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Rocky Mountain News, "WILD RIDE Turbulent ups, downs drive careers, lives in Waterton Canyon"

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Copyright 1996 Denver Publishing Company
Rocky Mountain News (Denver, CO)

May 27, 1996, Monday

SECTION: SPECIAL PULLOUT; Ed. F; Pg. 1S
LENGTH: 3523 words
HEADLINE: WILD RIDE Turbulent ups, downs drive careers, lives in Waterton Canyon
BYLINE: Rebecca Cantwell ; Joseph B. Verrengia; Rocky Mountain News Staff Writers

BODY:
Walt Caughran stands inside the tail of a Titan II rocket.

Beside him is his son Dan.

The Titan and the two men span almost the whole 40-year history of rocket-making in Colorado.

At the height of the Cold War, Walt helped turn the Titan into a missile designed to unleash a nuclear warhead on the Soviet Union.

Today, the same rocket has been plucked from its underground silo and overhauled to launch a government satellite.

Awaiting its turn to fly, the giant silver bird sits silently in the new rocket factory Dan manages.

The careers both men built at a tightly guarded factory in a majestic red-rock canyon near Denver were shaped by the same powerful forces that forever changed the course of world affairs, technology and industry.

Father and son, propelled by hard work, loyalty and a few timely breaks, thrived.

But for others in the canyon, dreams died. 1. AN ECONOMIC ENGINE

The plant in Waterton Canyon that nurtured the Caughrans for so many years belongs to Lockheed Martin, the world's largest military and aerospace conglomerate. Its sales last year were $ 22.85 billion - 2 1/2 times Colorado's state budget.

First as the Martin Co., then Martin Marietta, now Lockheed Martin, the corporation has helped shape metro Denver since 1956, when it built a top- secret rocket factory at the height of the Cold War.

A resurgence in production and employment there has helped make Colorado the nation's biggest rocket-maker.

Martin sparked the development of the southwestern suburbs - subdivisions, schools, strip malls, car dealerships, churches, restaurants and roads.

When whopping Pentagon and NASA contracts flowed Martin's way, the company hired engineers, machinists and secretaries by the thousands, and great swaths of Jefferson and Arapahoe counties prospered.

And yet, despite the huge payroll, much of metro Denver knew little about the secluded, high-security plant at the foot of Wadsworth Boulevard. Workers were trained to say little about their jobs, even if what they actually did wasn't particularly hush-hush.

''It's been pounded into us - don't talk about your job,'' said Ted Mossman, a 36-year Martin employee. ''If I go somewhere and someone asks, I'll always know when to zip it up.''

For most of its history, Martin's Waterton plant has been overwhelmingly dependent on the federal government. Contracts for secret programs might be abruptly canceled or awarded to competitors. Decisions from Washington that no one in Colorado could control turned lives inside out.

But it would be hard to imagine better times for defense contractors than Ronald Reagan's two terms as president, which began in 1981. The man who branded the Soviet Union ''the evil empire'' set off the biggest peacetime military buildup in U.S. history.

His aim was Star Wars - a dazzling system that would intercept and destroy incoming Soviet missiles in space.

By the mid-1980s, hundreds of billions of dollars a year poured into defense contractors - money sometimes beyond corporations' ability to spend and Congress' ability to oversee.

These were heady days in Waterton Canyon.

MX missiles, ridiculed for a series of bizarre deployment schemes, were partially assembled in Waterton Canyon. Workers assembled instruments for the ''midgetman'' ICBM, helped develop a space laser weapon called Zenith Star and worked on a Star Wars program known as Brilliant Pebbles.

Reagan himself made two visits, in 1984 and 1987.

