Audio
Business Elevated Podcast (Episode 3)
This podcast is the third in a series featuring business and government leaders discussing what it’s like to live and work in the great state of Utah. It features a conversation between the Utah Governor’s Office of Economic Development’s Communications Director, Pete Codella, and Daniel Gelston, President, Broadband Communications Sector, L3 Technologies. Gelston shares his professional and personal experience moving to Utah with his family in the summer of 2017 to begin his work at L3 Technologies.
The Business Elevated podcast is also available on Apple Podcasts, Spotify and Stitcher.
Transcript
Introduction
Welcome to the Business Elevated Podcast, where we discuss what it’s like to live and work in the great state of Utah. Did you know Utah is frequently ranked the best state for business by Forbes? This podcast is a production of the Utah Governor’s Office of Economic Development. Thanks for joining the conversation.
Conversation
Pete Codella (0:22): Welcome to the Business Elevated Podcast. I am Pete Codella the communications director for the Utah Governor’s Office of Economic Development, and here with us today, we’re privileged to talk with Dan Gelston. He is the president of L3 Technologies. Dan, relatively new to Utah, and welcome to the podcast.
Dan Gelston (0:44): Thank you, Pete, I appreciate it. I should probably make a quick correction. You gave me a fantastic promotion. L3 Technologies is about a 31,000-person business. I’m the president of a business division with about 15 percent of that population.
Pete Codella (0:58): And that population in Salt Lake?
Dan Gelston (1:02): Correct, yes. So, I’m the president, formally, of Communications Systems–West. We’ve got about 3,800 people here in my sector, [the] majority [are] full-time, here in the valley.
Pete Codella (1:45): So, talk to us a little about L3’s history in the state of Utah.
Dan Gelston (1:48): Sure, it’s a really impressive one, and I’m finding one that not many people actually know about. So, we started here as Sperry Engineering, back in 1956, and the company actually worked on tactical nuclear missiles, the Sergeant missile back in height of the Cold War. And then, controlling those missiles as the decades went on, really got this business into classified communications. So now this business has moved on. Nobody should worry. We’re not building tactical nukes here by the airport. We’ve got a little over 1 million square feet, and as I said, 3,000-plus folks working on secure communications and command and control. Basically, if you’ve got a need, primarily military, intelligence community, for classified communications that enemies can’t break into, decode, intercept; that is what we focus on.
Pete Codella (2:44): That’s great. That sounds important.
Dan Gelston (2:48): Thank you. Yes, very.
Pete Codella (2:50): L3 applied for and received a post performance tax incentive from our office, from GOED. Talk to us a little about the plans for expansion and what’s coming up for L3?
Dan Gelston (3:00): Yeah, certainly appreciate that. It was great working with GOED on that process.
Pete Codella (3:07): Thank you.
Dan Gelston (3:08): A very positive experience, one we may touch on later on that I had not encountered in other states. So that was really refreshing. A $1.4 million incentive, about $100,000 of that is an education incentive. So a piece for education, primarily training talent, focused on engineering talent here in the valley. About 80 percent of my employees are native Utahans and about 80 percent altogether have gone, degree-wise, to either U of U, BYU, Utah State, or Weber State. So that’s an exciting program that we look to help build a pipeline and not only identify qualified, primarily engineering students right now, that’s really where we’re focused on growth as far as an employee base, but also getting them put in for their security clearance early-on in their years in college. It takes about two years at this point to get the level of security clearance that we need to have them have to do a lot of the work we do here.
Pete Codella (4:20): Two years? That’s government red tape, I guess?
