Swales a force in satellites

February 18, 2005|By Bill Atkinson

BELTSVILLE - There aren't any gleaming office towers in the Paulen Industrial Park off Powder Mill Road in Beltsville. Just a neighboring salvage yard, a paving company, a sheet metal business and, of course, a strip club.

Amid these gritty digs, Swales Aerospace makes satellites.

"We don't need a fancy front," said Thomas L. Wilson, Swales' chief executive officer. "The idea is how do you want to spend money? We don't want to spend money on fancy buildings."

What Swales spends its money on are new computers, hiring more people and paying good wages, which is why it is flourishing amid an increase of spending on defense and national security.

Swales might not have the name recognition of a Lockheed Martin, Northrop Grumman or Boeing, but its fingers are in many high-profile projects: the Mars Exploration Rover, the Hubble Space Telescope, the International Space Station. It makes small satellites ranging in size from about that of a refrigerator to a microwave oven. It designs tools for astronauts, such as power drills, pliers and ratchets, and cooling systems that keep electronics in satellites from overheating.

It employs more than 900 people and plans to add 100 workers this year: engineers, technicians, accountants and others.

About 650 employees work in Beltsville and the rest are in facilities in Virginia, Texas and California.

Revenue has grown at about a 15 percent clip over the past five years, nearly doubling to $193 million last year. It should easily break $200 million this year, Wilson said.

"In my world, everybody knows who they are," said Lon Rains, editor of Space News International, a weekly newspaper covering the global aerospace industry. "It is a very solid company. I think people think highly of their work."

But if you are an investor looking for Swales' ticker, don't bother. It is 85 percent owned by its employee stock ownership plan. Next year, the ESOP could own 100 percent of the company. Wilson doesn't even like to utter the phrase "go public."

"Going public would change our culture so drastically," he said.

Swales is comfortable focusing on its work without having to worry about Wall Street demands. And there are no shortage of projects. With the Mars Exploration Rover missions, Swales helped design and test the high-tech, industrial-strength dune buggies that have been studying Mars' surface for more than a year.

Its gyroscopes, batteries and electrical systems are inside the Hubble. Other systems cool the Hubble and do the same for the International Space Station and commercial satellites.

Swales is building five satellites for the University of California, Berkeley THEMIS mission. The satellites will gauge the sun's impact on weather in space and on the Earth's magnetic field. The contract is worth more than $30 million, Wilson said.

Clients include the National Aeronautics and Space Administration, the Defense Advanced Research Projects Agency, Space and Missile Systems Center and the Naval Research Laboratory, as well as Boeing, Lockheed and other large operators, the company says.

Lyle Knight, the contracting offices technical representative at the Goddard Space Flight Center in Greenbelt, said Swales is usually involved in "most any project that Goddard does."

"They play a large role in all that we do here mechanically," he said.

Jon Connor, subcontracts manager at Boeing Satellite Systems in El Segundo, Calif., said the company has used Swales for about 10 years.

"We keep going back to them," Connor said. "I like them very much."

Swales has been growing so rapidly that it is swallowing Paulen. It occupies 18 buildings with 250,000 square feet, the size of five football fields.

Inside one of the boxy, two-story warehouses the work is not sexy. An expert craftsman shows off his precision welding on an aluminum pipe that he bent into a curved heat pipe.

Workers stand at a table mulling a shiny cooling system for a satellite as country music plays in the background. In another room, three workers in white lab coats, hairnets and blue gloves gently examine a structural panel for a commercial satellite.

Swales was started in Greenbelt in 1978 by Tom Swales, an aerospace engineer, and his wife, Barbara.

Tom Swales, who is chairman of the board and semiretired, was the idea man. Employees worried every time he took off because he came back to work charged up with things he wanted to try.

"We hated it when he went on vacation because it gave him more time to think," said Ronald A. Luzier, chief technology officer.

Swales pushed the company into the spacecraft design business. He thought it could improve its clients' designs. Design work led to another idea: fabricating systems to heat and cool electronics in the satellites.

Those ideas have spawned a thriving company that expects to have revenue in the $300 million range in five years.

"I think it has worked out even better than we thought it would," Tom Swales said.

Even as it grows it intends to call Paulen Industrial Park its home. Last year, Swales signed a 15-year master lease. It has an option on another 100,000 square feet of space.

"We looked at other places last year," Wilson said. "We came to the conclusion that this is the best for us to grow. It's good."

Bill Atkinson's column runs Tuesdays and Fridays. Contact him at 410-332-6961 or by e-mail at bill.atkinson@balt sun.com.

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