SALINA — Lockheed Martin (NYSE: LMT) is “likely” to add jobs at its suburban Syracuse plant after the company announced a deal on a joint venture to provide Germany with an air and missile defense system. 

Lockheed Martin, a Bethesda, Maryland–based defense contractor, and MBDA Deutschland on March 8 announced a new joint venture to pursue “TLVS,” the next generation integrated air and missile defense system for the German Bundeswehr, or the nation’s armed forces.  TLVS is short for Taktisches Luftverteidigungssystem.

The joint venture is expected to become the prime contractor for the new system, which is currently being negotiated with Germany’s procurement office for the Bundeswehr, BAAINBw, Lockheed Martin said in a news release.

“We cannot provide a firm number of jobs because this work is still being negotiated, but the plan is to bring the surveillance-radar work back to Syracuse, which will likely create jobs. And right now we are only talking about the German contract. With Germany as the launch customer for this system, we anticipate that other countries will want this needed capability in the future as well,” Gregory Kee, managing director of TLVS/MEADS at Lockheed Martin, said in a statement to CNYBJ on March 12.

Both Kee and Dietmar Thelen, representing MBDA, will lead the company from the MBDA Deutschland office in Schrobenhausen, Germany. 

Besides Lockheed’s Salina plant, the company will also have operations in Dallas, Texas and Huntsville, Alabama, as well as Ulm and Koblenz, Germany. 

Kee and Thelen both have “extensive” backgrounds with the armed forces, the North Atlantic Treaty Organization (NATO), and defense-procurement organizations. They also have “strong” experience in military, industrial, and international affairs, Lockheed Martin said.

“The public figure the German government provided for the program was 4 billion Euros, but again we are in negotiations and the final contract value is to be determined,” Kee said in the statement.

About TLVS

TLVS will leverage the development results and experiences from the $4 billion investment of the trilateral MEADS program involving the U.S., Germany, and Italy. It’ll also “deepen” the U.S.-European partnership through a continued, shared commitment to local industry, safety, and security. MEADS is short for medium extended air-defense system. 

TLVS is a modern system that will “transform” Germany’s defense capabilities and “enable this key NATO framework nation to set an important precedent in how neighboring nations address current and evolving threats for decades to come,” per the release. 

BINGHAMTON — A New York City program that has sent at least five homeless families to live in Broome County is illegal and must stop, say county officials.

In recent weeks social-services workers noticed a pattern of families applying for aid saying they didn’t need help with housing, says Broome County Social Services Commissioner Nancy Williams. They told workers their rent in Broome County was being paid for a year by New York City.

Broome County Executive Jason Garnar said in a news release that the New York City Human Resource Administration (HRA) has used a “Special One Time Assistance” (SOTA) program to send homeless people to Broome County.

“I support all efforts to help people out of homelessness,” said Garnar. But he noted the relocations are illegal. “Recipients of this program have been relocated by New York City to upstate New York, then abandoned by New York City HRA.”

“After being relocated by New York City, these individuals then seek medical, food, cash, and other forms of public assistance from the targeted county,” he said. “That is illegal and could have a significant impact on our taxpayers in Broome County.”

Williams said social services identified six homeless families, about 15 individuals, who were moved to Broome County just since November.

Assistant Broome County Attorney Howard Schultz tells CNYBJ he told New York City HRA to cease and desist. He also says New York City officials confirmed five of the families had been sent to Broome County.

“You can’t deal with it by sending it someplace else,” Schultz says of the Big Apple’s homeless problem.

“Broome County believes New York City HRA’s actions are in direct contradiction to New York State Social Services Law Section 148, which requires New York City to provide assistance and care for their residents,” Schultz says.

In fact, it’s criminal, he says. “It’s a misdemeanor to transfer homeless people in need to another place.”

Every community has a homeless problem, Schultz says, and that’s why state laws prevent one place from sending its homeless residents elsewhere. “New York state law protects us from that gaming of the system,” he notes.

 Williams says New York City’s HRA isn’t even following its own rules. Recipients are supposed to be working or generating enough income to make future rent payments.

