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Sheera FrenkelKenny Holston


NextImg:Factory Towns Revive as Defense Tech Makers Arrive

The factory in Auburn Hills, Mich., had stood vacant for months, surrounded by unoccupied warehouses that had once been used by car companies in the heartland of America’s auto industry.

Last year, a start-up called Swarm Defense Technologies moved into an 8,000-square-foot section of the building to begin making drones for defense. By this summer, demand for its drones had grown so rapidly that the company took over the entire 14,000-square-foot factory.

Today, 47 Swarm employees work in the cavernous space pumping out thousands of drones each month for the U.S. military and other clients. The drones, a little over 10 inches long and less than two pounds, can be used to test anti-drone systems and to simulate attacks. That has made Swarm’s factory a hive of activity in an area where dozens of “For lease” signs are visible.

A man carries a stack of drones, his arms reflecting the red light from the drones.
Swarm is one of hundreds of defense technology companies building factories in once-vibrant industrial cities across the Midwest and Northeast.

“There was a huge demand for drones like ours to provide targets for anti-drone systems or to train drones on,” said Kyle Dorosz, 33, a co-founder of Swarm. He added that “everything about making drones in this place feels right,” since it was “in the DNA of this place.”

Swarm is one of hundreds of defense technology companies that are reviving manufacturing in once-vibrant industrial cities across the Midwest and Northeast. Drawn by local talent, cheap labor and state cash incentives, these companies are building the weapons of the future in old factories or are constructing state-of-the-art sites in Michigan, Ohio, Pennsylvania, Rhode Island and Delaware.

Components of the drone, laid out against a dark background.Drones being packed into a case.
Each month, Swarm’s factory produces thousands of drones.

In January, Anduril, an artificial-intelligence-backed weapons manufacturer, announced that it was building a $1 billion factory in Ohio to make drones and other A.I.-enabled weapons. It has since said it also plans to open factories in Rhode Island and Mississippi.

Regent, a shipbuilding start-up, is constructing a factory in Rhode Island to make electric sea gliders for military purposes. And UXV Technologies, a Danish drone and robotics company, opened a manufacturing facility in Pennsylvania last year.

The locations of the factories are not just good business but also good politics. President Trump, who has unveiled major defense projects since taking office, has pushed for more domestic manufacturing while levying steep tariffs on imported goods. He has also barred the U.S. military from buying products like drones from foreign adversaries such as China.

At the same time, state lawmakers and local representatives are eager to attract defense tech firms to create jobs.

“America is waking up to the fact that our national security depends on making more stuff in America,” said Senator Jon Husted, Republican of Ohio, adding that places like his state “have a competency in making things.”

Mr. Husted, whose father worked at a General Motors factory that later shut down, said he was “thrilled” when he heard about Anduril’s Ohio project this year. “I’ve seen the other side of this, where it was tough going for manufacturing for a long time,” he said.

Christian Garrett, an investor at the venture capital firm 137 Ventures, which has invested in defense tech companies including Anduril and Palantir, said he had pushed start-ups to think strategically about where to construct their factories. Industrial towns in the Midwest and Northeast are appealing because building there can help to curry favor with the federal government and military, he said.

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A model of Regent’s electric sea glider at a factory in North Kingstown, R.I.CreditCredit...

“We’re looking at the government and the Pentagon as the end customer,” Mr. Garrett said, adding that the government sees “that supporting these companies means bringing valuable jobs to these states.”

With advances in artificial intelligence and autonomous systems, young defense tech firms will probably never employ hundreds of thousands of laborers. Still, Mr. Garrett said, the companies can train workers in skills that could translate to other tech jobs.

Deciding to build a factory in Ohio was easy, said Zachary Mears, Anduril’s senior vice president of strategy. The company already had a factory at its headquarters in Costa Mesa, Calif., but needed to expand to meet demand for its products. Ohio offered a $310 million grant and tax-incentive package, he said.

The facility, which is being built from scratch, is expected to be completed early next year. At five million square feet, the space will be modular so it can be configured for production of different products. Anduril said it would employ 4,000 people there.

“The access to work force, the existing infrastructure and the logistics of the site all just made sense,” Mr. Mears said.

Workers in former factory towns often have unique skills for defense tech companies, said Billy Thalheimer, the chief executive of Regent. His start-up is building a factory on the coast of Rhode Island near North Kingstown, partly because residents have generations of experience in boatbuilding.

“Rhode Island is actually Mecca for this kind of talent,” said Mr. Thalheimer, 33, adding that it was more affordable to hire locally than to relocate people with boatbuilding expertise from out of state. In March, his company signed a $10 million deal to supply the Marine Corps with its vessels.

ImageA close-up of Billy Thalheimer's face, his sunglasses reflecting the propellers of a sea glider.
Billy Thalheimer, the chief executive of Regent, said hiring local talent with experience in boatbuilding was more affordable than relocating experts from out of state.

Maddie Macfarlane, a former Navy officer, said she joined Regent last year as a global supply manager because the job allowed her to continue living in Rhode Island and doing work she believed in. The state’s boatbuilding heritage meant “there are lots of skilled workers,” she said, adding that the nearby Naval War College helped create a “pipeline for defense.”

But Aaron Slodov, the chief executive of Atomic Industries, a manufacturing firm in Warren, Mich., who co-founded a conference dedicated to domestic manufacturing, cautioned that building in former industrial towns “takes time and long-term planning.” Companies face supply chain complexities, and it can take years to manufacture at large volumes, he said.

Still, companies like Swarm offer a case study of what can happen. Mr. Dorosz and Ryan Sigmon, who were drone enthusiasts and entrepreneurs, founded the start-up as Firefly in 2017 to make drones for light shows. It largely sold drones to local entertainment companies.

A computer screen monitoring a sea glider, with one box noting its altitude at 33 feet.Two men, wearing white helmuts and dark glasses, sit in the cockpit of a sea glider.
In March, Regent signed a $10 million deal to supply the Marine Corps with its vessels.

Last year, Mr. Dorosz and Mr. Sigmon decided to shift to making drones for defense purposes and renamed the company Swarm. They found the empty factory in Auburn Hills, which Qualcomm had used for making wireless computer chips. The space was easily converted to build drones, thanks to local welders and workers who had experience building assembly lines, Mr. Sigmon said.

The Army, the Air Force and the Navy now buy the drones, which each take under five minutes to make, Mr. Dorosz said. Swarm still makes drones for entertainment purposes as well, he said.

“We’re just excited to be making this here,” he said of the factory. Nearly every person working there had a parent or a grandparent who worked on an assembly line at one of the auto factories nearby, he said.

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A Regent sea glider undergoing testing in North Kingstown.