The president told the weapons-builders how vital they were. 2: FATHER AND SON

The workers in the factory's four decades of production have been closely tied to America's space and nuclear defense programs. They lived through giddy moments of achievement and painful spasms of despair:

• The early days of the Titan, first launched in 1959, when test missiles blew up on launch pads and the Soviets jumped ahead in the race to the moon.
• American triumphs of the '60s, culminating in Neil Armstrong's historic step onto the lunar surface.
• Successful missions with Martin-built spacecraft and components, including the Skylab space station, planetary probes to Mars and Venus, and the Manned Maneuvering Unit enabling astronauts to walk freely in space.
• The 1986 Challenger explosion, which killed seven astronauts and paralyzed the U.S. space program.

Walt Caughran, now 65 and five years into retirement, lived it all.

He came to Waterton Canyon as an electrical fabricator in 1958 straight from the Air Force. The first day, he stared, mouth agape, at the mammoth parts being readied for Titan intercontinental ballistic missiles.

''The Titan was my life,'' he said. ''Titan I, II, III, IV. That was mine.''

He was working on one at Aurora's Buckley Air National Guard Base during the Cuban missile crisis when a loud horn sounded a red alert.

Caughran (CARR-un) was ordered to hurry through tunnels to a Quonset hut while the military people readied the nuclear-tipped missile for possible launch.

A couple of years later, he was sent to inspect missiles in silos near Mountain Home Air Force Base, Idaho.

He was given a code word at base headquarters every day. One morning he mistakenly blurted the previous day's.

Suddenly, he and his colleagues were shoved to the ground, spread-eagled. A helicopter landed, and soldiers with guns jumped out. It took three hours of interrogation and phone calls for the security men to release them.

The constant traveling took its toll.

When he returned home after one trip, Caughran heard Dan, 3, call his playmates over.

''See,'' the son said, ''I do, too, have a daddy!''

But as Dan grew, the bond with his rocket-man dad tightened.

Dan remembers Walt taking a phone call from work one day and watching the color drain from his father's face.

It was 1965. Rather than lose his job in one of Waterton's periodic downturns, Walt accepted a demotion from management to a union job drilling holes, installing rivets and soldering connections.

Walt and Joan Caughran had just bought a red brick ranch home in Lakewood for their growing family, and Walt figured it might be time to switch careers. He moonlighted doing furniture reupholstery.

But in the end, Walt had too much Martin in his blood. He worked his way back up the ladder, becoming general foreman for most of the factory.

Walt took Dan to an open house. Martin was building key parts of Skylab, and Dan got to crawl inside the space station's docking adapter.

''I was thinking about something that was going to be in space, that would have to operate in a place we couldn't even think about,'' Dan would recall. ''It was going to travel so far away.''

Dan was hooked on space. He was 10. 3: 'RESPECT THE PEOPLE'

Despite his fascination with space, Dan Caughran took a circuitous path into rocketry.

He dropped out of the University of Southern Colorado after two years, then tried a factory job making cardboard shipping containers.

Hunks of corrugated cardboard flying off a machine sliced his hands every day. He was a catcher and a stacker, and if he couldn't keep up with the machine, the other guys got angry.

Dan started looking for something better.

''I'm not going to do anything for you,'' his father told him, ''but they're hiring at Martin.''

A foreman who respected Walt Caughran honored the father by hiring the son.

Walt bought Dan a box of Craftsman tools for his new job as an installation mechanic on the MX missile.

Within a year, Dan was moving into management. Co-workers kept mentioning how much they'd learned from his dad.

Now 35, Dan Caughran shares a number of traits with his father: a hawk- like nose, intense gaze, a mixture of humor and compassion. In his crisply tailored L.A. Law business suits, Dan looks very much the rising young corporate executive.

In the early days, he took to asking Walt lots of questions, especially about handling people.

''I hope I relayed to him to respect the people, respect what they do, honor them when they do something good,'' Walt said.

Walt and Dan Caughran are Martin people who give true-blue loyalty a good name. They came through for the company, and the company came through for them. 4: 'WHY BE LOYAL?'

It didn't work out that way for Dick Sebben.

