#6: Moffet's reach extended for decades
BY PETE CAREY
Mercury News Staff Writer
On Labor Day, 1956, the first
of 300 moving vans
set out from Lockheed Aircraft
Corp.'s Burbank
headquarters for the Santa
Clara Valley, carrying the possessions
of 600 familes and the equipment
for the research labs of the
company's new missiles and
space division.
A month later, the first Sunnyvale
building of
what would become a 600 acre
campus was occupied, setting the
stage for a defense industry
buildup that would greatly
accelerate the transition of
the Santa Clara Valley from
orchard lands and sleepy towns
to a metropolitan region rooted in
technology.
Now, with the Cold War a memory,
the defense industry
is completely overshadowed
by the giant commercial
high tech industry that followed
it, but for years, it
was one of the biggest forces
reshaping the region.
``Lockheed was the one that
exploded the growth,''
recalls Robert Arnold of the
Center for the Continuing
Study of the California Economy.
From the day the moving caravan
began arriving, the
valley's growth accelerated.
Everything grew
rapidly and massively -- employment,
the sheer mass of
technology-related businesses
and residential
development.
The arrival of Lockheed marked
the early stages of
a huge Cold War boom in what
came to be called the valley's
``electrical machinery and
ordinance industries.''
Ten years later, this evolving
web of industry and invention
would be called the ``aerospace
electronics sector,''
precursor to the Silicon Valley
of today.
There was a healthy commercial
electronics industry
already in place in 1956, with
the valley's Palo Alto
flagship, Hewlett Packard,
engaged in substantial
defense work. Varian Associates
Inc., also of Palo Alto,
was the hub for a post-World
War II expansion
in radar and microwave by companies
such as GTE
Sylvania in Mountain View.
Philco Ford in
Palo Alto opened, specializing
in space
electronics and, later, telecommunications
satellites.
For the next three decades,
Lockheed built spy
satellites and submarine-launched
missiles, developed electronic
eavesdropping systems and even
dabbled in designing an Air Force
manned orbiting laboratory
which was never built. The
valley also turned out armored
vehicles. The M113 made by FMC Corp.
was rolling off a Santa Clara
assembly line by 1959, later to
be followed by the Bradley
Fighting Vehicle.
Economist Richard Carlson calls
the period
``Silicon Valley II,'' because
it came after the post-war boom in vacuum
tube-based defense electronics.
``Lockheed was one of the
later comers,'' Carlson said.
``Varian was probably the first
really big success in defense
aerospace'' locally.
There had been plenty of preparation
even before
then. Lee de Forest, who developed
the three-element vacuum
tube in 1906, worked with others
at Federal Telegraph in Palo
Alto to use his invention,
which he called an ``audion,'' as an
amplifying vacuum tube. This
became the building block of radio and
electronics until the invention
of the transistor.
Federal Telegraph was absorbed
into American
Telephone & Telegraph.
In the late 1920s, the Navy
began looking for a
home for the Macon, a new dirigible.
Laura
Thane Whipple, a Niles real
estate agent, spotted
a 1,700 acre site that was
for sale at the south
end of San Francisco Bay, and
recruited area
cities to purchase it. Santa
Clara County
communities came up with $100,000
and San
Francisco raised the remaining
$430,000. In 1931,
the land that would become
Moffett Field was sold
to the U.S. government for
one dollar. In
1933, it was commissioned as
a naval air station,
and became a nucleus of future
defense
industry growth -- just as
the various city
fathers had hoped.
Research at Stanford University
also gave a boost
to the valley's defense work.
But nothing
altered the landscape like
the arrival of
Lockheed, one of the largest
defense firms in the U.S.
Economist Arnold recalls a friend
in Saratoga
complaining how hard it had
become to drive to
Palo Alto because of the Lockheed-generated
traffic congestion.
It was more growth than the
valley had ever seen.
Between 1955 and 1963, manufacturing
employment rose more than two-and-a-half
times,
attaining an annual growth
rate of nearly 13
percent, according to a 1964
economic study by the
Bank of America. ``As a result
of this sharp
expansion, manufacturing has
become the largest
single contributor to the county's
economic
growth,'' the study reported.
The sudden growth in manufacturing
was largely due
to activities associated with
defense space
equipment and missiles, the
study concluded.
Employment in that sector of
the economy rose
from less than 3,000 in 1940
to 68,000 in 1963, an
annual growth rate of 14.6
percent.
As defense manufacturing grew,
Sunnyvale went from
a hamlet of 9,829 people in
1950 to a city
of 52,898 by 1964, and San
Jose doubled from
95,280 to 204,196. Santa Clara
County's
incorporated cities, fed not
only by defense jobs
but an emerging electronics
industry, grew from
of 296,600 to 658,700 people
during the same period.
By 1963, nearly one out of every
three workers in
the county was engaged in manufacturing
activities. The proportion
in 1955 was one in five
and in 1940 it was one in seven.
It was a huge
boost for the economy: Workers
in the ``electrical
machinery and ordinance industries''
were
paid $384 million in 1962,
compared to less than
$30 million in 1955.
Between 1955 and 1963 over 80
percent of the jobs
added to manufacturing in the
county were in
electronics and missiles.
From these industries came the
Polaris and Trident
missiles, satellite tracking
networks, rocket
boosters, spy satellites, semiconductors,
and
troop carriers. The National
Aeronautics and Space
Administration complex at Ames
Research Center,
just across Moffett Field from
Lockheed, gave
another strong boost to high
tech industry.
In 1966, the aerospace electronics
sector still
was 70 percent government and
only 30 percent
commercial. Commercial solid
state electronics
grew largely independently
of defense, but the
defense sector was an early
source of demand for
its components.
Though the defense industry
had its ups and downs
during the Cold War years following
WW
II, over the long term it tended
to grow. But the
collapse of the enemy -- the
Soviet Union -- and
the end of the Cold War dealt
it a heavy blow in
the 1990s.
Today, Lockheed is down to 7,850
jobs from a peak
of 24,875 in 1986. At just
2.1 percent of
the valley's employment, the
defense industry is a
shadow of its former self.
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