Monday, May 12, 2008
For more than 20 years, ManTech International experienced steady growth satisfying the government's seemingly insatiable appetite for technology and services to support intelligence collection and national security.
Then the Cold War ended, and funding for such programs was cut. In the mid-1990s, George J. Pedersen, a co-founder and the chief executive of the Fairfax government contractor, looked to the private sector for growth, selling software to banks and other commercial customers.
"What we came to realize is we know a good bit about the defense business," Pedersen said. "We came to realize we don't know anything about the commercial business."
ManTech got out of the commercial business and returned its focus to national security. Soon after, the Sept. 11, 2001, attacks reshaped the local economy with a burst of demand for services in which ManTech specializes.
Many chief executives fail to keep their jobs when things go sour. But Pedersen is unusual among top executives at Washington's largest public companies, having served for 40 years, guiding his company through many ups and downs.
Typically, chief executives in the region have served for five to 10 years. Only a handful have lasted more than a decade, including at General Dynamics (Nicholas D. Chabraja, 11 years, and he's set to leave in June 2009), Capital One (Richard D. Fairbank, 14) and The Washington Post Co. (Donald E. Graham, 17). The dean of the leadership corps is J.W. Marriott Jr., who has worked at the Bethesda hotel chain bearing his family name since the 1950s and has been chief executive since 1972.
Pedersen, Marriott and other long-serving top executives are no strangers to the business cycle's fluctuations. They have seen the Washington area evolve from a government town to a bustling economy not only of contractors but also of technology, finance and hospitality firms.
And now they face another period of tumult. The housing and credit crunch, having already punctured the real estate bubble, has spiraled into a general economic downturn that could threaten other sectors. An administration change looms in Washington, sending unclear signals about the future for government contracting.
Many executives remain optimistic. Marriott sees some hope in the government's response to the downturn, compared with the savings-and-loan crisis and other downturns. "What is good about what's going on is you're getting a very strong reaction from the Fed and the federal government," he said.
Pedersen is bullish on the prospects for government contracting, regardless of who becomes president.
"What will change is how that money is spent. And in theory, they're going to withdraw troops from Iraq. . . . Some of the hardware and the ammunition and things of that type will go away," Pedersen said. "The intellectual type of research and technology that most of the companies in Washington are engaged in -- the mission-critical stuff of developing IT systems and collection systems -- is not going to go away. In fact, it's going to increase."
Whatever challenges lie ahead in the business cycle, Pedersen and other longtime executives dismiss the idea of retirement, saying they are doing exactly what they want with their lives. When asked about the possibility of stopping work, Pedersen said simply: " No comprende."