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New $1.5M state program to help defense companies diversify

Telephonics Corp. in Farmingdale saw sales in 2016's

Telephonics Corp. in Farmingdale saw sales in 2016's last quarter drop 19 percent from the year-earlier period. Its one of Long Island's companies hurt by Pentagon cutbacks. Photo Credit: Kevin P. Coughlin

A new $1.5 million state program seeks to help defense contractors hit hard by federal budget cuts to find customers outside of the military.

The Defense Industry Assistance Grant Program will provide funding to businesses and not-for-profit organizations to support their diversification efforts, such as new marketing and exporting initiatives. The grants will range from $5,000 to $50,000.

Officials said the projects should help defense contractors increase commercial sales.

The grants, from money won by New York State from the U.S. Department of Defense, come as aerospace and defense contractors on Long Island and across the state grapple with reductions in Pentagon spending.

“The program is meant to bring diversification . . . There is a need for this,” said Robert D. Botticelli, chairman of the board of the Aerospace and Defense Diversification Alliance in Peacetime Transition, or ADDAPT, a nonprofit that promotes local defense and aerospace businesses.

“Companies are going through a downturn because of the sequestration,” he said on Tuesday, referring to automatic cuts to the federal budget. “A lot of the Long Island companies have suffered because our aerospace industry is predominantly defense as opposed to commercial aviation.”

For example, Telephonics Corp. executives said in February that sequestration contributed to a 19 percent drop in the Farmingdale company’s sales for the three months ended Dec. 31, 2016, compared with a year earlier.

Garden City-based ADDAPT was begun in 1991 to help local businesses adjust to steep cuts in Pentagon spending after the Cold War’s end. Botticelli said the group wants to work with Empire State Development, the state agency that oversees the grants.

“Our companies can definitely use this program,” he said.

ESD official Matt Watson said the state hopes “to make defense-related companies more resilient to downturns in defense spending. We will be assisting companies in identifying additional civilian-type markets to diversify their portfolio” of customers, he told the ESD board of directors last week before they approved the program.

More information is available at on.ny.gov/2v39l2h or by sending an email to matt.watson@esd.ny.gov.

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