterkenny Army Depot rolled out the latest variant of the RG31, with improve - ments including engine and transmission up - grades, independent suspension, enhanced night visibility, and an armored gunner’s hatch. The depot is scheduled to produce 929 of these RG31s through 2020. Image courtesy of Letterkenny Army Depot Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 6

he IMPLAN model was used to estimate the This economic impact analysis quantifies the cu - total economic impact of Letterkenny Army mulative impact on employment, economic output, and Depot within the state of Pennsylvania. The value added production generated by operations at Let - IMPLAN model estimates the direct, indi - terkenny Army Depot. This could be interpreted as the T rect, and induced impacts that accrue within result if the installation was disestablished, and all of Pennsylvania because of activity generated by depot op - its tenant commands relocated outside of Pennsylvania. erations and major tenants co-located at the installa - Staff of Letterkenny Army Depot provided economic tion. Direct impacts are the employment and spending data for the 2015 –16 federal fiscal year; results reflect associated with all operations located at the depot it - economic impact over that period. self, while indirect impacts, sometimes called interme - The majority of employees at the depot are full- diate impacts, are generated by the supply chain time civilians who are a mix of permanent federal em - requirements and linkages of the activity being ana - ployees and contractors. The specialized nature of lyzed. Induced economic impacts derive from the work performed by the depot is reflected in the IM - spending patterns of employees and service members. PLAN inputs for this analysis; civilian workers were

>>

Source: University of Pittsburgh Center for Social and Urban Research, 2018 4 Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 7

>>

Sector reflects IMPLAN industry category; Source: University of Pittsburgh Center for Social and Urban Research, 2018

categorized as being employed in a composite mix of The economic impact of Letterkenny Army Depot industry sectors. Table 2 is a summary of economic im- within Pennsylvania reflects the broad range of opera- pacts in Franklin County and Pennsylvania as a whole, tions at the installation. The industrial capacity of the broken down by direct, indirect, and induced sources. depot incorporates repair, maintenance, and manufac- turing capacity comparable to a diverse mix of civilian • Overall, Letterkenny Army Depot generated 6,645 defense industries. This generates an economic impact jobs and over $2 billion in overall economic output in across a similarly diverse range of industries. Table 3 2016. These jobs generate over $439 million in total highlights the top 10 industries impacted by Let- labor income annually. terkenny Army Depot as estimated by the IMPLAN model. J • Letterkenny Army Depot generated an estimated $817 million in Gross Regional Product (GRP), or value added production, to the economy of Pennsylvania.

5 PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 8

he sections that follow originate from an out those functions. Letterkenny Army Depot is one of analysis of strengths, weaknesses, opportu - just four depots/ammunitions plants that are part of the nities, and threats (SWOT) at Letterkenny Army’s power-projection platform in the U.S. Its work Army Depot. Strengths and weaknesses in - to maintain equipment, facilities, and skills in times of T clude attributes, assets, or factors that are diminished combat operations provides vital national internal to the installation. Threats are external factors surge capacity for the military. that are harmful to, or create vulnerabilities for, the in - Further, Letterkenny Army Depot’s skillsets and in - stallation. Opportunities offer ways to mitigate threats frastructure — including storage, radar, test and diag - and weaknesses and/or reinforce and expand on the in - nostic equipment — make Letterkenny a “go-to” place stallation’s strengths. The SWOT analysis is summa - for developing new missile systems. The depot recently rized in Table 4, and aspects of the analysis are acquired a new mission as part of an Army pilot proj - described throughout the following sections. ect. The depot will design and build a new short-range Letterkenny Army Depot benefits from two critical air defense system and its launch platform, the Multi- competitive strengths: capabilities and location. Let - Mission Launcher (MML). The MML is designed to terkenny Army Depot’s capabilities stem from the vital engage a variety of air threats, from cruise missiles to functions that it performs for the military and the in - mortars. 4 Compared to the typical process of contract - frastructure and people in place to successfully carry ing the work to a commercial original equipment Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 9