Dan Gelston (4:22): Yes, yup. A big backlog and it is a government-run process. So we’re hoping to identify kids sophomore/junior year, put them into the program, work with a reimbursement type scenario for their education, and also put them in that pipeline for the clearance. The other piece is helping us be more competitive. We’ve got some great growth initiatives and growth momentum in the business. I’m confident that we’ll see this business growing from about $1.5 billion to upwards of $2 billion in the next couple of years. And one of the major areas of growth is involving electronic warfare, electronic attack. It’s disrupting the signals and the spectrum that our enemies would use. And we’re extremely fortunate in taking advantage of communications really merging with the electronic warfare set in the spectrum to go after a very large prime job opportunity with the [U.S.] defense department. We’re one of two contractors that won an initial award and we’ve got a down select inside of a couple of years. And if we win, it’ll be a multi-billion dollar contract to put an electronic attack pod on something called a F18 Growler, so the F18 fighter jet converted for electronic warfare purposes. So this incentive, because this work would be won here, and if that comes to fruition, these pods will be built here in the valley. It’s a little help from the state working with us to help make us a bit more competitive to win this rather large job, billions of dollars coming in here to the state.
Pete Codella (5:46): So your company develops the technology and does the manufacturing?
Dan Gelston (5:52): Correct, yes, exactly.
Pete Codella (5:54): It sounds like you’ve got a pipeline of talent. Talk about the skills that you need people to have. Looking for engineers? You’re willing to train people? How does that work? I’m guessing with the expansion, you’ll need to hire a few people?
Dan Gelston (6:09): Exactly, more than a few. I’d hire hundreds tomorrow if I could. The government traditionally goes through a cycle, a business cycle. So, they spend time developing next generation systems and then when those are developed, they go into a procurement cycle and they focus on buying the stuff they just designed. Right now we happen to be in a design phase so there’s not quite as much building going on, the procurement has slowed a bit. Instead the government is focusing on, “Hey guys design us the next generation widgit, the next generation technology.” So, as a result of that, of course we have to match their cycle if we want to be competitive and successful. So right now we are really focused on engineering work to design those future systems, those future technologies. So, as a result of that, I’ve got about 1,500 engineers here based out of Salt Lake, about 1,000 of them full-time on-site, and about 500 spread around six of the seven continents on the globe. And if I could hire literally 130 more tomorrow, I would; primarily systems engineers, EE’s (electrical engineers), and software engineers.
Pete Codella (7:26): So engineering is… there’s a good opportunity there, especially if you want to live in Salt Lake, in the area.
Dan Gelston (7:32): Without a doubt. And from junior/mid/senior levels. Obviously these are very well-paying jobs; the majority of them six-figure-plus jobs — doing some pretty exciting work. I mean, we’ve got a lot of competition here in the valley; Silicon Slopes. We find that more and more…
Pete Codella (7:50): Because they take engineers from the pool of engineers you’re trying to hire from, is that [why]?
Dan Gelston (7:55): Yes, more and more.
Pete Codella (7:57): Got it.
Dan Gelston (7:58): So, traditionally we didn’t compete as much with your software companies, but now we’re finding as technology advances, it’s more about the software going into the box then maybe the box itself. So that kind of puts us sometimes at crosshairs with the Adobe’s and your classic Silicon Valley companies. So, good for the engineers. They’re in greater demand. More people want them. So that’s a good thing for their salaries and their long-term prospects. But we certainly… I think unemployment is what, 2, 2.5 percent in Utah?
Pete Codella (8:33): It’s very low, yeah, low 3s.
Dan Gelston (8:35): Fundamentally it’s about zero for engineers here in the state, so it’s quite competitive.
Pete Codella (8:40): So you’ve touched on this a little bit, the technology that L3 is working on. Anything cool or new that you can share?
Dan Gelston (8:50): Certainly. We have three primary areas of growth. As I said, we’re looking at some, you know, $100s of millions worth of growth in the next couple of years. Those three areas would be: assured communications, electronic warfare, and something called battlespace networks, and I’ll quickly explain what those three codewords mean. Assured communications really are stealthy communications. If you think back to the 1980s, the concern of the defense department was radar with the defense against radar being stealth. So many people remember the stealth bombers, the stealth fighters. Looking at today’s problem set, with the potential of a future peer-to-peer scenario, it’s not so much radar and stealth, it’s more communications. Everything now on the frontline communicates, has command and control, has some sort of data link going to it, thinking of UAVs, airplanes, ground units, submarines, you name it. And our potential adversaries have realized over the last 20 years that that is a targetable, in a passive sense, a targetable weakness of the United States we rely on it very heavily.
