Insitu chooses Bingen for expanded operations

December 17, 2011

Insitu ended two years of suspense Wednesday, announcing it will expand its footprint in Bingen, the community where its headquarters are based.

Several Gorge communities had vied to become the host site for the new facility and competition for the campus was intense. The company received 27 responses from public and private entities to the request for proposals.

The company, now an independent subsidiary of Boeing, issued a press release Dec. 14 stating it would centralize manufacturing operations in two new planned buildings near its current site in Washington.

The City and Port of Hood River had been involved in negotiations with Insitu, offering a potential site for the new campus in Hood River.

"We are thrilled Insitu is staying in the Gorge," said Michael McElwee, executive director for the Port of Hood River following the decision. "They represent a growing technology sector with economic importance for our collective future."

Construction of the Bingen-based 70,000-square-foot production facility and a 30,000-square-foot engine testing building is scheduled to begin in 2013 and be completed in 2014.

"After careful consideration, we are moving forward with a plan that matches our current needs and a location that can accommodate growth," said Steve Morrow, Insitu president and chief executive officer, in the Dec. 14 press release.

"We will continue to right size our facilities, as necessary, to meet our business objectives."

There are currently about 200 employees in Oregon. The Dalles based employees will be moving to Bingen when the facility is complete.

According to Jill Vacek, media relations spokesperson for Insitu, "There are no plans to move employees out of the Waucoma building in Hood River."

"I commend the work of my staff and our state's Department of Commerce, who worked tirelessly to ensure Insitu understood the advantages of doing business in Washington state, and ultimately chose to grow here," said Washington Gov. Christine Gregoire in a written statement on the news.

According to Schuyler Hoss, Gregoire's regional representative, two pre-existing Washington state tax incentives added to Bingen's attractiveness.

Specifically, Hoss noted that Klickitat County is classified as an economically distressed county, thereby offering incentives to businesses who invest there. Washington state also has special aerospace industry targeted tax incentives. Hoss stated that neither of these were newly added incentives and had been on the radar for Insitu during its three-year site deliberation process.

Addressing challenges that came up during the Bingen site negotiations, Hoss noted representatives from the city of Bingen, the county, the port and state worked closely with Insitu to address site access issues where campus roads will enter and exit SR14.

"We have several good options under discussion on how to resolve access," he said.

The company currently occupies 23 buildings in the Mid-Columbia, with more than 500 of these individuals working out of the Bingen headquarters. They also operate facilities in White Salmon, Hood River, The Dalles and Stevenson. Additionally, the company staffs offices in Vancouver and in Australia.

Once the new buildings are completed and occupied, Bingen will be the sole location for all of Insitu's production operations.

Employees at the company's 90,000-square-foot manufacturing plant in Stevenson and 30,000-square-foot logistics center in The Dalles will be moving to Bingen when construction is complete but there will be no job reductions as a result of the consolidation of services, according to Insitu's press release.

Insitu currently employs 800 people in the Columbia Gorge and manufactures unmanned aircraft systems primarily for military operations but also for commercial and civil purposes.

"Insitu has achieved extraordinary growth due in no small part to its agility," stated Morrow in the press release. "A more mature, efficient production operation in the Columbia River Gorge area will enable us to be even more responsive and adorable in meeting growing customer needs, ultimately allowing us to be more competitive and positioning Insitu well for future growth."

The company expects growth projections to remain unchanged despite the end of the Iraq War and U.S. troops expected to withdraw from Afghanistan in 2014, according to Vacek.

"We expect the intelligence, surveillance and reconnaissance (ISR) services demand to grow as U.S. troops move out of Iraq and Afghanistan and see a need to provide ISR to support troops are they leave both countries. We have positioned ourselves to support that demand," she said.

In 2009, the company invited Gorge communities to submit conceptual plans for a 300,000- to 400,000-square-foot campus that would be sizeable enough to consolidate operations.

Insitu had put the campus project on hold while waiting for the Pentagon to award the Small Tactical Unmanned Aerial System contract.

In the summer of 2010, Insitu beat out three competitors and won a $43.7 million contract with the Department of the Navy to engineer and manufacture the Integrator, a larger and more sophisticated model of UAS than the ScanEagle.

The Integrator is outfitted with a laser range-finder and facilitates communication between ground units. It also houses a camera that provides a broader field of vision to accommodate a wide variety of missions.

Insitu executives expected full-scale production of up to 56 Integrator systems to begin in 2013. The UAS will be deployed by Marine Corps land forces, Naval Special Warfare Command and Navy ships.

With Insitu achieving coveted Program of Record status from the Pentagon, company executives believe funding for UAS production and application would be included in the annual Congressional budget.

Insitu has maintained a "fee for service" contract with the Navy, which includes the Marines, since 2004. The company has earned about $300 million per year by providing thermal and electro-optic images to ground units via the ScanEagle.

Insitu has ScanEagle contracts with the Air Force, special teams in all branches of the military and with allied forces in Canada and Australia.

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