Aeronautics in The SLC States: Cleared For Takeoff

SOUTHERN LEGIslATIVE CONFERENcE
OF
A REGIONAL RESOURCE FROM THE SLC

Sujit M. CanagaRetna
Fiscal Policy Manager Southern Legislative Conference February 2014
CLEARED FOR TAKEOFF
AERONAUTICS IN THE SLC STATES:
Copyright February 2014
THE COUNcIl OF STATE GOVERNMENTs
generation ago, a number of foreign automakers began establishing manufacturing operations in the South, in states represented by The Council of State Governments (CSG) Southern Office, the Southern Legislative Conference (SLC). Until the last few decades of the 100-year history of automobile manufacturing in the United States, the industry was heavily concentrated in the states surrounding the Great Lakes and across the border in Ontario, Canada. Leading the charge to the South was Nissan (announcing a facility in Smyrna, Tennessee, in April 1980), followed by Toyota (publicizing a facility in Georgetown, Kentucky, in December 1985). From these two foreign automakers, The Drive to Move South* gathered steady speed and, by 2013, there were a dozen or more automobile manufacturers Mercedes in Alabama, BMW in South Carolina, Nissan in Mississippi, Kia in Georgia and Volkswagen in Tennessee,
*
Introduction
to name a fewoperating thriving assembly operations, generating billions of dollars in economic impact and employing thousands of workers. In a move that parallels this important automotive industry trend, economic analysts now are seeing another development: the increasing number of aeronautics companies that are locating, relocating or expanding their manufacturing operations in the South, a trend particularly discernible in the aftermath of the Great Recession. Even though the Souths association with the aeronautics industry dates back to December 1903, when Orville and Wilbur Wright launched their box kite biplane (a contraption largely constructed at their bicycle shop in Dayton, Ohio) from a windy outcrop in Kitty Hawk, North Carolina,1 in the ensuing century or so, the American aeronautics industrys passenger jet manufacturing operations were largely confined to California (Los Angeles, Orange and San Diego Counties), Kansas (Wichita) and Washington (Seattle). However, this localized concentration has gone through and is continuing to experience some major transformations. For instance, at the peak of the Cold War, 15 of the 25 largest aerospace companies in the United States were located in Southern California; the number in California is now significantly smaller due to greater concentration in the industrythrough a spate of mergers and consolidations that occurred in the 1990salong
For a decade, the SLC has focused extensively on the economic impact of the auto industry in the South. In 2003, the SLC released a report entitled The Drive to Move South: The Economic Impact of the Auto Industry in the Southern Legislative Conference States. Since that time, the SLC has featured the topic in subsequent publications, presentations to legislative bodies and other organizations, media interviews and as a discussion topic at SLC annual meetings. For more information on the SLCs focus on the automotive industry, please see http://www.slcatlanta.org/Publications/index.php?topic=8.
Source: Cover photo courtesy of flickr user Nic Adler via Creative Commons License
SERVING THE SOUTH
THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTS

PO Box 98129 | Atlanta, Georgia 30359 ph: 404/633-1866 | fx: 404/633-4896 | www.slcatlanta.org
Table of Contents
Introduction.........................................................................................1 Why the Move?................................................................................. 4
Southern Workforce Development Programs.................................4 Economies of Scale and Clustering..........................................................4 Tax Incentives.....................................................................................................5 Additional Factors.............................................................................................5 A Word on Organization..............................................................................3
Selected Commercial Aircraft Manufacturers................16
Industry Statistics.............................................................................6
Table 1: Annual Rate of Exports...........................................................6 Exports.....................................................................................................................6 Table 2: State Aerospace Exports..........................................................7 Private Investment............................................................................................8 Table 3: Private Fixed Investment.......................................................8 Figure 1: Private Fixed Investment.................................................. 10 Manufacturing Establishments.................................................................8 Table 4: Aerospace Manufacturing Establishments...................9 Employment...................................................................................................... 10 Table 5: Aerospace Manufacturing Employees......................... 11 Table 6: Top 10 States by Aerospace Job Growth..................... 12
Aeronautic Developments in Selected SLC States........28
Airbus.................................................................................................................... 16 Boeing.................................................................................................................... 17 Gulfstream.......................................................................................................... 20 Spirit AeroSystems......................................................................................... 21 Honda Aircraft Company.......................................................................... 22 GE Aviation....................................................................................................... 23 North Carolina............................................................................................. 23 Mississippi...................................................................................................... 23 UTC Aerospace Systems............................................................................. 24 Embraer................................................................................................................ 24 Melbourne...................................................................................................... 25 Jacksonville.................................................................................................... 25 Dassault Falcon................................................................................................ 25 Rolls-Royce........................................................................................................ 26 Virginia............................................................................................................ 27 Mississippi...................................................................................................... 27 Alabama................................................................................................................ 28 Arkansas............................................................................................................... 29 Florida................................................................................................................... 29 Figure 2: Floridas Aviation & Aerospace Cluster..................... 30 Georgia.................................................................................................................. 31 Kentucky............................................................................................................. 32 Mississippi........................................................................................................... 32 Missouri............................................................................................................... 33 Texas...................................................................................................................... 33
Workforce Development...........................................................13
Alabama................................................................................................................ 14 Robotic Technology Park Program................................................. 14 Missouri............................................................................................................... 14 South Carolina.................................................................................................. 14 SC Manufacturers Alliance 2013 Legislative Agenda............. 15 Tennessee............................................................................................................ 15
Conclusion..........................................................................................34 Endnotes..............................................................................................36
with closures and relocations to other parts of the United States.2 Similarly, Boeing had a decades-long manufacturing presence in Wichita, Kansas; however, in January 2012, Boeing announced that it would shutter its large Wichita complex and move production to Oklahoma and Texas, both SLC states.3 Also, in Washington, in early January 2014, Boeing workers, in the narrowest of margins (51 percent to 49 percent), approved an eight-year contract extension with the company that assured production of Boeings new 777X aircraft in the Puget Sound area.4 (The current 777 is a long-range, twin-aisle aircraft that carries 365 passengers; the new 777X would be one-fifth more fuelefficient and carry 400 passengers.) In November 2013, Boeing workers had rejected a similar contract with the company on the grounds that it included a pension freeze, increased healthcare costs and other cutbacks. However, Boeing workers shifted their stance, calling for a second vote on the issue, when Boeing solicited offers from other states to build the new 777X, a development that resulted in some 22 states expressing interest in hosting the multibillion dollar project. The real danger that Boeing would
have relocated the manufacture of this airplane to another state, potentially costing the Puget Sound area more than 10,000 jobs, triggered the second vote by Boeing workers. Prior to the first vote by Boeing workers, in an effort to woo Boeing and ensure the production of the plane in the area, the Washington Legislature approved a $9.7 billion multi-decade (through 2040) incentive package for the company. Bolstered by the incentive package provided by the Washington Legislature and the second vote by Boeing workers supporting a new contract, Boeing confirmed that the final assembly of the planned 777X will occur in the Puget Sound area. The company also indicated that it will not be hit by any machinist strikes through 2024. The fact that Boeing was serious about considering locations other than the Puget Sound area to manufacture the new 777X was another indication that the locus
In 2009, amidst much fanfare, Boeing announced the opening of its first Southern manufacturing facility in Charleston, South Carolina, geared toward building the 787 Dreamliner aircraft. South Carolina, along with nearly two dozen states, including California, Utah, Texas, Missouri, Alabama, Georgia, Arizona and North Carolina, expressed strong interest in being the site for the new 777X Boeing production facility.