He'd gone to work for Martin Marietta in 1978 and had worked his way up as a buyer. His last job involved getting parts delivered on schedule for the Titan IVs being built at Waterton Canyon.

One Friday in April 1992, when he was 57, his world unraveled.

His boss called him in, laid him off and told him to clean out his desk.

''At first I was just heartbroken,'' Sebben said. ''When you work for companies all your life and do everything you're supposed to do and you're loyal and get laid off, you wonder what's going on.''

Sebben was among roughly 1 million Americans to pay a painful, personal price for the end of the Cold War.

In the struggle's tumultuous aftermath, democracy flowered in Eastern Europe, but American defense contractors, their weapons of war no longer in hot demand, hemorrhaged jobs.

The spin doctors called it ''downsizing,'' ''re-engineering,'' ''rightsizing.''

The dislocation devastated the economy in southern California, Connecticut and other states.

Thirty thousand Coloradans lost their jobs through layoffs and base closures, including the demise of Lowry Air Force Base. Payrolls of more than $ 1 billion a year vanished. Another billion dollars in annual wages will be gone by the end of the decade.

Waterton Canyon took a body blow. Martin's Colorado employment plummeted from nearly 15,000 in 1989 to about 6,000 in 1993.

The company set up an outplacement center in 1991. Of the more than 3, 500 laid-off workers who sought help there, 89% have found work.

Many found similar jobs, but a few made radical changes. A woman became a veterinarian's assistant. A couple opened a Subway sandwich shop, a father and son a Mailboxes Inc.

Not everyone was so fortunate.

Dick Sebben went from making $ 60,000 a year to stacking boxes at Home Base for $ 7 an hour or less.

''I'm still sending out resumes, looking for any kind of procurement job, '' said Sebben, 60. ''I don't even get a call back in many cases.''

People keep telling him he'll have a hard time finding a permanent job because of his age.

Age is the operative word for Sebben and many other former Martin workers. They believe the corporation used downsizing as an excuse to reverse the graying of its workforce. They've filed a federal lawsuit claiming age discrimination on behalf of 3,100 workers over age 40 who were laid off from 1990 to 1993. Their lawyers believe it is the largest such case in the United States.

The corporation disputes allegations of age discrimination. The case is set to go to trial next year and, with appeals, is likely to drag on until the next century.

Sebben's five children are bitter. They have little corporate loyalty and are constantly looking for better jobs.

Says their father: ''They keep thinking their dad worked for Martin, worked his way up and what did they do? Laid him off.

''Why be loyal and work all kinds of hours if it's not going to pay in the long run?'' 5: BUYING THE FUTURE

Even as he downsized, Denver native Norm Augustine moved boldly to seize the future.

For America's giant defense contractors, it was gobble or be gobbled. Augustine was ravenous.

A graduate of Denver East High School, Augustine had run the Waterton Canyon rocket factory in the glory days from 1982 to 1985. Now, atop Martin Marietta's corporate ladder, Augustine saw opportunity where other military conglomerates saw ruin.

First, he went after General Electric's aerospace division, which was bigger than Martin. He and his GE counterpart sketched the essentials of the $ 3 billion deal on a napkin at the Homestead resort in Warm Springs, Va., in 1992.

The acquisition gave Martin a huge satellite-manufacturing ability. Now the company could build satellites to launch on its own rockets.

Hardly had the dust settled when Augustine bought General Dynamics' San Diego-based space systems division: the Atlas rocket-builders.

It was this move that sent Waterton Canyon's roller-coaster fortunes hurtling upward again.

But for Augustine, it was just one move in a much bigger chess game.

He didn't win every round. He failed in an effort to take over Grumman when rival Northrop outbid him.

The setback was temporary - a mere prelude to the biggest deal of all.

One Saturday in 1994, Augustine's phone rang. Dan Tellep, chief executive officer of Lockheed, the nation's second-largest defense contractor, wondered whether Martin-Marietta, No. 4, was interested in a mega-merger.