Letterkenny Army Depot operates a mission-specific weld test and training program through which welders are qualified to American Welding Society standards. Image courtesy of Letterkenny Army Depot

manufacturer (OEM), the project is expected to save and Biological Integrated Detection Systems. During the Army time and money and will result in Army the 2005 BRAC process, Letterkenny was considered ownership of the intellectual property. number one in Military Value for Tactical Wheeled Ve - The depot continues to look for ways to upgrade hicles. The Secretary of the Army has also recognized its facilities, as many of its buildings were constructed Letterkenny for its environmental restoration and sus - in the 1940s and 1950s. For example, at the end of tainability efforts. 6 2016, the depot broke ground on a new $15 million The depot’s location in Chambersburg is ideal for component rebuild facility, which will allow it to cen - a number of reasons. First, it combines a rural setting tralize metal treatment facilities currently spread with close proximity to major population centers. The throughout the installation. The project is funded rural setting is necessary for the Munitions Center’s through the Army's military construction (MILCON) ammunition storage, but the proximity to a multi- program and should be complete in 2018. modal transportation network allows for convenient Letterkenny has been named a Center of Industrial and efficient transportation of ammunition and equip - and Technical Excellence (CITE) three times. In 2001, ment. The depot has direct access to the ports of the Secretary of the Army recognized Letterkenny as Philadelphia and Baltimore, and rail lines link Let - the CITE for Air Defense and Tactical Missile Ground terkenny to Sunny Point, North Carolina, where mis - Support Equipment, in 2005 for Mobile Electric Power siles are shipped overseas. In addition to rail, the Generation Equipment, and in 2012 for Route Clear - highway network accessible from the installation is ex - ance Vehicles and PATRIOT Missile Recertification. 5 tensive. The depot has been recognized with many awards, Second, the depot is part of a defense sector con - including ten Shingo Medallions for excellent work in centration that is critical to national defense as well as specific areas such as the PATRIOT Missile Launcher the economy of the region; the installation is situat>ed> >>

7

PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT

t o p e D y m r A y n n e k r e t t e L

f o y s e t r u o c e g a m I

. y l d n e i r f

y l l a t n e m n o r i v n e e r o m

e r a d n a s n o i t a c i f i c e p s

y r a t i l i m e h t t e e m l l i t s

t a h t ) C O V ( s d n u o p

- m o c c i n a g r o e l i t a l o v

t s e w o l e h t t a e r a d e s u

s l a i r e t a m e h T . e t s a w

d n a , t s o c , r o b a l s e c u d e r

m e t s y s g n i x i m t n i a p

d e c n a v d a s ’ y n n e k r e t t e L

. t e r r u t s ’ r e n n u g

r e g n e v A 1 - Q W T / N A

n a r e v o g n i t a o c

t n a t s i s e r t n e g a l a c i m e h c

s y a r p s r e t n i a p t o p e d a

, n u g t n i a p e r u s s e r p w o l

, e m u l o v h g i h a g n i s U

s e e y o l p m e t n e n a m r e p f o r e b m u n e h t , n o i t a r t s e u q e s

J . t u o g n i y r r a c t e g d u b l a r e d e f o t e u d , y l l a n o i t i d d A . s s e n i s u b g n i o d

y l t n e r r u c e r a s e e y o l p m e l a r e d e f t a h t k r o w n o d i b o t f o t s o c e h t s e s a e r c n i o s l a t i t a h t n i d r o w s d e g d e

s r o t c a r t n o c e t a v i r p w o l l a d l u o w s n o i t i t e p m o c 6 7 - A - e l b u o d a e b y a m t u b , s t r o f f e t n e m t i u r c e r r o f l a i c i f e

- n e b s i s i h t , a n n a h e u q s u S y c n e g A s c i t s i g o L e s n e f e D . e t u c a e r o m t i e d a m e v a h s n o i t i t e p m o c 6 7 - A n o

7

y b r a e n h t i w s A . e l a c s e l u d e h c S l a r e n e G C D e h t s e s u n a b g n i t s i x e e h t r e v o l e v e l l a r e d e f e h t t a s e t a b e d t n e c

t o p e d e h t t a h t s n a e m h c i h w , g r u b s r e b m a h C o t s e i l p - e r , n r e c n o c g n i o g n o n a s i s i h t h g u o h t l A . d a o l k r o w

- p a w o n e t a r y a p y t i l a c o l C D , n o t g n i h s a W e h T s t i f o s t r a p f o n o i t a z i t a v i r p f o t a h t s i , a i n a v l y s n n e P

. w o l e b r e h t r u f n i s r e t n e c s c i t s i g o l d n a s t o p e d r e h t o h t i w s e r a h s

d e l i a t e d s i h c i h w , n o i g e r e h t n i s r e t n e c g n i n i a r t d n a y n n e k r e t t e L t a h t e n o , t a e r h t l a n o i t i d d a n A

s l o o h c s h g u o r h t e n i l e p i p e c r o f k r o w g n o r t s a s e o d . s c i n o r t c e l e s a h c u s , s a e r a e m o s n i s t e s l l i k s

s a , a e r a g n i d n u o r r u s e h t n i t s i x e — s c i t s i g o l o t y g o p o l e v e d o t s r a e y e k a t n a c t i s a , y t i u n i t n o c g n i