2 aeroNaUtIcS IN tHe Slc StateS: cleared for takeoff
A Word on Organization
In terms of the organizational structure, this Regional Resource is broken into five sections. Section one explores some of the factors prompting aircraft manufacturers -large, medium and small -- to consider and, in many instances, follow through on plans to locate to the SLC region.Section two investigates the fiscal health of the aeronautics sector and its role in Southern state economies (and, largely, for all 50 states) by probing a range of statistical data, including figures on production or output (represented by exports), investment in equipment, and employment. Section three details Southern state efforts to expand their workforce development programs as a specific response to the technologically proficient workers required to perform the advanced manufacturing work at these aeronautics companies. The final two sections provide information on selected commercial aircraft manufacturers that have either recently set up manufacturing operations in the SLC states or are in the process of expanding ongoing operations and selected aeronautics topics from around the SLC region.
Boeing 787 flight test. Photo courtesy of Boeing MediaRoom.
of Americas aeronautics center was shifting from former strongholds like Washington. In light of these recent events, industry analysts are honing in on a critical, emerging trend: the movement by many aeronautics companies to relocate their assembly and manufacturing operations away from the three states that previously dominated the sector to multiple locations in the South. For policymakers in the South, the potential to capture a portion of the burgeoning aeronautics/aerospace sector is a huge opportunity given the enormous economic opportunities at stake. Consequently, Southern policymakers have moved with great alacrity to ensure that their particular state remains a frontrunner in securing the commitment of these aeronautics companies looking to relocate. A prime example is the emergency special legislative session that was called in Missouri in early December 2013 so that Governor Jay Nixon and members of the General Assembly could debate and reach consensus on a $150 million annual economic incentive package geared specifically toward attracting Boeing and the production of the 777X to the state.
Despite the colossal challenges faced by Americas manufacturing sector in recent decades, the aeronautics sector has proven to be one of the most resourceful and resilient on the contemporary economic scene. In fact, reports indicate that even though U.S. manufacturing employment shrank by 22 percent between 2002 and 2012, the aeronautics/aerospace sector grew 7 percent over the same period. Experts maintain that there are some 500,000 workers directly employed in aerospace manufacturing.5 Moreover, industry experts forecast that the aeronautics sector will experience substantial growth in coming years. For instance, Boeing projects demand for nearly 32,000 new aircraft by 2031; given that presently there are fewer than 20,000 aircraft in service, worldwide, the need to manufacture fleets of new planes remains tremendous.6 Similarly, Airbus projects demand for 19,200 new jets of all types, amounting to $1.4 trillion, by 2030.7 As a result, policymakers in a number of SLC states have worked arduously to court an increasing number of aeronautics companies, ranging from industry titans such as Boeing and Airbus to smaller operations, such as Honda Aircraft and SpiritAeroSystems, to myriad parts suppliers such as Adex Machining Technologies and GKN Aerospace, to their locales.
Boeing facility, but Missouri was the only statealong with Washingtonthat convened a special session in December 2013 to craft an incentive package for Boeing. However, as mentioned, Boeing workers conducted a second vote and agreed to terms laid out by Boeing, a fact that resulted in Boeing confirming that it would carry out final assembly of the new 777X in the Puget Sound area.
The Missouri special session was in response to the November 2013 failed talks between Boeing union workers and Boeing in Washington over manufacturing the 777X aircraft in the Puget Sound area and Boeings indication that it would consider alternate locations (both in the United States and overseas) for the project. A number of other states also expressed great interest in hosting the new
aeroNaUtIcS IN tHe Slc StateS: cleared for takeoff 3
WhY the MoVe?

Honda Aircraft Company campus at Piedmont Triad International Airport, Greensboro, North Carolina. Photo courtesy of Honda Aircraft Company.
here is a definitive trend in progress when, in the space of less than a decade, Boeing sets up a multibillion dollar assembly operation in Charleston, South Carolina; Airbus announces its first American manufacturing facility in Mobile, Alabama, designed to manufacture the A319, A320 and A321 aircraft; Gulfstream publicizes a $500-million, seven-year expansion of its Savannah, Georgia, facility; North Carolina boasts a burgeoning aeronautics cluster with SpiritAeroSystems (the worlds largest independent supplier of commercial airplane assemblies and components) opening a manufacturing facility in Lenoir County, Honda Aircraft expands its facilities and land usage in Guilford County and GE Aviation enlarges its assembly plant in Durham County; Virginia advertises that Rolls-Royce, the famed global power systems company, launched a new advanced manufacturing facility in Prince George County; Dassault Falcon Jets increases the size of its completion center in Little Rock, Arkansas, the second such expansion in five years; and Embrarer, the Brazilian aerospace conglomerate that produces commercial, military, and executive aircraft and provides aeronautical services, expands its Melbourne, Florida, operation to manufacture the companys Legacy 450 and 500 planes. Economic development and aeronautics experts tracking the migration of these aeronautics companies to the South highlight a number of factors propelling this movement. Interestingly, several circumstances that drove foreign automakers to locate in the South also loom large when probing the location decisions influencing the aeronautics companies.
