PLYMOUTH — A growing telecommunications business founded in 1986 to install hardware for Ma Bell’s long distance competitors is growing into new industries like defense and surveillance.

But if president David G. O’Reilly hadn’t been laid off from his job on a Detroit River tugboat back in the 1970s, Capital Communications might not even exist.

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O’Reilly is a Detroit native who got a job on tugboats after high school. But when the late ’70s gas crunch hit, “we weren’t pushing as much oil through the river as we had in previous years, and I got laid off — married, with one child, and another on the way.”

O’Reilly said he then decided to take an eight-week course in telecommunications and went to work installing phone switching equipment for his brother’s company, Lexitel Corp. He spent six and a half years there, working himself up to an engineering position.

Then he noticed that all the equipment was installed by subcontract labor. “I thought, you know what, I can do that,” O’Reilly said. “I contacted the manufacturer and they said, ‘You bet, get yourself organized, we need people to install this equipment.'”

And so Capital was born in 1986. Later, the company would shift most of its business to Michigan Bell, which became Ameritech, then SBC, and today is AT&T.

The company has had its ups and downs — growing to 165 employees in the Y2K boom. When the bubble burst in 2001, O’Reilly said, the company’s business fell 75 percent. It’s since recovered and the company now has 64 employees.

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The company also has current job openings in installation, software engineering, and electrical and power systems engineering.

Most recently, Capital is partnering with Ann Arbor-based Pixel Velocity, a spinout of Ann Arbor’s longtime data analysis institution, the Environmental Research Institute of Michigan. Pixel Velocity provides advanced imaging processing and engineering services to the defense and other industries, including intrusion and risk detection monitoring systems.

With Pixel Velocity, Capital Communications is installing huge, multi-camera monitoring systems for critical infrastructure for the government, aviation and energy. Bill Knapp, director of business development at Capital, said the perimeter systems at stadiums and TSA security checkpoints have already paid for themselves through debunking claims of loss or injury and force protection for the department of defense.

Capital is also working on surveillance system projects in the United Kingdom, Middle East and West Africa.

O’Reilly said the company’s sales nearly doubled from $5 million to more than $9 million 2010. Sales dropped off about 10 percent in 2011 and are holding about even this year, he said.

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