None of the people who moved to Broome County had a job, Schultz says. One person had a job while in New York City, but quit it to move to Broome County. Another two-person family is receiving rent for a year in Broome County even though they were sanctioned while in New York City for not taking part in required job-training programs.

Not only were the families moved here despite laws forbidding it, social-services agencies were not told about pre-existing problems. Schultz says a family sent to Broome County had child-welfare issues in the past and no one notified Broome County officials so they could follow up and make sure the two children involved were receiving proper care. Workers in Broome County only learned about it when they investigated. “We looked it up in the system,” Schultz says.

Schultz and Williams stress that Broome County provides for those in need. Schultz made the point that dislocating families from New York City to Broome County makes it harder for children to succeed in school — and if they need to be relocated back to the Big Apple when the rent money is gone, it will make things worse still.

A 3½-hour drive from New York City, Broome County has much lower rents. In Broome County, fair market monthly rents average just over $600 for a one-bedroom apartment, according to the U.S. Department of Housing and Urban Development. The same figure for New York County (Manhattan) is $1,558 a month. For the year’s rent paid by HRA, that represents a cost difference of nearly $12,000.

New York City pays even more for space in homeless shelters, Williams says. “That would be the real comparison.”

A 2017 analysis by the New York City comptroller found that some homeless shelters were charging more than $400 per night and some charged as much as $549 a night.

Schultz says he is asking New York City to stop the program immediately and reimburse Broome for the expenses it has incurred caring for people who, by law, are supposed to be cared for by New York City.

Schultz says he doesn’t know if other upstate counties are also experiencing the arrival of people from the HRA program, but says, “I don’t think it’s just Broome County.” He says it’s possible social-services officials are handling similar cases across Upstate without even realizing it. “People just process it and don’t think about it,” he says.

“I have to believe it’s happening all over.”

BINGHAMTON — U.S. Senator Kirsten Gillibrand (D–N.Y.) is supporting a bill that would increase the availability of affordable loans for small manufacturers through the U.S. Small Business Administration’s (SBA) 7(a) and 504 loan-guarantee programs.

The “bipartisan” legislation would increase the loan-guarantee limit for loans to small manufacturers, eliminate a penalty that new manufacturers are required to pay when applying for an SBA 504 loan; eliminate loan fees for loans under $350,000, and cut loan fees in half for larger loans, Gillibrand’s office said in a news release issued March 9.

The Democrat from Guilderland that day joined community leaders and the co-owners of 3i Graphics & Signs in Binghamton to discuss the proposed “Investing in America’s Small Manufacturers Act.” 

“Too many small manufacturers in New York still struggle to access the capital they need from banks to expand their businesses and create more jobs in their communities,” Gillibrand said in the release. “The bipartisan [legislation] would help ensure that every hardworking small manufacturer has the capital and tools necessary to succeed. If we really want to fix our economy, then we need to start rewarding work again, and this bipartisan bill is a good place to start.”

Both co-owners of 3i Graphics & Signs applauded the proposed legislation.

“We have many loyal and wonderful customers in the region. Having worked through the financial crisis in 2008 when we first attempted to purchase this company, we know first-hand the value of SBA guarantees to incentivize banks to lend to business,” said Eric Olsen, co-owner of 3i Graphics & Signs. “We are grateful Sen. Gillibrand chose 3i Graphics & Signs as the backdrop to introduce [the] legislation.”

The Investing in America’s Small Manufacturers Act would also increase opportunities for more education assistance to “help small manufacturers succeed,” Gillibrand said.

The average approved SBA 7(a) loan in fiscal year (FY) 2017 was $407,616, and about 34 percent of all 7(a) loans exceeded $2 million. In FY2017, the SBA approved nearly 69,000 7(a) and 504 loans, providing more than $30 billion in lending to small businesses and supporting more than 630,000 jobs.

“As a co-owner of a small business who utilized the SBA, we understand the importance of the SBA guarantee. Any improvements to that process or that guarantee are certainly helpful,” added Nick Taro, 3i Graphics & Signs co-owner along with Olsen. “It’s also important that small businesses be supported by their local community — other businesses, schools and organizations who ‘buy local’ and keep the money in Broome County are very much appreciated. We make every effort to do that as well.”