the aeronautics companies with their staffing requirements. However, modern production technologies, training and better education have narrowed the gap with other sectors, prompting bids from communities that aviation firms overlooked until recently.8 Further, Southern states have taken aggressive steps to design workforce development programs in aeronautics and aviation to promote themselves as viable manufacturing options to the industry. For instance, the Alabama Industrial Development Training program (AIDT) runs aviation-industry-specific facilities at the Robotic Technology Park in Tanner, Alabama.9 Among other benefits, the facility provides no-cost training in the fields of automation and robotics for workers to be employed in aeronautics companies such as Airbus. According to Airbus Americas Chairman Allan McArtor, the companys decision to locate its first North American manufacturing facility in Mobile was influenced by the workforce.10
Economies of Scale and Clustering

Experts point to the economies of scale and cascade of additional benefits created by the cluster effect, with the growing number of aeronautics plants and hundreds of parts suppliers in close proximity to each other, as an impetus for the growth of the industry in the South. Researchers such as Harvard Universitys Michael E. Porter have carried out extensive analysis on the cluster effect, i.e., the positive spillovers across complementary economic activities providing an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the size and strength (relative presence) of related economic sectors.11 Given the fact that the aeronautics industry is one of the largest high-technology employers in advanced countries, other researchers have assessed the specific role of aerospace clusters and their potential for local and global knowledge spillovers.12 According to this research, while the aerospace cluster demonstrates a number of industryspecific characteristics when compared with automobile, biotechnology and information technology regional innovation systems, one prominent, overlapping feature they all share is the trend of large firms dominating the cluster and representing a magnet for suppliers to locate in the vicinity. The example of Boeing in South Carolina supports this trend, with the aeronautics giant serving as a magnet
Southern Workforce Development Programs

In prior decades, the aeronautics industry was considered uniquely complex and technically rigorous, a situation that demanded a steady stream of engineers and technicians to staff the positions. At the time, California, Kansas and Washington had educational institutions that provided
The section on the factors influencing the aeronautics industry to locate and expand in the South draws on parallels from the automotive sector as contained in CanagaRetna, Sujit M., Paving the Road to Prosperity: Auto Industry in the South Faring Well in Contracting National Economy, State News, The Council of State Governments, August 2008.
[Airbus] was encouraged by the auto industrys success in Alabama because its manufacturing aspect is a trained skill similar to that of aircraft assembly. - Allan McArtor, Chairman, Airbus Americas
2012, when Airbus announced its $600 million assembly plant in Mobile, Alabama, the state indicated it would provide $125 million, and local governments would provide an additional $33.6 million, for a total incentive package of nearly $159 million.18
to attract local suppliers. Specifically, in 2012, a few years after opening its South Carolina location, Boeing worked with 345 suppliers and vendors in the state.13 One such company is Phoenix, located in Bamberg, South Carolina. According to Phoenix President Robert Hurst, the companys tie to Boeing is through General Electric, which makes the GEnx engine, one of two engines that are used to power the 787 Dreamliner. Another such supplier company is Adex Machining Technologies, located in Greenville, South Carolina, which manufactures precision machined components for aerospace, defense and energy industries. Adex, which has 50 employees, is a certified Boeing vendor and has been selected for Boeings mentor protg program, which places the company on the fast track to become a first-tier supplier to Boeing, a certification that could advance the company to new heights.14 A similar case can be made with the supplier network that has begun setting up operations in the wake of Airbus decision to locate its first North American manufacturing facility in Mobile, Alabama. A short while after the July 2012 Airbus announcement, Safran Engineering Services (a unit within the French aerospace conglomerate, Safran Group) indicated that it was establishing an engineering supporting facility, also in Mobile, creating up to 50 jobs to serve as a supplier to Airbus.15 In 2003, St. Louis, Missouri-based LMI Aerospace (a leading supplier of structural components, assemblies and kits to the aerospace industry) opened a plant in Savannah, Georgia, to service Gulfstream Aerospace, also based in Savannah.16 LMI Aerospaces 161,000-squarefoot facility, as of July 2013, after an acquisition and an expansion, has 155 employees.
Additional Factors
Companies also are considering a number of additional advantages of the South during the site selection process: The ability to construct new manufacturing facilities incorporating all the latest technologies more efficiently and effectively at a Southern location, as opposed to reconfiguring older assembly plants in the states that previously dominated the aeronautics sector; The low or nonexistent rates of unionization and the negligible level of interest among Southern workers to unionize;19 The extremely cost effective intermodal transportation network in the region, spanning railways, highways, airports and, most importantly, ports. With regard to ports, when Airbus announced its Mobile manufacturing facility, company officials cited the Port of Mobile as an instrumental factor in its location decision. Officials indicated that certain partially completed sections of the aircraft from cockpit to tailwill be shipped to the Port by barge from Airbus European manufacturing locations and used in the assembly of the aircraft at the Alabama location; A series of additional characteristics that make the South attractive for aeronautics companies, including the weather, reduced cost-of-living, lower or no personal income taxes, free or inexpensive property on which to build, along with other attractive quality of life attributes; and Finally, a phenomenon that appears to be unique to the aeronautics sector: the potential for highly lucrative defense-related federal government contracts being enhanced by having a presence in an array of states as opposed to concentrating assembly operations in a few select states, as was the case in prior decades. Spreading their operations out also can be a way to gain political influence in an industry where government plays an important role both as a regulator and customer.20 Securing or expanding a major aeronautics company, whether it is an Airbus or SpiritAeroSystems or Dassault Falcon, generates an array of direct, indirect and induced economic flows to the city, state and even the entire region. In addition, the halo effect, i.e., the considerable boost to a city and states image and global competitiveness as a result of landing a major and highly prestigious aeronautics company, also generates an immense degree of positive media attention and economic benefits.
Tax Incentives
Southern states extend attractive incentive packages, including tax breaks, the previously referenced worker training programs, an abundant labor pool and the ability to train a workforce that has not worked in the aeronautics sector in the past. In terms of incentive packages, in April 2013, Boeing announced that it was expanding its South Carolina location with an additional $1 billion investment, a move that would create another 2,000 direct jobs over the next several years. In turn, the state of South Carolina is providing $120 million in incentives for upfront costs such as utilities and site preparation at the companys North Charleston manufacturing complex.17Similarly, in July
IndustrY Statistics
W
Exports
Turbine manufacturing process at an Auburn, Alabama, GE Aviation jet engine components factory. Photo courtesy of GE Aviation.
hile there is growing evidence of multiple aeronautics companies setting up manufacturing operations in the SLC states, a review of selected statistical data is essential to determine the relative health of the industry, particularly with regard to production or output (represented by exports), investment in equipment and employment. This analysis will facilitate more meaningful conclusions on the continued strength of the economy in future decades and the role the industry will play across the states, especially the SLC region. One such data set involves the figures related to the export of civilian aircraft, engines and parts. While there has been a great deal of interest and focus at every level of government (federal, state and local) to expand exports in recent years, the export of aircraft and related items represents an area where the United States enjoys a clear dominance in global circles. U.S. transportation exports, which include aircraft exports, continue to rank at the top of a listing of all U.S. exports for the last several years (2007 to 2012); when this category does not rank at the very top, it often is in the top three. Given that the focus of this Regional Resource is the passenger or civilian aircraft segment within the industry, these numbers provide a clear signpost of the growth trajectory of the sector. Table 1 provides these details for the last decade along with year-to-date information for 2013.
