APG achieves gains despite weak economy

Harford County's biggest employer has gotten bigger.

By almost every measure - total employment, civilian payroll, number of outside contractors and total economic impact - Aberdeen Proving Ground posted significant gains during the fiscal year that ended in September, according to financial data released recently by the Army installation.


While companies are cutting back during what economists are calling one of the worst job markets in 20 years, APG, as the Army base is commonly called, has increased its work force, civilian and military.

It has been credited with keeping Maryland's unemployment rate one of the lowest in the nation.


APG's achievements include:

A 13 percent jump in total employment, to 14,700, counting military and civilian personnel.

A 13.2 percent increase in contract workers, many of them off base.

A 21.6 percent rise in the dollar value of contracts with outside companies supporting APG's operations.

The 72,000-acre military compound provided employment for about 4.3 percent of Harford County's civilian labor force, making it the largest single employer in the county.

It has been estimated that APG accounts for 1 percent of the state gross product, a measure of the value of all services and goods produced.

It is the home of the Army Ordnance and is a world leader in the research, development, testing and evaluation of materials.

APG pumped more than $1.8 billion into Maryland's economy last year, according Michael Hayes, a retired Marine Corps general who is director of military affairs for the Maryland Department of Business and Economic Development.


This was nearly twice the amount that the General Motors Corp. van plant in Baltimore contributed to the region's economy during its heyday in the late 1970s, when it had nearly 7,000 workers.

More than half of the money generated by APG ended up in Harford and Cecil counties, said J. Thomas Sadowski, Harford's economic development director.

"In Harford and Cecil counties, APG pays out over $830 million in employee compensation," said Sadowski. "That's 27 percent of total wages and salaries paid in the two counties.

"It's a critical part or our economy. It is a billion-dollar research and development organization that is a driving force of our economy."

County Executive James M. Harkins called APG "an anchor of the county's economy." He said it adds to the quality of life and is part of the fabric of Harford County.

"My Mom and Dad met at a USO dance at APG," Harkins said, noting that almost every family in the county has some relationship with the base or has an acquaintance who works there.


Anirban Basu, chairman and chief executive of Optimal Solutions Group, a Baltimore-based economic research company, called APG one of the nation's "hotbeds of research and development" and said it is expected to play a larger and more important role in the region's economy.

He said APG's future was not so clear in the 1990s, when military bases were being phased out around the country.

"But 9/11 changed all of that forever, or at least during our lifetime," Basu said.

Basu said that "no matter how the economy changes, regions of the country that do more [research and development] work will lead the nation in terms of quality and quantity of job creation."

He said APG also helps define the county's image to businesses seeking to open operations and to site-selection consultants that assist companies in situating new facilities.

"APG is the basis for Harford County's technology strategy going forward," he said, and will make the region a leader in Maryland in attracting technology companies.


Layoffs offset

APG's growth has helped offset layoffs by Internet, fiber-optics and air transportation companies in recent years, Basu said.

"Without Aberdeen Proving Ground," he said, "Harford County would be a bedroom community for people working [in] the Baltimore or Washington areas and coming home to Harford County to live."

Hayes said the average salary for civilian workers is almost $70,000 a year. If those jobs are eliminated, he said, the average salary for people living in and working in the county would be $27,000 a year.

Sadowski called APG one of the world's top 20 sites for high-performance computing.

"It's a billion dollar research and development center," he said, giving it credit for bringing to the region many technology companies that pay high salaries.


Bill Richardson, president of Army Alliance Inc., a business-advocacy group that tabulates the dollar impact of Aberdeen on the local economy and seeks to secure the base's future by lobbying for federal funds in support of its military projects, agrees.

He said APG is the reason Battelle opened its Eastern Science and Technology Center in Aberdeen in March.

The $22 million laboratory is expected to employ 300 scientists and researchers who work primarily on biological and chemical defense, and also conduct engineering and technology research.

Richardson said San Diego-based Science Applications International Corp. opened a plant nearby, with about 300 workers, to support chemical weapons destruction.

One cloud hanging over APG's future, Richardson said, is another round of Pentagon-ordered base closings and realignment of military operations scheduled for 2005.

The moves are designed to eliminate overcapacity, and states are concerned as they begin their lobbying efforts to safeguard military installations that contribute greatly to their economies.


"I don't have any concern about the base closing," Richardson said. "You can never say never, but it's pretty close to that."

Some concerns

He is concerned, however, that as part of the realignment, some of the work at APG could be shifted to military installations in other parts of the country.

It's a concern shared by county officials and thousands of county residents who work at the base or for companies supporting the Army's operations there.