The bill is sponsored by U.S. Senator Chris Coons (D–Del.) and is co-sponsored by U.S. Senator Cory Gardner (R–Colo.). The Washington, D.C.–based National Association of Manufacturers also supports the bill, according to Gillibrand’s office.

BUFFALO — In his first annual “Message to Shareholders,” M&T Bank’s new leader paid tribute to his predecessor and explained an unprecedented change in business borrowing.

M&T Chairman and CEO René F. Jones began the message acknowledging the legacy of Robert Wilmers, who died suddenly in December at the age of 83. “There is no denying that, over the course of 35 years, Bob became synonymous with M&T.” 

Jones shared one measure of Wilmers’ success. He wrote that people who invested in the bank’s stock in the second quarter of 1983, when Wilmers was named CEO, and held the shares until his passing, would have seen their investment grow at a 15 percent compounded annual rate over the decades. That would have produced a 126-fold increase in their original investment. An $8,000 investment then would be worth more than $1 million now.

Jones wrote that M&T was carrying on Wilmers’ banking tradition, explaining that there is a process of self-selection at the bank. “For many years, potential employees had to be willing to join a regional bank headquartered in Buffalo, marked by strong performance, but operating in slower growth, mid-tier cities in an area once described as the “rust belt.”

Jones also said the “Message to Shareholders,” a Wilmers innovation referred to as “The Letter,” would go on. “It is our privilege, in fact our duty, to continue to prepare the annual “Letter” in this tradition of candor, fulfilling the legacy that defines M&T.”

Discussing the bank’s results for 2017, Jones wrote that net income was up 7 percent to $1.41 billion. Additionally, net interest margin — the difference between the average yield on assets and the average cost of funds that support those assets — climbed from 3.11 percent to 3.47 percent.

Concern about commercial loans

Jones discussed in depth what appeared to be a weakness in the bank’s 2017 performance: a decline in commercial and industrial loans.

“These loans, which finance the growth of middle market and small businesses within our markets, had increased at an annualized rate of more than 7 percent from the end of the financial crisis through 2016, as the economic recovery took hold. However, this trend slowed and then reversed in 2017, as our total balance of commercial and industrial loans declined by 4 percent during the year.”

According to Jones, M&T’s results were not unique among banks. Overall bank business lending across the country was up just 1.2 percent. “Deteriorating business loan growth during a sustained economic expansion is without historical precedent for banks. Since World War II, commercial and industrial loan growth by U.S. banks has declined to a 1 percent annual rate only during or in the immediate aftermath of recessions,” he wrote.

It’s not that businesses aren’t borrowing, he said, but that they are going around banks and borrowing from capital markets. They are getting needed capital from corporate bond offerings and loans from private-equity partnerships and mutual funds.

“This differing model of credit investors may have significant implications for the businesses that have come to rely on them as a source of credit — implications of which may only become fully apparent should conditions deteriorate,” he wrote.

The shift is large, according to Jones. Business credit grew $412 billion in the first nine months of 2017, $250 million of it — 60 percent — came as corporate bonds. Some $13 billion in new loans were made by mutual funds, Jones said, with shareholders who have no direct relationship with the borrowers.

“While these investors have played a growing role of late, there is no certainty that this will continue — either when returns in other areas of the economy prove more attractive, or when the perceived risk of investing in such loans becomes too great,” he wrote.

While markets are strong, the problems this may create aren’t visible, Jones said. However, in tough times businesses sometimes turn to their lender as an adviser.

“As distant credit investors take the place of community banks, it is very much unclear whether their decisions will, or even may, consider factors beyond those financial in nature,” Jones wrote. “Such investors clearly cannot fill the advisory role played by banks, and seem unlikely to consider in their decisions factors such as a business’s vital role in its local economy.”

That may matter at some point, he said, adding that “economic cycles are likely not things of the past. Inevitably, some unforeseen event will bring these favorable conditions to an end.”

M&T Bank operates branches in New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia, and the District of Columbia. It ranks number one in deposit market share in the 16-county Central New York area.