Seasonally Adjusted Annual Rate of Table 1 Exports of Civilian Aircraft, Engines and Parts 2002 to 2013 (in billions US$)
Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (January - September) Export Value $50.4 $46.7 $46.1 $55.9 $64.5 $73.0 $74.0 $74.8 $71.9 $80.2 $94.4 $105.7
Source: U.S. Department of Commerce, Bureau of Economic Analysis (accessed November 11, 2013)
Table 2 State Aerospace Exports 2002 to 2012 and First Three Quarters of 2013 (in US$)
State United States (Total) Washington California Connecticut Georgia Texas Florida Ohio Kentucky Arizona New York Arkansas Kansas Indiana Pennsylvania North Carolina New Jersey Tennessee Illinois Michigan Massachusetts Alabama Virginia Minnesota Maryland Oklahoma Oregon South Carolina Missouri Utah D.C. Wisconsin Iowa Colorado Louisiana West Virginia Maine Mississippi Hawaii Nevada Unallocated New Mexico Delaware New Hampshire Vermont North Dakota Idaho Alaska Nebraska Montana Rhode Island Puerto Rico South Dakota Wyoming 2002 56,344,487,226 23,120,667,507 4,891,899,473 3,961,637,795 991,433,194 2,124,533,645 2,233,475,975 2,180,655,598 2,072,000,820 2,053,205,239 2,669,046,660 442,946,418 1,200,799,748 308,538,771 363,999,680 193,776,724 997,943,571 562,443,680 513,459,408 245,162,596 275,898,771 266,184,587 466,961,045 271,342,233 481,424,535 232,706,465 280,332,161 92,457,229 96,448,987 130,939,259 531,943,543 106,577,493 40,598,534 154,877,122 212,477,155 107,757,591 63,744,714 26,160,448 234,867,501 29,193,085 911,195,031 32,583,223 11,576,008 22,983,040 53,300,034 21,943,242 4,002,202 23,742,493 20,333,078 1,795,640 4,755,748 2,429,520 1,412,229 1,916,778 2007 84,763,400,210 27,753,699,686 7,207,393,816 5,599,083,259 2,997,814,005 5,302,862,373 3,397,443,031 3,457,490,741 3,845,838,070 2,864,454,573 2,584,090,234 1,151,184,939 3,450,374,783 825,828,303 587,743,737 854,449,276 1,384,705,940 953,429,806 1,404,548,618 510,067,153 616,244,496 338,927,534 983,727,009 533,680,586 729,932,435 291,007,151 388,793,691 218,802,899 1,316,632,495 306,307,314 575,414,467 293,121,279 356,061,442 144,085,795 254,119,969 169,015,981 76,728,091 54,842,521 61,904,062 145,415,000 226,166,193 79,594,322 71,185,721 54,333,892 62,240,260 14,124,669 18,619,988 35,592,734 127,584,436 23,455,498 10,307,222 3,296,356 48,451,445 986,291 Percent Change 50% 20% 47% 41% 202% 150% 52% 59% 86% 40% -3% 160% 187% 168% 61% 341% 39% 70% 174% 108% 123% 27% 111% 97% 52% 25% 39% 137% 1265% 134% 8% 175% 777% -7% 20% 57% 20% 110% -74% 398% -75% 144% 515% 136% 17% -36% 365% 50% 527% 1206% 117% 36% 3331% -49% 2012 105,839,451,836 37,110,551,093 7,994,835,882 6,981,781,182 5,638,614,220 5,636,133,411 5,736,121,115 5,663,256,001 3,834,815,372 2,603,325,732 2,511,750,391 1,867,421,182 2,101,356,675 1,698,612,730 989,708,243 1,130,803,736 1,037,153,644 1,231,582,663 1,031,654,626 953,303,953 787,552,174 691,774,567 1,075,883,880 457,733,294 652,654,285 504,029,922 625,539,685 213,753,828 703,891,926 390,157,012 501,757,387 343,352,710 326,114,016 176,641,991 226,145,060 282,741,465 253,731,689 216,458,328 307,884,386 99,692,200 119,491,425 65,664,896 165,224,082 61,719,175 66,544,069 26,852,454 537,991,212 72,752,866 74,919,669 11,512,586 7,455,258 11,215,112 25,227,802 2,473,971 Percent Percent Change, Change 2002- 2012 25% 88% 34% 61% 11% 63% 25% 76% 88% 469% 6% 165% 69% 157% 64% 160% 0% 85% -9% 27% -3% -6% 62% 322% -39% 75% 106% 451% 68% 172% 32% 484% -25% 4% 29% 119% -27% 101% 87% 289% 28% 185% 104% 160% 9% 130% -14% 69% -11% 36% 73% 117% 61% 123% -2% 131% -47% 630% 27% 198% -13% -6% 17% 222% -8% 703% 23% 14% -11% 6% 67% 162% 231% 298% 295% 727% 397% 31% -31% 241% -47% -87% -18% 102% 132% 1327% 14% 169% 7% 25% 90% 22% 2789% 13342% 104% 206% -41% 268% -51% 541% -28% 57% 240% 362% -48% 1686% 151% 29% Year-To-Date (Jan - Sept 2013) 85,904,714,534 32,677,539,557 7,122,563,049 5,984,801,782 4,882,750,845 4,222,131,983 4,083,054,040 3,985,063,081 3,812,317,004 2,228,575,803 1,599,232,555 1,350,808,141 1,317,800,725 1,160,615,596 1,096,110,543 988,700,002 800,568,528 796,926,281 678,327,920 637,628,086 592,870,942 504,680,205 497,704,918 493,604,104 452,231,262 434,377,646 403,082,835 391,527,665 341,239,344 250,216,252 243,609,955 240,223,595 213,363,613 199,320,869 179,304,430 150,541,816 137,088,452 127,386,191 105,392,845 98,339,978 75,256,453 70,207,754 53,374,865 45,761,193 43,615,244 31,598,386 30,563,597 30,316,293 12,475,682 11,873,747 6,581,351 4,219,093 3,561,456 1,750,282
Source: U.S. Department of Commerce, International Trade Administration (accessed November 18, 2013)
Table 1 documents the impressive performance of civilian aircraft, engines and parts exports. From $50.4 billion in 2002, the sector steadily increased in almost every year over the next 11 years (experiencing a slight 1 percent decline between 2003 and 2004) and over the first nine months of 2013, and is on track to equal $105.7 billion for the year (seasonally adjusted). Further exploring the statistics related to exports allows us to review a breakdown by state. Table 2 features this information for the 2002 to 2012 period and the first three quarters of 2013. The data featured in Table 2 refers to exports in the larger aerospace product and parts manufacturing category that includes the following sub-categories: aircraft manufacturing; aircraft engine and engine parts manufacturing; other aircraft parts and auxiliary equipment manufacturing; guided missile and space vehicle manufacturing; guided missile and space vehicle propulsion unit and propulsion unit parts manufacturing; other guided missile and space vehicle parts; and auxiliary equipment manufacturing. As apparent in Table 2, aerospace exports fared extremely well in the 2002 to 2012 decade, with the number increasing from $56.3 billion in 2002 to $105.8 billion in 2012, an increase of 88 percent. At the mid-point in the decade, 2007, aerospace exports already were a remarkable $84.8 billion, an improvement of 50 percent from 2002. More impressively, at the end of the first three quarters in 2013, total aerospace exports amounted to nearly $86 billion, some 81 percent of the amount reached for the entire year in 2012. Hence, it is very likely that when aerospace exports for the entire 2013 calendar year are tabulated, they will exceed the level reached in 2012. Further investigation into the performance of the SLC states in terms of aerospace exports allows for several conclusions: for the 2002 to 2012 period, only one state (Louisiana) experienced a single digit growth rate; a second state (Kentucky) experienced double digit growth, while the remaining 13 states all saw triple digit growth rates. Florida and Georgia were the two SLC states with the largest aerospace exports, with $5.7 billion and $5.6 billion in 2012, respectively.