Pete Codella (10:06): To monitor that communication.
Dan Gelston (10:08): Monitor it and actually target us off that. So if you think of, “Top Gun” is usually the illustration I give, you know Maverick… beep-beep-beep, oh, they’ve got a missile lock on me! That’s an active system, so at least you know the bad guy has locked on to you and something bad is about to happen. In this new future scenario, it’s passive. So if you communicatie, the enemy can target you just like in “Top Gun” and send a missile your way, but you wouldn’t even know it’s happening.
Pete Codella (10:36): Kind of eavesdropping and you don’t know.
Dan Gelston (10:37): Yeah, exactly. And be able to geo-locate you based on that radio signal. So, working on, if you will, stealthy versions of communication that hide below the noise floor, as we like to say, inhibits the enemy’s abilities to target you based on your communications so you could still talk, you could still control predators in the sky, but they couldn’t target and send a missile your way as a result. We like to say it’s the ability to shout the quietest, if you will. Electronic warfare is something I touched on. It’s actually attacking the enemy’s ability to talk, to send data, to own the spectrum, to disrupt their operations so they can’t coordinate, they can’t communicate, they can’t control their weapons, their unmanned vehicles, things to that effect. That’s that big contract we’re pursuing with the help of the EDTIF [a post-performance Economic Development Tax Increment Financing tax credit rebate]. And lastly battlespace networks. So if you can imagine we’ve got some very important communication networks, one of which is senior leader networks. So if you think of the president or the secretary of defense traveling. How do they communicate, particularly in an emergency situation? Well, we work very closely with senior members of the defense structure, as well as the leadership structure of the country, to ensure that they have those networks in a classified secure realm so they have the ability to talk and coordinate and make decisions and send those decisions to the rest of the country without the rest of the world being able to listen in and take advantage of those communications. So those three areas really I see are the main areas of growth and excitement. Unfortunately, beyond that they get classified pretty quickly so I apologize if it’s somewhat of a vanilla description.
Pete Codella (12:28): No, I think that’s great. I think your background’s maybe a little unique. You were recruited, I think, to L3 by a headhunter, correct?
Dan Gelston (12:38): Yes.
Pete Codella (12:39): And you’ve got some military background. Do you want to share how you bring kind of your personal experience to bear here?
Dan Gelston (12:46): Yeah, so I was a ROTC kid, they paid for my undergrad, Uncle Sam paid for my undergrad and as a result I owed them at least four years active and four years reserved duty. I spent time originally as an armored cavalry officer at the DMZ in Korea. So, think tanks and Bradley fighting vehicles, 22 years-old, driving over trees, blowing up stuff. It was a good run.
Pete Codella (13:06): That sounds fun.
Dan Gelston (13:08): Yeah, I can’t complain. I’ve never been so hot, so cold, so hungry, so miserable at times but otherwise, it was fantastic. Kind of a “Tale of Two Cities,” best of times, worst of times. I then switched over to intelligence and worked for the intelligence community, defense intelligence agency, central intelligence agency, post 9/11 in the counter terrorism field. So that experience in the Middle East and associated countries as well as that frontline experience in an armored cavalry unit really gave me an understanding of what the fog of war means. You read about it, you hear about it, it’s in the movies. That gave me that firsthand experience and understanding the necessity of secure communications to cut through that fog of war to preserve the lives of our service members. Particularly saying that many of the men and women I grew up with in the army and intelligence community are still out there, it’s quite a personal mission to me. We like to say in the armored cav, they trained us to shoot, move, and communicate. I would now tell you that that is flipped on its head. The success of our frontline forces, instead of shoot, move, and communicate is probably communicate, move, and shoot.
Pete Codella (14:33): Interesting. Tell us, you’ve been in Utah for a little over a year. What are your first impressions of living and working in Utah.
