C&C Tooling of Leechburg started making Humvee bumpers for a private company about four or five years ago.
When that order dried up, the business looked for and got a defense contract to do the same work. Clyde Ross had to add 10 people to his company to meet the military's order.
"It was good for Leechburg because all of them basically came right out of Leechburg," he said.
Defense contracts are becoming the salvation of the region's tool and die industry and a growing part of the region's economy.
Military and veteran spending accounted for $3.4 billion of the $26.8 billion the federal government spent in the region in 2006.
"It's a little ironic when you think about it. The only industry we have left is the defense industry," said Bud Liebert, owner of Alpha Carb Enterprises of Leechburg. "Old-fashioned tool and die work," the making of dies, molds and tools for private manufacturers, has all but disappeared for smaller companies, he said.
From 2001 to 2006, defense-related spending in Allegheny, Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Lawrence, Somerset, Washington and Westmoreland counties increased an average of 20 percent annually, according to figures from the U.S. Census Bureau's Consolidated Federal Funds report.
By comparison, federal spending on veterans in the region increased an average of 11 percent per year, and other federal spending here increased 5 percent per year.
Most of the increase in defense spending comes from research and other types of grants, which rose an average 26 percent per year, and contracts for goods and services, which increased an average 24 percent per year.
Ross said defense contracts helped him recover from losing much of the traditional tool and die work his company was founded on.
"We sort of gave that up because of the influx from China," he said.
Liebert said that in addition to foreign competition, particularly from Chinese tool and die manufacturers, companies like Alpha Carb frequently lose good workers to larger companies, which are building power plants and other facilities in China.
"We've kind of been caught in this scenario for awhile," Liebert said. "It's not been easy for a small business."
That's where two nonprofit organizations step in.
John VanKirk, president and executive director of the National Center for Defense Manufacturing and Machining in Latrobe, said Kennametal Inc. …