According to Table 3, while there have been some years during the 2002-2012 review period when there were no year-over-year increases in private fixed investment in the aircraft sector, the last three years (2010 to 2012) saw steady increases. In fact, between 2002 and 2012, there were declines in four years, all years when the effects of the 2001 recession and the Great Recession were most severe. Between 2002 and 2012, the increase in investment from $27.2 billion to $34.2 billion signaled a growth rate of 26 percent, a noteworthy number. This rate also reflects the encouraging signs that Americas manufacturing sector is experiencing a renaissance, albeit a muted one; an indication that steady fixed investments will lead to greater output in the sector. Figure 1 also presents private fixed investment in aircraft manufacturing for the period 2009 through 2012, a period of consistent growth.
Manufacturing Establishments
Another statistical indicator of the relative health of the aeronautics sector involves the number of private, aerospace product and parts manufacturing establishments in the states over the past decade (2002 to 2012). The data featured in Table 4 involves the same sub-categories that were featured in Table 2: aircraft manufacturing; aircraft engine and en
For greater details on the American manufacturing renaissance, please see CanagaRetna, Sujit, M., Workforce Development In the SLC States, July 2013, http://www.slcatlanta.org/Publications/ EconDev/workdev_web.pdf.
Private Fixed Investment in Table 3 Aircraft Manufacturing 2002 to 2012 (in billions US$)
Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Export Value $27.2 $20.0 $23.3 $22.5 $21.4 $28.3 $29.4 $17.7 $22.3 $25.5 $34.2
Private Investment
Another statistical indicator worthy of review is private fixed investment in all aspects of aircraft manufacturing, a number that would signify how confident decision makers in the sector are about its future growth potential. Table 3 outlines this indicator.
Source: U.S. Department of Commerce, Bureau of Economic Analysis (accessed November 11, 2013)
Table 4 Private Aerospace Product and Parts Manufacturing Establishments by State 2002-2012
State United States (Total) California Florida Texas Washington Connecticut Kansas Georgia Ohio Arizona New York Oklahoma Michigan Pennsylvania Utah Missouri North Carolina Alabama Illinois Indiana Oregon Colorado Tennessee Maryland Massachusetts Virginia Minnesota Arkansas Kentucky New Jersey Idaho South Carolina Louisiana New Mexico Wisconsin Nevada New Hampshire West Virginia Mississippi Nebraska Vermont Maine Alaska Montana Delaware Iowa North Dakota South Dakota Wyoming Hawaii Rhode Island 2002 2,244 633 171 220 187 156 147 51 111 135 87 65 64 59 41 48 25 41 34 41 42 37 28 29 31 30 N/A 33 13 23 20 N/A 15 10 25 N/A 10 15 7 N/A N/A N/A 6 12 N/A N/A 7 7 N/A N/A N/A 2007 2,323 634 219 250 194 154 143 81 115 131 107 80 67 74 51 43 31 46 45 40 43 41 21 32 33 35 28 27 13 23 26 10 17 15 22 10 10 13 11 10 7 4 8 8 3 6 5 9 5 1 1 2012 2195 587 302 226 170 163 149 147 123 122 97 67 66 61 55 49 49 48 45 44 41 36 33 32 32 31 29 27 26 25 24 24 21 21 19 13 12 12 10 10 9 8 7 7 6 6 5 4 4 2 N/A Percent Change Percent Change Percent Change 2002-2007 2007-2012 2002-2012 4% -6% -2% 0% -7% -7% 28% 38% 77% 14% -10% 3% 4% -12% -9% -1% 6% 4% -3% 4% 1% 59% 81% 188% 4% 7% 11% -3% -7% -10% 23% -9% 11% 23% -16% 3% 5% -1% 3% 25% -18% 3% 24% 8% 34% -10% 14% 2% 24% 58% 96% 12% 4% 17% 32% 0% 32% -2% 10% 7% 2% -5% -2% 11% -12% -3% -25% 57% 18% 10% 0% 10% 6% -3% 3% 17% -11% 3% N/A 4% N/A -18% 0% -18% 0% 100% 100% 0% 9% 9% 30% -8% 20% N/A 140% N/A 13% 24% 40% 50% 40% 110% -12% -14% -24% N/A 30% N/A 0% 20% 20% -13% -8% -20% 57% -9% 43% N/A 0% N/A N/A 29% N/A N/A 100% N/A 33% -13% 17% -33% -13% -42% N/A 100% N/A N/A 0% N/A -29% 0% -29% 29% -56% -43% N/A -20% N/A N/A 100% N/A N/A -100% N/A
Source: U.S. Department of Labor, Bureau of Labor Statistics (accessed November 13, 2013)
gine parts manufacturing; other aircraft parts and auxiliary equipment manufacturing; guided missile and space vehicle manufacturing; guided missile and space vehicle propulsion unit and propulsion unit parts manufacturing; other guided missile and space vehicle parts; and auxiliary equipment manufacturing. Although the totals for each year presented in Table 4 include data for both aircraft manufacturing and guided missile and space vehicle manufacturing, except for Alabama, California, Texas, and a single year in Virginia, the differences in these categories are negligible. As evident in Table 4, even though there was a decline (-2 percent) in the number of private aerospace product and parts manufacturing entities in the United States between 2002 and 2012, and for the more recent 2007 to 2012 period (-6 percent), a number of the SLC states fared well. Of the 50 states, there were 11 states for which data was unavailable for the three years selected in the decade under review (2002 - 2012).** An additional 11 states saw declines in the number of aerospace manufacturing facilities during the review decade. Twenty-eight states saw an actual increase in the number of such establishments. Of the 11 states that saw declines, two were SLC states (West Virginia and Arkansas); of the 28 states that saw an increase, four
Data for these states did not meet Bureau of Labor Statistics or state agency disclosure standards. One possible explanation for these omissions is that the numbers were so small that it would have allowed for the identification of specific individuals and/or companies.