- l o n h c e t n o i t a m r o f n i o t s c i n o r t c e l e d n a s c i n o i v a e k i l - n i a t n i a m d n a s t e s l l i k s p u g n i p e e k f o s m r e t n i s e g n e l

s e i t l a i c e p s n o i t a c i r b a f d n a r i a p e r m o r f — t o p e d e h t - l a h c s t n e s e r p ) s e e y o l p m e y r a r o p m e t r o ( g n i t c a r t n o c

t a d n a m e d n i s t e s l l i k s e h T . e c r o f k r o w y n n e k r e t t e L n o g n i y l e R . s n o i t i s o p e v i t a r t s i n i m d a n o g n i r b o t

e h t d i a o s l a s e g a t n a v d a n o i t a c o l e s e h t , d r i h T e l b a n e e b t o n e v a h y e h t d n a , t l u s e r a s a g n i t c a r t n o c

. d n a l y r a M n i k c i r t e D t r o F d n a , a n n a h e l a c s e g r a l o t t r o s e r o t d a h s a h t o p e d e h T . p i h s r e d a e l

- e u q s u S y c n e g A s c i t s i g o L e s n e f e D , g r u b s c i n a h c t o p e d o t g n i d r o c c a ” , e m i t n i n e z o r f “ s i d e d n u f d n a

- e M n i y t i v i t c A t r o p p u S l a v a N , e g e l l o C r a W y m r A d e v o r p p a s e c n a w o l l A d n a n o i t u b i r t s i D f o s e l b a T t e g

e h t , p a G n w o t n a i d n I . t F f o s u i d a r e l i m 5 7 a n i h t i w o t y t i l i b a s t i d n a , d e p p a c s i n o g n i r b n a c t o p e d e h t

>> Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 10 Page AM 11:04 7/18/18 Letterkenny_FINAL.qxp_REPORT_1 Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 11

Letterkenny is establish - ing an on-depot, four- year recapitalization program for the Patriot equipment belonging to the Netherlands — one of the United States’ first foreign military sales Patriot partners. The pro - gram is one of the Army Materiel Command’s strategic missions in sup - port of global readiness. Image courtesy of Letterkenny Army Depot

etterkenny Army Depot’s ties to local and Turning to partnerships with the private sector is regional schools and its partnerships with an especially attractive option in an environment in the Franklin County Area Development which federal MILCON funds are not guaranteed or Corporation (FCADC) and LIDA serve to take years to come through. Depot leadership, aided L strengthen its workforce and facilities. by the Pennsylvania Military Community Enhance - FCADC was established in the late 1980s, and its ment Commission, is currently working with LIDA on affiliate “Team Letterkenny” actively serves as the an innovative public/private partnership that could be depot’s Local Defense Group. a model for the state and across the Department of De - The depot has several educational partnerships to fense (DoD). Using the Pennsylvania Keystone Oppor - assist in tailored recruitment and training efforts. Al - tunity Zone program, LIDA plans to attract a private though Chambersburg has no local community college, developer to construct a new 700,000 square foot fa - the depot partners with Franklin County Career and cility on post, which the Army will lease. The Keystone Technology Center (a vocational high school) and sev - Opportunity Zone program encourages the develop - eral post-secondary and technical schools in surround - ment of specific underdeveloped and underutilized ing communities, such as York College, Penn State areas by eliminating certain state and local taxes. The University, Harrisburg Area Community College, and partners expect the plan to result in cost savings for the Hagerstown Community College. Further, FCADC re - Army along with a large, modern space with high ceil - cently constructed a welding training center that, ings and rail access. The project would consolidate among other things, will help with training employees work currently taking place in separate buildings and of Bowhead, a depot contractor. improve the depot’s efficiency. J