Dan Gelston (14:43): At 40-plus years on the east coast, I don’t believe I ever experienced a day in my life without humidity and bugs, and that’s the first thing that hit me and oh my, it is lovely. I’ve gone 14-15 months without a single bug bite and I’m hiking with the kids, biking every other day. The climate really is amazing. If you enjoy four distinct seasons, I’m now convinced, it may be heresy from my east coast brethren, but this is the ideal climate. Certainly the traffic, I can’t go without commenting on that coming from decades in the D.C. area. The traffic here is… I’m sure people who’ve been here for a while are seeing an increase but to me coming from D.C…
Pete Codella (15:28): That’s right, yep…. It’s nothing, right?
Dan Gelston (15:30): …I think one of the top three worst in the country, it is absolutely nothing. I’m driving through the middle of a, I believe a million person metropolitan area and every morning I wonder where all those cars are? In all honesty, that’s fantastic. And it’s really nice being in a patriotic, I mean just being a military aerospace and defense guy, there’s a lot of pride in this state, in the state and the country. My family was here I think the first month or two and we went and checked out Days of ‘47. Well, we just moved out west, let’s go see a rodeo.
Pete Codella (16:09): Yep, a parade, a rodeo, a big celebration.
Dan Gelston (16:12): Yeah, it’s pretty fantastic. And it was neat to see the flags and opening prayer and that esprit de corps if you will was pretty fantastic. Sometimes, you kind of miss that on the east coast.
Pete Codella (16:23): Yeah, for sure. How about doing business in Utah? Do you feel like the environment here is distinct in ways from your experience back east?
Dan Gelston (16:33): Without a doubt, again very positive. I’ve got nothing but positives and again no one is paying me to say this stuff.
Pete Codella (16:39): Well and that’s why we’re talking right now.
Dan Gelston (16:40): Yeah exactly. How do I describe it most succinctly? A state that is focused on business friendliness, business growth, and STEM education. So you’re kind of technical, science, engineering, math education. You need the first, you need the STEM to end up having particularly the business growth that I’m pursuing. You put that together and it’s a powerful combination. I’ll be honest I’ve been working very closely with local, state, and federal government components here up to your congressional delegation. Congressmen [Chris] Stewart, this second district is where my facility sits, and it’s been an excellent experience just having a government relationship that understands it’s a partnership, it’s a two-way street, to help grow in the state, to provide quality employment that means something. I mean there’s a real mission here. We’re doing something very important for not only the state but the country. That’s very exciting and I can’t say I really experienced that in some of the other states I’ve worked in. So to have that business friendly state that’s focused on aerospace and defense and understands the criticality of STEM education from early on to home grow, if you will, the talent base here in Utah. And again, having 80 percent of my workforce come from Utah, that’s pretty important. And we’ve got some tremendous folks from operations to engineers to finance doing some amazing things for the state and country. It brings a bit of a tear to my eye. But you should be very proud, there’s a lot of folks probably working under the radar, maybe not as well known as some of the other businesses here in the state, but we’re one of the largest and doing some pretty incredible things.
Pete Codella (18:35): Yeah, we appreciate that perspective, and as you know the Computer Science for All initiative, you know the governor’s allocated some money, the state legislature, some money for that initiative and STEM. That whole educational piece is very important and part of the economic development efforts for the state, for sure.
Dan Gelston (18:53) Yes, I was proud to play a little part in endorsing that and spending some time on the hill testifying at the importance of that computer science education. It’s a language we all need to learn going forward.
Pete Codella (19:10): So I sat in a room with a number of CEOs for technology companies in Utah and several of them expressed challenges in recruiting kind of senior-level talent to come and live and relocate and work in Utah. From your experience in the past year, what about your experience being, living in Utah surprised you?