**
experienced single digit increases (Missouri, Texas, Oklahoma and Virginia) while the remaining nine SLC states also saw at least double digit increases. In fact, two SLC states (Kentucky and Georgia) experienced triple digit increases in the decade. Georgias 188 percent increase was the highest in the nation. Finally, even though information for South Carolina was only available for the 2007 to 2012 period, the state more than doubled its number of aerospace establishments in the past five years.
Employment
Another important statistical indicator of the health of the industry involves reviewing employment patterns during the past decade (2002 to 2012). Once again, the focus is on the number of private sector jobs created by the aerospace product and parts manufacturing sector. As with Table 4 that reviewed the number of establishments, Table 5 includes aircraft (engines, engine parts, other parts, auxiliary equipment) and all items related to guided missiles and space vehicles. As demonstrated in Table 5, there was no data available for all the years in the review decade (2002 - 2012) for 13 states. An additional 14 states saw a decline in employment in the aerospace sector between the two ends of the review decade, including five SLC states (Louisiana, Virginia, Tennessee, Arkansas and Alabama) along with two states that saw no change and zero growth (Florida, an SLC state, was one of the two states). Finally, the remain-
Figure 1 Private Fixed Investment in Aircraft Equipment and Software
Source: National Income and Product Accounts Tables, Bureau of Economic Analysis, U.S. Department of Labor (accessed February 7, 2013)
Table 5 Private Aerospace Product and Parts Manufacturing Employees by State 2002-2012
State United States (Total) Washington California Texas Kansas Connecticut Arizona Georgia Florida Ohio Missouri Alabama Pennsylvania Massachusetts Indiana Colorado New York Oklahoma Utah South Carolina Maryland North Carolina Michigan Arkansas Oregon Illinois Kentucky West Virginia Tennessee New Jersey Virginia Louisiana Vermont New Hampshire Wisconsin New Mexico Mississippi Minnesota North Dakota Nevada Nebraska Delaware Idaho Montana South Dakota Wyoming Alaska Hawaii Iowa Maine Rhode Island 2002 302,698 75,653 79,425 41,080 40,806 32,072 28,768 9,901 19,023 15,212 13,556 13,044 8,310 13,158 7,320 6,841 6,354 3,701 6,634 N/A 3,078 2,105 4,782 4,045 2,237 2,583 1,797 2,085 3,033 1,540 3,289 3,103 N/A 887 1,144 1,089 509 N/A 664 N/A N/A N/A 125 105 79 N/A 29 N/A N/A N/A N/A 2007 293,955 80,036 71,971 47,871 41,092 31,609 27,426 19,012 19,639 16,145 14,560 12,941 8,891 11,899 7,104 7,757 6,858 5,226 8,359 866 4,938 3,521 3,037 3,722 2,845 2,697 2,803 2,694 2,157 1,408 1,446 2,838 N/A 1,134 1,128 2,267 754 N/A N/A 728 390 N/A 258 145 144 74 39 N/A N/A N/A N/A 2012 274,324 94,224 70,465 47,940 32,409 30,352 26,652 22,002 19,041 16,124 14,235 12,514 11,805 11,600 7,181 6,824 6,717 6,218 5,926 5,867 5,463 4,601 3,758 3,228 3,122 2,940 2,938 2,364 2,137 1,653 1,599 1,341 1,332 1,241 1,158 1,063 882 824 605 552 455 429 309 177 86 57 N/A N/A N/A N/A N/A Percent Change Percent Change Percent Change 2002-2007 2007-2012 2002-2012 -3% -7% -9% 6% 18% 25% -9% -2% -11% 17% 0% 17% 1% -21% -21% -1% -4% -5% -5% -3% -7% 92% 16% 122% 3% -3% 0% 6% 0% 6% 7% -2% 5% -1% -3% -4% 7% 33% 42% -10% -3% -12% -3% 1% -2% 13% -12% 0% 8% -2% 6% 41% 19% 68% 26% -29% -11% N/A 577% N/A 60% 11% 77% 67% 31% 119% -36% 24% -21% -8% -13% -20% 27% 10% 40% 4% 9% 14% 56% 5% 63% 29% -12% 13% -29% -1% -30% -9% 17% 7% -56% 11% -51% -9% -53% -57% N/A N/A N/A 28% 9% 40% -1% 3% 1% 108% -53% -2% 48% 17% 73% N/A N/A N/A N/A N/A -9% N/A -24% N/A N/A 17% N/A N/A N/A N/A 106% 20% 147% 38% 22% 69% 82% -40% 9% N/A -23% N/A 34% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Source: U.S. Department of Labor, Bureau of Labor Statistics (accessed November 13, 2013)
Boeing 787 Dreamliner assembly site in North Charleston, South Carolina. Photo courtesy of Boeing MediaRoom.
