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American Morning

High-Tech Recession Misses Rocket City

Aired December 28, 2001 - 08:57   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: When you think of high-tech towns, you might think of Seattle or Silicon Valley. But for the highest concentration of brain power, you have to head to Huntsville, Alabama. That's right, Huntsville, Alabama.

While many other cities are feeling the effects of a slow economy, CNN's Fred Katayama reports, Huntsville is thriving.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN FINANCIAL CORRESPONDENT (voice-over): Simulation software used to plan the war on Afghanistan.

UNIDENTIFIED MALE: Allows analysis of attack operations against critical mobile targets.

KATAYAMA: Just one of the technologies born in one of the poorest states, Alabama. In a high-tech oasis called Huntsville. Population, 158,000.

AL SULLIVAN, COLSA: From the ballistic missile defense that we are trying to build, or the umbrella that we're trying to build for the nation, to ensure that we are not at risk from that particular threat, down to the tactical missiles that are being used today in Afghanistan. That technology was developed here, nurtured here, and fielded from here.

KATAYAMA: Once known more for fields of cotton, Huntsville today is to missiles what Detroit is to cars. It's home to the Redstone Arsenal, developer of the U.S.'s first heavy ballistic missile and Nasa's Marshall Space Flight Center. Every U.S. rocket that has blasted astronauts into space was developed here, as was the Hubble Telescope.

(on camera): What transformed Huntsville into a high-tech Mecca was a Hitler connection. The United States wanted to jump-start its rocket program, so it lured Germany's top missile designer, Warner Von Brown and his will team of scientists. They eventually settled in Huntsville in 1950. The team went on to develop rocket engines, that blasted man into orbit and onto the moon.

(voice-over): Von Brown's presence lured many entrepreneurs, like Mark Smith, the founder of the telecom equipment maker, AdTran. MARK SMITH, CHAIRMAN & CEO, ADTRAN: It was the technology, and, Nasa was the attraction. Now, the reason that Nasa and the technology was here, if you go one step further, was due to Warner Von Brown.

KATAYAMA: The city's biggest asset, brain power. One of every 13 people is an engineer, and it's home to 35 retired generals, such as Jim Link at Teledyne and Al Sullivan at Kamber. More than 60 percent of the companies here were spun off by former employees of the arsenal and Nasa. This talent pool has also lured big guns like Boeing, Lockheed-Martin, Raytheon and Northrop Grumman. About the only downside companies groan about: Huntsville's last name.

NANCY ARCHULETA, CEO, MEVATEC: One of the biggest drawbacks is that most people, when they think of alabama, think of some backward state.

KATAYAMA: That aside, the city is strong financially, boasting a AA Bond rating from Standard & Poor's. Unemployment is a puny 3.1 percent, nearly half the national rate. Sales tax receipts are expected to grow 5 percent this year. And since the city isn't dependent on tourism and engineer pay is high, the economy is proving resilient. With defense spending expected to rise, economists say Huntsville should grow next year as well.

Fred Katayama, CNN Financial News, Huntsville, Alabama.

(END VIDEOTAPE)

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