Dan Gelston (19:31): Yeah I will admit I’m a convert. I’m one of those you know “coastal elites” if you will, not that I’m very elite, but sitting out on the coast that maybe don’t understand what’s in between. Utah, I’d been here twice before, seen some of the national parks, Zion I remember being mind blown, coming up here quickly seeing Park City, seeing downtown, seeing the temple and thought wow, beautiful, very different from the east coast, beautiful, but I could never quite imagine picking up and moving here. If you’d asked me 16 months ago, “Hey, are you going to spend your next however many years in Utah?” I would have thought you were crazy. But man, I’m glad we did it. We’ve loved where we were living. We’ve got three little girls elementary school age, and a wife of almost 20 years, and I can’t lie, there was a little trepidation at first to leave what we had always known, but man, we’re glad we did it. It’s an incredible experience as I said, I’m a mountain guy, mountains and lakes, I mean the scenery is just stunning and no humidity, no bugs, no traffic, how can you complain? It’s a little different pace of life I think people…
Pete Codella (20:46): So, a little more laid back then the east coast?
Dan Gelston (20:48): Yeah enjoy life a little bit more, I think they’re healthier to be perfectly honest. They get a lot more exercise, they’re outside getting the sun. Typically around D.C. people probably work too many hours and spend too much time in cars and traffic. I feel that whole vitality aspect to it, you get off of a hike with your family at 10-11,000 feet and you really feel alive and then you see the scenery around here, it’s amazing. So you mix that with a great workforce and a lot of pride in the state and what we do in aerospace and defense and I would recommend it to anyone and you can send them my way as an east coast convert. I’ve seen the light.
Pete Codella (21:25): We’ll send them a link to this podcast recording. How’s that?
Dan Gelston (21:27): There you go.
Pete Codella (21:29): Well, anything else you’d like to add before we wrap up?
Dan Gelston (21:32): Yeah, I really appreciate the opportunity to chat with you again. It’s been fantastic working with the Governor’s office, particularly GOED, on these incentives. We’ve got some exciting things going on besides the internal growth. We’re actually building, we broke ground a few months ago on a 400,000 square foot facility for our engineers and new operations. We have the potential for some inorganic growth as well. Harris and L3 Technologies, two of the larger defense contractors in the country, announced that they would be merging this past fall. So we’ve got about 31,000 employees with L3, about 17,000 employees with Harris. Together we’ll be the sixth largest defense contractor in the country. They’re actually billing it as the largest merger of equals in defense department history. So we’re pretty excited about that. I think the capabilities of the combined company, which will be named L3 Harris, will be quite formidable. But, probably most exciting to Utah, between the two companies we have about 400-something locations. So we’re looking at consolidating those locations into centers of excellence and really get some economies of scale and utilization of our talent in specific locations, specific states. We’re thinking probably four to six states would have these centers of excellence. Right now, Utah between the two companies, is the fourth-largest employee base and with the momentum we have from the growth organically in this business here at CS–West, I think we’re a fantastic candidate to be one of those centers of excellence and get even more jobs here relocated to the state. So I’m working with GOED and the state on some incentives to sort of nudge the new company along but we’re hoping to maybe even get close to doubling the size of the business here in the next couple of years. So both organic growth through opportunity homegrown, as well as potential relocation of businesses within [the] L3 Harris umbrella from other states into Utah. So an exciting time to be here, particularly if you’re an engineer give me a ring. We’ve got some good stuff going on.
Pete Codella (23:47): That’s right, and it sounds like with, you know, quality of life, work-life balance, a short commute, all those reasons that you listed, Utah should be high on the list.
Dan Gelston (23:56): Hard to beat, my east coast friends see my Facebook feed and videos of moose, and bumping into mountain goats at 12,000 feet on the top of Bald Mountain, and they’re convinced I’m never coming back. So, it’s good stuff.
Pete Codella (24:12) Well, Dan, thank you. It’s been a pleasure to speak with you today. Dan Gelston, president of L3 Technologies–West, and I’m Pete Codella, communications director at GOED. Thanks for joining us.
Dan Gelston (24:23): Thanks again Pete, I appreciate it.
Conclusion
Thanks for listening to the Business Elevated podcast, a production of the Utah Governor’s Office of Economic Development. Listen to other episodes where you get your podcasts or at business.utah.gov.