Top 10 States by Aerospace Table 6 Job Growth 2007-2012

State United States (Total) South Carolina North Carolina Pennsylvania Michigan Washington Oklahoma Georgia Oregon Maryland Illinois EmployNet New Growth ment Jobs Q2/2007-12 Q2/2012 Q2/2007-12 491,640 5,771 4,575 11,779 3,742 93,060 5,975 21,998 3,081 5,481 2,956 7,508 4,961 1,158 2,922 744 14,212 865 3,073 331 552 231 1.6% 612.5% 33.9% 33.0% 24.8% 18.0% 16.9% 16.2% 12.0% 11.2% 8.5%
number of aerospace establishments (from 51 in 2002 to 147 in 2012). Based on this information, the aerospace sector clearly has surfaced as a major economic booster to Georgia and regional economies. In terms of overall U.S. employment in the aerospace sector, paralleling the broader struggles faced by the American manufacturing sector in recent decades, there was an overall decline in the number of employees both between 2002 and 2012 (-9 percent) and 2007 and 2012 (-7 percent). A report prepared by Avalanche Consulting, an economic consulting outfit based in Austin, Texas, released in February 2013 revealed very positive employment trends in the aerospace sector for South Carolina, North Carolina, Oklahoma and Georgia.21 Table 6 provides these details. As noted in Table 6, South Carolinas aerospace sector employment grew by more than 600 percent between 2007 and 2012, a number that was largely influenced by the opening of the Boeing facility in North Charleston and its host of related suppliers. Specifically, there was a total of 4,961 new net jobs created in the sector between the second quarter of 2007 and 2012. Of the top 10 states experiencing the greatest increases in aerospace jobs in the five-year review period, four were in the SLC region and all significantly exceeded the national growth rate (1.6 percent) in terms of job growth. In fact, North Carolinas nearly 34 percent growth rate between 2007 and 2012 ranked the state second in the nation, after South Carolina.
Source: Avalanche Consulting (accessed November 19, 2013)
ing 21 states saw positive growth over the review period and, notably, two SLC states (North Carolina and Georgia) experienced triple digit growth rates. Georgias 122 percent increase in private sector employment in the aerospace sector (from 9,901 employees in 2002 to 22,002 employees in 2012) was all the more significant since the state also led the nation in terms of the growth in the
WorKforce DeVelopment
Inside the Robotic Maintenance Training Center of the Alabama Robotic Technology Park. Photo courtesy of Calhoun Community College.
ne of the hallmarks of a successful state economic development strategy is ensuring that manufacturing facilities setting up operations have an adequate supply of skilled workers positioned to tackle the challenges of the complex 21st century manufacturing arena. There has been a surfeit of studies and research documenting a serious skills shortage in the contemporary American manufacturing sector, a development that could completely derail its nascent renaissance.22 These reports maintain that, unless policymakers rapidly enact aggressive policies to train and retrain a new generation of manufacturing workers, Americas economic prowess in the 21st century will be crippled. Even in the aeronautics corridor, and the broader aerospace sector, there are serious challenges related to hiring skilled labor to staff the technically demanding positions in the industry.23 As the baby boomers that populated the industry in recent decades begin to retire in substantial numbers, industry experts are noting the extreme difficulties associated with filling these positions with skilled new workers. Given the fact that commercial aircraft manufacturers like Boeing and Airbus expect rising demand for
aircraft and related components in coming decadesthese companies expect demand to double over the next 15 years, and the Federal Aviation Administration forecasts that the number of airline passengers will soar from 731 million in 2011 to 1.2 billion in 203224the role of an adequately trained workforce to meet the demand for new and rising aircraft production cannot be overstated. In a response similar to that of the auto industry, a number of SLC states have been extremely proactive on meeting the needs of the aeronautics companies locating and expanding in their states. As previously mentioned, aeronautics officials often cite the ability of SLC states to provide an appropriately trained labor pool as an important consideration in their location decisions. In fact, Mr. Tim Coyle, former vice president of Boeing South Carolina, commented that [I]ve had experience with training across many of our facilities and what we have here in South Carolina is by far the best Ive seen.25 Also, in South Carolina, when EngFor more details on efforts in the SLC states to promote workforce development see Workforce Development in the SLC States, CanagaRetna, Sujit M., July 2013, http://www.slcatlanta.org/Publications/EconDev/workdev_web.pdf.
land-based GKN Aerospace announced plans in November 2011 to invest $38 million and create 278 jobs over the next six years at its new Orangeburg facility, the company identified the states growing aerospace industry, availability of a skilled workforce and local training programs as important in swaying its decision to open the plant.26 Details from several SLC states illustrate the manner in which these states have geared their workforce training programs to the advanced manufacturing sector, including the aeronautics industry.
Components of the Alabama Robotic Technology Park Program

Phase I: The Robotic Maintenance Training Center houses an industry training program where technicians are trained to work on robotic machinery. Phase II: The Advanced Technology Research and Development Center is used for the purpose of research, development, and testing of leading-edge robotics used for defense projects, space exploration, and manufacturing processes. Phase III: The Integration, Entrepreneurial, and Paint/Dispense Training Center (in development) will allow companies to build and adapt automation for new and existing manufacturing processes. The facility will allow companies to train in manual paint spraying techniques and robotic paint dispensing training.
Source: Industrial Robots Training Center Prepares Alabama Workers For High-Tech Manufacturing Jobs, Area Development Online Research Desk(2013 Auto/Aero Site Guide)
Alabama
The Alabama Industrial Development Training (AIDT) program plays a critical role in training workers for positions in the new and expanding companies in the state. One of the mechanisms AIDT deploys to accomplish this goal is industry-specific training facilities such as the Robotic Technology Park (RTP). The RTP is Alabamas premier training center tasked with facilitating highly advanced training in robotics and automation technologies, skills critical for workers pursuing careers in the aerospace industry. The RTP comprises three individual training centers that target specific industries such as the aerospace sector. As an example of the states commitment to fostering a superior workforce for these advanced manufacturing jobs in fields such as aeronautics, details on the Airbus project in Mobile remain salient. Specifically, of the $158 million in total incentives lined up by the state and local governments of Alabama for Airbus, $51.9 million is dedicated toward constructing a 40,000-square-foot, on-site training center where workers will be prepared, at state expense, for the complex tasks associated with the new facility.27
and assembly, and robotics and automation, the coordination of efforts under the Consortium is expected to more efficiently ensure a highly proficient aviation workforce for Boeing and other companies.
