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A Golden Valley firm is among just a few in Minnesota involved in Iraq
May 17,2004
BY JENNIFER BJORHUS
Pioneer Press
When Aeromix Systems Inc. got the call last week that it had won a $3.7 million contract to help rebuild Iraq, employees "just basically fell off their chairs," sales manager Guido Michelutti said.
"This is the largest order that Aeromix has received." Michelutti said. "I guess it's like winning the lottery."
The contract to build and supply 300 large aerators for Iraq is Aeromix's third reconstruction job there. The company declined to identify who awarded the contract. Earlier the Golden Valley firm did two projects with construction giant Bechtel of San Francisco under a $400,000 contract it landed late last year. Aeromix's deals are all the more noteworthy because they're something of a rarity.
While many Minnesota companies - from ATV maker Polaris to bullet-maker Alliant Techsystems - have cashed in on the country's defense buildup and invasion of Iraq, few are scoring deals to rebuild the country.
Billions of dollars of contracts have been awarded with the $18.4 billion Congress approved last year to piece Iraq's infrastructure back together The Coalition Provisional Authority running Iraq until the end of June has been soliciting everything from riot gear weapons to women's boots and sandbags. So far, little of the work has flowed to Minnesota firms.
"It's interesting. It's kind of quiet," said Rich Sheffer, assistant treasurer at Donaldson Co., a Bloomington based filter maker that is one of the few with a rebuilding job.
Early this year Donaldson wrapped up several projects as a subcontractor to large gas turbine manufacturers, totaling about $6.6 million.
Donaldson made filter houses for trailer-mounted gas turbine power generators and large power plant units, used to restore power to Iraq's electricity grid. Donaldson probably won't do more work until turbine makers such as Siemens AG and General Electric Co. return to Iraq, he said.
A spokesman for Honeywell International, which has 2,500 employees in the Twin Cities area, said it also is involved in "rebuilding projects" that are "in the region that includes Iraq," but said he couldn't say more for security reasons.
Violence, bureaucratic tangles and the prisoner abuse scandal have dogged efforts in Iraq. Iraq-watchers offer other possible reasons Minnesota's crop of contracts is small.
Sheffer suggested that in a country as torn-apart as Iraq, products Minnesota companies specialize in just aren't as relevant in this stage of rebuilding.
"They don't need paint from Valspar," Sheffer said. "They don't need stuff from Medtronic or Target."
Nor from 3M Co. The Maplewood-based health care-industrial conglomerate doesn't have a reconstruction contract despite its wealth of basic industrial and health care products.
"It's a damn good question: Why aren't there more people involved?" said Robert Kaplan, co-chair of the Iraq practice Minneapolis-based law firm Dorsey & Whitney launched last year. The firm has as many as 12 people involved with companies working in Iraq, but the work hasn't been consistent, Kaplan said.
And there are no Minnesota clients. Companies may be reluctant because of the unique bidding process for reconstruction contracts, Kaplan said. Then there's the rising cost of protecting employees in Iraq.
Nonetheless, it's somewhat surprising that none of Minnesota's medical companies have ventured in, Kaplan said.
"There's a crying need for medical services in Iraq. Why hasn't someone come forward from the marvelous institutions we have here to fill that void? Don't know. They have not bitten on it," he said.
Privately held Aeromix employs 30 people and does about $8 million of business a year turning out large mechanical aerators for treating waste and fresh water. While it won't identify who awarded its most recent contract, it did say it is an Iraqi organization.
The company held a strategy session Monday to plot the logistics of building the machinery and getting the equipment shipped in batches to Iraq by the end of the year. The firm is waiting on another quote it submitted to oil and construction conglomerate Halliburton to provide aeration equipment form movable water treatment facilities for the U.S. military in Iraq.
General manager Buddy Harris says he's on the phone to Iraq every day.
That's a big change for a company that deals mostly with municipalities, although the firm has had its brushes with world leaders.
Aeromix also builds decorative fountains. It supplied five aeration devices, three of them fountains, to the Best Buy corporate campus in Richfield. Harris said Aeromix also built the fountain installed two years ago at the Kennebunkport, Maine, home of President Bush's family.
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