Code names and cloak-and-dagger moves characterized the secret negotiations that followed. Tellep called himself Mr. Lewis. Augustine was Mr. Kent.

Lockheed Martin, the world's largest aerospace company, was born March 15, 1995. People who'd spent their whole careers as rivals were suddenly cohorts. It was almost as if Ford had started building Chryslers.

The merger will eliminate at least 12,000 jobs. Plants in Pennsylvania, New Jersey and elsewhere will close.

Some people in Waterton Canyon have now worked for three corporations since 1994.

Tellep stayed as CEO until the end of last year. On Jan. 1, Augustine succeeded him.

Exactly a week later, Lockheed Martin announced acquisition of most of defense-electronics maker Loral. 6: TRAGEDY AND REBIRTH

Norm Augustine's decision to buy the Atlas rocket program in San Diego would mean a boon for Waterton Canyon.

The Atlas, the venerable rocket that carried John Glenn into orbit, was moving to Denver.

Rocket-making had gone into severe decline 15 years earlier.

To persuade Congress to finance the space shuttle, NASA promised it would carry so many missions that it would pay for itself. To make sure, President Jimmy Carter decreed that virtually all satellites be launched from the shuttle.

Martin Marietta kept an Air Force contract to build a small number of Titans as a backup, but unmanned launches suddenly were virtually obsolete.

All that changed in the chilly morning air above Cape Canaveral on Jan. 28, 1986. Seven astronauts, including schoolteacher Christa McAuliffe, died when the shuttle Challenger exploded.

Relying on the shuttle to launch satellites suddenly seemed foolish policy.

America's space program went into the deep freeze. The next shuttle wouldn't fly until 1988.

NASA decided that the shuttle would carry only missions requiring humans. Unmanned launches gained new life.

In the post-Challenger era, General Dynamics' Atlas rocket-builders convinced their bosses that commercial satellites could replace much of the shrinking military and NASA business. They spent $ 800 million on the gamble to commercialize Atlas.

But in the treacherous waters of defense downsizing, General Dynamics ultimately took the opposite strategy from Norm Augustine's. Instead of buying, it sold.

Martin had its wallet open.

The two companies already shared a key program: General Dynamics built the Centaur second-stage booster for Martin's Titan IV rocket.

The tie helped push Martin's purchase of Dynamics' Atlas factory.

Said Bob Bourne, Titan launch manager at the Cape, ''We didn't want Titan Centaurs built by Toro Lawn Mowers.'' 7: CALIFORNIA TO COLORADO

Pink slips were raining on Waterton Canyon.

As the 1990s dawned, Dan Caughran wondered whether he'd be sacked.

Many of his colleagues had suffered that grim fate.

For thousands of Martin Marietta workers, the painfully ironic rewards for winning the Cold War and defeating the Soviet Union were downsizing and outplacement counseling.

But Caughran would get a chance at bigger and better things.

Martin was buying the Atlas rocket line from General Dynamics in San Diego and moving production to Denver.

The future no longer rested totally on fat Pentagon contracts. For the next decade, plenty of money - and jobs - would be at stake in building rockets to launch commercial satellites.

Caughran was one of the first Waterton Canyon people Martin sent to San Diego to investigate whether buying General Dynamics made sense.

The San Diego assignment led to Caughran's new job as manager of Waterton's Final Assembly Building, the factory built to put Atlas rockets together.

Martin spent $ 22 million converting an old parts warehouse into a building the size of five football fields.

Then came the move. It took 1,051 moving vans.

Corporate cultures were melded - General Dynamics' entrepreneurial hustle with Martin's secretive and hierarchical military style. Many top Atlas managers from San Diego landed high-level jobs at Waterton - a rarity in business takeovers.

Momentum never slowed.

Lockheed Martin launched a record 12 Atlases in 1995.

