Iraq gamble

Two of Chuck Bradley's converted shipping containers are sitting on the ground in Baghdad -- or near Baghdad, or somewhere else in Iraq.

He has no idea exactly where they are, or what they're being used for.

"I'm not about to go over there and check," Bradley said.

The owner of Santa Rosa-based Global Portable Buildings Inc., which takes new cargo containers and converts them into affordable housing, wants to tap into what could be a potential windfall for his upstart business -- the multibillion-dollar rebuilding of Iraq.

But between volatile shipping and finance markets, unstable government and military operations, and the significant threat of kidnappings and ongoing warfare, reaching into the Middle East isn't something to take lightly.

And for many local companies, even those used to doing business overseas or working with U.S. defense contracts, it's just not worth the risk.

At the start of the war in Iraq in 2003, Sonoma County had $24 million in defense contracts, supplying everything from water packs and elbow and kneepads to components used on missiles and helicopters.

Many of those contracts have since faded away as the hottest war zones in Iraq have cooled and the U.S. economy has bounced back, making traditional domestic markets more viable.

For five years, Donal Machine Shop in Petaluma sold the military parts for winches used in search-and-rescue helicopters. But when the company's contract expired in 2004, owner Bob Bergstedt said he didn't renew it, and he has no intention of trying to profit from reconstruction work now.

"It was a very difficult part to make, and the government only wanted to pay so much," Bergstedt said. "It was just a matter of finances."

Santa Rosa's Marmot Mountain has long sold gear to soldiers overseas, and the company still regularly fills orders for sleeping bags, tents and personal gear -- such as undershirts and windbreakers -- that are sent to Iraq.

But the company has no desire to broker a contract for reconstruction work there, said Tom Fritz, vice president of marketing at Marmot.

"Working with the military's not an easy thing. We have pursued it in the past, but you almost have to build a mini-company to deal with the government," Fritz said. "It taxes a company like Marmot that's not set up for it.

"Selling 500 million pairs of gloves would be great," he said. "But the reconstruction in Iraq, working with the military, it's not going to work for us."

Analyzing risks

Beyond the complications of dealing with government contracts, businesses looking into Iraq have to consider both the physical and financial risks. Theft and violent crime are major problems, along with terrorist attacks and warfare. Fraud is prevalent.

But the opportunities are still appealing. The U.S. government has promised more than $18.4 billion in reconstruction funding, mostly to a couple dozen major American companies.

In the Bay Area, at least three companies -- Bechtel Group in San Francisco, Environmental Chemical in Burlingame, and America President Lines in Oakland -- have grabbed lucrative deals to aid reconstruction efforts in Iraq.

Out of harm's way?

That doesn't necessarily mean they have people in Iraq. More often than not, American businesses rely on subcontractors or private partners in Iraq to do business there.

"Our equipment carries supplies to the Persian Gulf and then it's on other ships into Iraq," said Mike Zampa, a spokesman for America President Lines, which has been shipping mostly food supplies to Iraq. "That's a common practice in the shipping industry. I'm not aware that we have people on the ground in Iraq."

Rob Rosen, whose company Remote Satellite Systems sells portable satellite telephone equipment to the military, said he's never sent his Santa Rosa employees to Iraq or other disaster areas, so safety isn't much of a concern. He relies on subcontractors in dangerous areas to deliver and service equipment.

"We get calls from all over the world. We've got long arms," Rosen said. "Do I want to go anywhere? I want to stay close to home and pick up my phone."

Remote Satellite Systems still has government contracts in Iraq, and it also works with nonprofit aid groups and private companies involved with reconstruction. But Rosen said business has fallen off somewhat in Iraq as rebuilding starts and contractors build a more stable telecommunications system.

"There are these windows of opportunity for us, and that's sort of the first push. After a while, the infrastructure starts building up and they don't use the portables as much," Rosen said.

Reconstruction may be exactly the right time for Global Portable Buildings to head to Iraq.

Ellie Walton, director of business development, said she's been approached by two private vendors in Iraq that want to sell the converted cargo containers. Global's first containers were shipped to Iraq last summer, but the company lost track of the vendor and doesn't know what happened to those containers.

"It was in a hot area, in Baghdad," Bradley said. "Now, we have two other agents, and we have a shipping company. It's much safer."

Last week, Walton spoke with a new vendor in Baghdad -- this time a well-established company that is a subcontractor for Bechtel and works closely with a Lebanon-based shipping and trucking firm. The vendor is interested in buying two of Global's converted containers to put on display and try to sell as part of reconstruction efforts.

"I kept trying to call him but his phone was continually busy," Walton said. "But he finally got through to me, and he's great with e-mail."

Miscommunication

Simple communication with companies in Iraq can be challenging, between the time difference and poor infrastructure. Plus, it's difficult to research an overseas vendor and find out if they're the real thing.

Global Portable Buildings also is looking beyond Iraq, Walton said, to other disaster areas -- Pakistan, for example, and the company shipped nine containers to be used as housing in New Orleans after Hurricane Katrina.

The converted containers sell for about $14,000 for an 8-foot-by-40-foot house with windows, doors, insulated walls and a full bathroom.

"In some areas of the world, they provide very sufficient housing," Walton said.

And they can be made bullet-proof.

You can reach Staff Writer Erin Allday at 521-5494 or eallday@pressdemocrat.com.