In the decade after the Twin Towers fell on Sept. 11, 2001 and the U.S. invaded Afghanistan, military spending skyrocketed, at one point eating up 20% of government spending.
Although it has since fallen, its legacy can still be felt in Southern California where the military drone was born.
Some of the nation's largest military contractors – Northrop Grumman, Boeing, Lockheed, Raytheon and Aerojet Rocketdyne – all have a large presence in Los Angeles County.
In fiscal year 2020, the United States spent $714 billion on national defense, according to the U.S. Government Accountability Office, a figure that registered as over 10% of total federal spending, according to an analysis by the Peter G. Peterson Foundation.
Many of those dollars poured into Southern California where the defense and aerospace industry have a strong hold. The companies have secured hundreds of millions in military contracts to provide missiles, drones and other technologies to help the U.S. military fight terrorism.
L.A. County has more than 50,000 employed in the aerospace and defense industry, according to the Los Angeles County Economic Development Corporation.
Here are six ways companies in Southern California have benefited from the surge in defense spending:
1. Lockheed Martin acquired El Segundo-based Aerojet Rocketdyne
Aerospace giant Lockheed Martin, which was headquartered in Burbank for decades before moving to Maryland, reached an acquisition deal worth $4.4 billion in December for El Segundo-based Aerojet Rocketdyne. The Federal Trade Commission and the Department of Justice have yet to sign off on the deal.
Aerojet Rocketdyne, known for developing and manufacturing rocket motors for missiles like the Tomahawk, Javelin, Patriot and Stinger, generated $2.1 billion in sales in 2020.
2. Lockheed's Palmdale built NASA's supersonic X-plane
In 2018, Lockheed secured a $247.5 million contract to build NASA a supersonic X-plane, which is being built at Lockheed's Palmdale facility Skunk Works. In 2020, the Palmdale outpost was awarded a $50 million contract from the U.S. Air Force to upgrade the Dragon Lady, a single-jet engine, high altitude reconnaissance aircraft.
3. Part of Northrop Grumman remains in L.A. County
Northrop Grumman's worldwide headquarters were in Los Angeles until it moved in 2010 to Virginia to be closer to its military customers, but its Aeronautics Systems division is headquartered in Palmdale.
One of the world's largest weapons manufacturers and military technology providers, it brought in $36.8 billion in revenue in 2020 up from $30.1 billion two years before.
From 2000 to 2001, sales increased 78% to $13.6 billion in 2001 when it acquired three companies.
4. Raytheon expands its El Segundo campus
Aerospace giant Raytheon Technologies was formed in 2020 after a merger of United Technologies and Raytheon Co. In July, it secured a $320 million contract for Stinger missile production for the U.S. Army. In 2021, it expects between $63.4 billion to $65.4 billion in sales.
Raytheon's 16-building El Segundo campus, which employs about 6,000 people, develops products that include radar systems, sensors and electronic warfare technologies. Last summer it planned to hire more than 300 workers.
5. Military drones were born in Southern California post-9/11
Simi Valley-based AeroVironment was the beneficiary of contracts to supply the devices to the military and grew into a publicly traded defense contractor and is now one of the world's largest drone manufacturers.
In 2021, AeroVironment expects to generate between $390 million and $410 million in revenue.
The Defense Department will spend about $7.5 billion in 2021 for a variety of robotic platforms and related technologies, including drones.
6. Defense stocks have also surged since 2001
The Intercept found that if you purchased $10,000 of stock before the U.S. invaded Afghanistan divided among top defense contractors, Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics, it would be worth $97,295, outperforming the stock market overall by 58%.
Northrop Grumman's stock alone jumped 1,196.14%.
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RepairSmith, an El Segundo-based at-home car repair service, has been steadily rising in popularity since its launch in 2019, with over 100,000 completed appointments.
And on Thursday, the company announced a $42 million Series B raise that will rev up and expand with the goal of operating in every major metropolitan area in the U.S. by next year.
The company now operates in 650 cities across six states including California.
"Finally, we believe there is a team that is bringing mobile service and repair into the digital age, using a robust technology platform backed by world-renowned automotive partners," Ziad Ghandour, founder of TI Capital, said in a statement announcing the raise. "RepairSmith is ideally positioned to transform the marketplace."
TI Capital invested along with Mercedes-Benz, Porsche Ventures and Spring Mountain Capital.
In cities where RepairSmith operates, customers can book an appointment for a technician to come to their home on RepairSmith's website.
RepairSmith also offers business-to-business services, with rental car agencies and car dealerships being among the types of businesses they serve. Still, the majority of RepairSmith's services are aimed at individual car owners.
One major selling point of the company is that each RepairSmith technician is an employee of the company rather than a contractor. This decision was made to ensure the quality of each technician, keep up with the competition and avoid legal issues regarding the distinction between an employee and a contractor.
In a statement, co-founder and CEO Joel Milne said, "The independent automotive repair market has not changed in 50 years, and is ripe for massive disruption."
Ghandour and John L. Steffens of Spring Mountain Capital will also join RepairSmith's board of directors.
One of the nation's largest charging network operators is rolling out a rewards program for customers and a new pricing plan that will make it more expensive for Californians in certain areas who plug in their cars during peak hours.
El Segundo-based EVgo announced the new congestion pricing plan this week after the state banned minute-by-minute pricing. The company said the new rates will reflect the costs of local utilities and network congestion, which can be higher in certain areas. Los Angeles and San Francisco users will also face additional pricing changes based on where they are charging.
EVgo's fast chargers in California will switch to the new pricing plan next month. It will be based on the time of day, which the company breaks down into early morning (12 a.m. - 8 a.m.), on-peak (4 p.m. - 9 p.m.) and off-peak, and how many kilowatts are used. Previously, the company used a per-minute rate.
The comspany said California will be a testing ground for other markets. It will also consider the impacts to communities hardest hit by pollution, traffic congestion among other factors.
EVgo also announced plans to add another tier to its subscription plan making it cheaper for regular customers. The rewards program will let drivers earn points that can go toward free charging sessions each time they charge.
EVgo went public in July after receiving a $2.6 billion valuation. The company has around 160 charging stations in Los Angeles and over 800 charging stations across the U.S.
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