On April 3, Caughran celebrated a milestone - the launch of AC-122, the first Atlas-Centaur completely assembled in Denver. It marked a historic turning point for a factory that had focused almost entirely on government work during its 40-year history.

''With the new vehicle,'' Caughran explained, ''we're in control of our destiny because it's commercial. Instead of looking at the government with the cutbacks and seeing them as the bad guys, we're looking at the French and Chinese - that's the competition.

''We have to be better rocket-builders and better launchers than they are.'' 8: 'NOT JUST A JOB'

Dan Caughran has little time to reflect on the vast changes he and his father have seen.

But he thinks about the young people who are already enjoying the benefits of space exploration.

There's Isaac, his 6-year-old son, who builds model rockets and wants to carry on the Caughran legacy by going to work one day in Waterton Canyon.

And there are the teen-agers Dan sees trouping through the malls, cell phones at the ready.

''They take it for granted,'' he says. ''They've grown up with all this high-tech around them.

''It takes a lot of hard work to do what we do to build the rockets, to launch them, to give them their DirecTVs, their cellular phones. . . .

''For them, it's almost routine. . . . The unfortunate thing is, the current generation is complacent. They don't understand it. I hope we can get them to carry on and understand the importance of it and that it's not just a job.''

That's one of the reasons Dan likes giving tours at the rocket factory. 9: LESS YIELDS MORE

True to the spirit of post-Cold War economics, Caughran and his colleagues have done more with less, and they've done it faster.

The Waterton factory has 250 people working at the same production rate as 400 people in San Diego.

As Dan and the rest of the company started implementing the new buzzwords of team-building, Walt, his bushy eyebrows tinged with gray, started to think about retiring after 32 years.

''It was a new era and a new way of doing business,'' he said. ''I was ready for a change. I realized a long time had passed since I soldered my first connector.''

Looking at Dan, he said, ''I decided to hand him the baton.''

TUESDAY: Readying an Atlas for launch. INFOBOX (1) ONLINE Rockets in the Rockies is on the Rocky Mountain News Online, too. You can see video of rocket blastoffs and hear the words of Lockheed Martin and NASA executives. http://www.denver-rmn.com INFOBOX (2) LOCKHEED MARTIN ASTRONAUTICS EMPLOYMENT Includes Waterton Canyon, Deer Creek Canyon and other Colorado facilities where rockets and space hardware are built. 1956 . . . . . 2,546 '60 . . . . 13,915 '76 . . . . . 3,354 '88 . . . . 11,822 '95 . . . . . 6,624 Source: Lockheed Martin Astronautics INFOBOX (3) DEFENSE INDUSTRY FEEDING FRENZY Corporate consolidations created Lockheed Martin. LOCKHEED . . . GENERAL DYNAMICS AIRCRAFT Bought 1993, $ 1.5 billion MARTIN MARIETTA . . . GENERAL ELECTRIC AEROSPACE Bought 1993, $ 3.08 billion . . . GENERAL DYNAMICS SPACE SYSTEMS Bought 1994, $ 209 million LORAL . . . FORD AEROSPACE Bought 1990, $ 715 million . . . LTV MISSILES Bought 1992, $ 244 million . . . IBM FEDERAL SYSTEMS Bought 1994, $ 1.6 billion . . . UNISYS Bought 1995, $ 8.62 million LOCKHEED MARTIN 1995 merger, $ 10 billion . . . LORAL 1996 partial purchase, $ 9.1 billion . . . LOCKHEED MARTIN $ 30 billion projected 1996 sales INFOBOX (4) TO VISIT THE ROCKET FACTORY

Lockheed Martin Astronautics conducts a limited number of tours for students.

They will see Titan rockets in various stages of production and the Final Assembly Building, where Atlas rockets are assembled.

Tours are limited to students who are at least 12 years old and are studying math, science or astronomy.

Tours may be arranged for classes of up to 25 by sending a letter three months in advance to Tours, Lockheed Martin Astronautics, P.O. Box 179, Denver 80201.