9

PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 12

An air conditioning equipment mechanic tightens the bleeder cap on a Revision III Patriot cooling liquid electron tube (CLET). Image courtesy of Letterkenny Army Depot

ven as Letterkenny Army Depot stays fo - DoD market for FMS will grow, 9 indicating that expansion in cused on maintaining and building combat this market may be a promising opportunity for Letterkenny. power for the U.S. and its international The depot could also continue to build on organic industrial partners, its leadership is “making changes base work, as it has done with the multi-mission launcher E now that will ensure its relevance to the pilot project. Army for decades to come and will ensure the U.S. re - mains the pre-eminent land force in the world.” 8 As it • Installation leadership might consider re-vamping industry looks to the future, the depot will benefit from contin - day in order to support contracting with local businesses and uing to strengthen external partnerships and visibility, enhance community integration. In 2015, FCADC stated that and from pursuing expanded business and logistics part of its 2016 plan of action would be to “Avail applicable cluster opportunities. economic development resources to defense contractors seeking to do business with [Letterkenny Army Depot].” 10 • The depot’s partnerships with FCADC, LIDA, and local and Given this priority, FCADC would be an interested and impor - state government are crucial to Letterkenny’s success. In par - tant partner. ticular, they are critical partners as Letterkenny addresses its aging buildings. Letterkenny leadership should also continue • Building on groundwork laid in 2009, 11 Letterkenny is well- to engage with external partners in publicizing its work and positioned to tap into a Pennsylvania Logistics Center of Ex - achievements. From hosting high-level military personnel to cellence, which would build a common orientation around the preparing remarks for federal representatives to providing state’s concentrated strength in transportation, distribution, professional and well-organized facility tours, the importance and logistics. Such a center would support new education, of Letterkenny’s outreach and public awareness efforts should training, and business development opportunities and could not be understated. provide Letterkenny with enhanced opportunities to leverage its strategic reserve capacity supporting a global military • Ten to twenty percent of the depot’s annual revenue comes force. Additionally, it could create opportunities to aid Let - from partnerships with OEMs to produce weapon systems, terkenny in making connections between its internal manu - which partners like Raytheon, Lockheed Martin, and AAI then facturing and technological innovations and external supply sell to foreign militaries. An increase in foreign military sales chain, education, and local economic development resources. (FMS) at Letterkenny comes amidst expectations that the J

10

PA MILITARY INSTALLATIONS & IMPACTS LETTERKENNY ARMY DEPOT Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 13

Notes

1 All details in this paragraph come from: “History of Letterkenny,” Letterkenny Army Depot, accessed January 5, 2018, letterkenny.army.mil/history.html 2 Dan Cohen, “County Economic Development Director Underscores Challenges in Finding New Uses for Closed Bases,” Association of Defense Communities , March 14, 2017 3 Defense Base Closure and Realignment Commission, 2005 Defense Base Closure and Realignment Commission Report , vol. 2, 2005; 1995 Report to the President , 1995; Pennsylvania Military Community Enhancement Commission, 2015 Annual Report ; Pennsylvania Base Development Committee, Pennsylvania Military Installations Reference Manual , March 2009 4 John Andrew Hamilton, “New Air Defense System Under Development Tested at WSMR,” May 26, 2015, army.mil/article/149241/New_air_defense_system_under_development_tested_at_WSMR 5 “History of Letterkenny,” Letterkenny Army Depot, accessed January 5, 2018, letterkenny.army.mil/history.html 6 “History of Letterkenny” 7 Mark Rockwell, “Will Trump and Mulvaney Bring Back A-76?” FCW, December 22, 2016 8 Deacon Maddox, “Letterkenny Army Depot,” May 2017, (Unpublished letter to Congressional Representative) 9 “U.S. DoD Foreign Military Sales Market, Forecast to 2021,” Frost & Sullivan, February 15, 2017, frost.com/sublib/display-report.do?id=K166-01-00-00-00 10 Franklin County Area Development Corporation, “2016... Embracing the Future. 2016 Annual Report,” December 2016 11 Pennsylvania Base Development Committee, “PA 2020, A Strategy for the future of the Military in the Commonwealth of Pennsylvania,” 2009 Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 14

[ THIS PAGE INTENTIONALLY BLANK ] Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 15

This report is part of a larger study of the economic and community impacts of Pennsylvania’s military and defense installations. Visit the Pennsylvania Military Community Enhancement Commission’s website at www.dced.pa.gov/pmcec to see other installation-specific reports and a statewide report.

University of Pittsburgh Center for Social & Urban Research 3343 Forbes Ave., Pittsburgh, PA 15260 | 412-624-5442 | www.ucsur.pitt.edu Letterkenny_FINAL.qxp_REPORT_1 7/18/18 11:04 AM Page 16

    

LETTERKENN Y ARMY DEPOT

PENNSYLVANIA MILIT ARY INSTALLATIONS // IMPACTS