South Carolina
Experts cite South Carolinas commitment to expand workforce development in advanced manufacturing as an important reason for the states emergence on aerospace radars.29 In this connection, the vibrant partnership among three key players in advancing workforce development in the statethe readySCTM program, South Carolina Manufacturers Alliance (an advocacy group for the manufacturing sector in the state) and the South Carolina Technical College Systemhave proved very effective. For instance, South Carolina, just like several other SLC states, provides government-sponsored training programs so companies like Boeing can have an array of candidates for staffing their manufacturing facility. Given that many companies largely have abandoned their in-house training programs, these government-sponsored programs, usually through a state initiative such as readySCTM, remain very appealing. The program assists in recruiting and providing the initial training needs of new and expanding manufacturing operations in the state. To this purpose, the program effectively leverages assets across the state to provide recruitment, assessment, training development, management and implementation services to qualifying companies. In order to qualify for readySCTM assistance, the jobs projected must be permanent; salary
Missouri
In December 2013, the General Assembly convened in special session to craft a series of economic incentives to attract the production of the new Boeing 777X in the state. One of the key components of the incentive package includes provisions to expand the capacity of the states workforce in the aeronautics sector.28 Specifically, Governor Nixon announced that five community colleges in the St. Louis area, i.e., the Missouri Aerospace Training Consortium, have an arrangement to train workers for advanced manufacturing jobs at aerospace companies such as Boeing. The five colleges include East Central College, Jefferson College, Mineral Area College, St. Charles Community College and St. Louis Community College. While all the schools currently offer programs in welding, aerospace production
South Carolina Manufacturers Alliance (SCMA) 2013 Legislative Agenda

MSSC Certification: SCMA supports a $6.5 million state budget request for an initiative to create a statewide program through the technical college system for students to obtain the Manufacturing Skills Standard Council (MSSC) certificate. The program, which is modeled after the National Association of Manufacturing (NAM)-endorsed MSSC for both production and logistics, will educate and prepare a portion of South Carolinas workforce for entry level positions in manufacturing by centering on six major themes: employability skills, academic skills, processes and production, maintenance awareness, quality and continuous improvement, and safety. Work Ready Community: SCMA is a partner in the Work Ready Community initiative. Developed by ACT, Inc. (the nonprofit organization focused on helping people achieve education and workplace success), a Work Ready Community is a measure of the quality of a countys workforce based on four criteria - high school graduation, soft skills development, business support, and National Career Readiness Certificate holders. Technical College Program Funding: SCMA supports the South Carolina Technical College Systems request for $7.54 million (non-recurring) in the state budget for the readySCTM program. The program is one of the states top incentives for companies looking to locate or expand and create new jobs in South Carolina.
Source: Issues & Advocacy, South Carolina Manufacturers Alliance
to provide technical certificates in the field. In addition, several high schools in the vicinity of the Boeing facility proffer aerospace- and aeronautics-related classes to students interested in a career even before college or technical school: R.B. Stall High School (in North Charleston) hosts the Aeronautical Studies Academy and Wando High School (in Mt. Pleasant) offers an aerospace engineering course for 9th-12th grade students.32
Tennessee
During the 2013 legislative session, Senator Mark Norris (SLC chair in 2010-2011 and CSG chair in 2014), Majority Leader of the Tennessee State Senatealong with Tennessee House Majority Leader Gerald McCormicksponsored and enacted SB 1330/HB1276. This bill, titled Labor Education Alignment Program (LEAP), was designed to provide students at Tennessees technology centers and community colleges the opportunity to combine occupational training in a high skill or high-tech industry with academic credit and to apply that experience toward a degree. Senator Norris was responding to a growing challenge in a number of states, including his own: the lack of a workforce adequately trained in manufacturing disciplines. According to Senator Norris, Ive met with a number of industries in high-tech manufacturing ready to expand in Tennessee but for a lack of qualified employees, and I know of many Tennesseans who cant afford to attend school while sacrificing a paying job. This promotes the best of both worlds for employers, employees and the economy of Tennessee.33 Senator Norris added, [T]his is not unlike the old apprentice programs of generations past, where students get a practical utilization of what theyre learning from the books. But were adding a modern higher education component to address what Tennessee employers keep asking for: candidates with the requisite skills needed for todays technologically advanced workplace.34 The legislation specifically directs several state entities to work together in both establishing and carrying out the initiative. Section 4 of SB 1330 delineates several disciplines, such as advanced manufacturing; electronics; information technology; infrastructure engineering; and transportation and logistics that would qualify under the LEAP legislation. As Mr. Jason Bates, administration manager at Bodine Aluminum (a company that produces aluminum cylinder blocks and automatic transmission parts for Toyota), in Jackson, Tennessee, stated: [S]upport for education in manufacturing technology is critical for Tennessees growth35 and Senator Norris successful LEAP legislation is an important step toward promoting a technologically competent workforce in Tennessee.
has to be a competitive wage for the area; benefit packages must include health insurance; and the number of jobs created must be adequate to allow readySCTM to provide training in a cost effective manner.30 The readySCTM program has been very effective with training workers for the Boeing manufacturing facility in South Carolina. For instance, Jack Jones, Boeing South Carolinas vice president and general manager, commented in April 2012, when the first 787 Dreamliner built in South Carolina rolled out, that 85 percent of the non-management Boeing employees on site [at the South Carolina plant] were hired from within 100 miles of the plant and trained through the states readySCTM program, a glowing testament to the type of training provided by the state.31 Another strategy pursued by South Carolina involves promoting private educational institutes such as Trident Technical Colleges Aeronautical Studies Division (in North Charleston, very close to the Boeing manufacturing facility) and Embry-Riddle Aeronautical University
Selected Commercial Aircraft Manufacturers OperatinG in the SLC States
Airbus A319, featuring fuel-saving Sharklets wingtip devices. Photo courtesy of Airbus SAS 2013.
he July 2012 announcement by the European Aeronautic, Defence & Space Company (EADS), Airbus parent company, that the European aircraft manufacturer would build its first American factory in Mobile, Alabama, was greeted with great enthusiasm in the state and the region.36 The $600 million five-year Airbus investment will lead to a manufacturing operation building the A-319, the very popular A-320 and the A-321, and all aircraft in the single-aisle A-320 family, by the end of 2016. These 150-seat airplanes are the minivans of the airline worldwidely-used people-haulers generally flown on short-and medium-haul trips.37 By the end of 2017, once production reaches its peak, the facility is scheduled to build 40 to 50 aircraft annually. Certain aircraft components constructed at Airbus facilities in Toulouse, France, and Hamburg, Germany, will be transported by barge to the Port of Mobile and then trucked a short distance to the assembly line at the new facility. The assembly line will be a replica of other Airbus lines in Europe, a move that reduces startup expenses. The new Airbus facility in Mobile will be built at the Brookley Aeroplex, a former U.S. Air Force base that was closed in 1969. Along with its 1,650-acre size, the Brookley Aero-
T
Airbus
plex also boasts runways capable of accommodating a wide range of aircraft, another factor that was important in Airbus decision in selecting Mobile. Airbus motivation for establishing this manufacturing presence in Mobile was multi-dimensional: North America is the worlds biggest market for singleaisle planes, and Airbus forecasts that this type of aircraft will represent 26 percent of new aircraft sale volumes during the next 20 years. Given that Airbus currently maintains a market share of around 17 percent of the single-aisle market in the United States (the company splits the single-aisle market fairly evenly with Boeing on a global scale), the company is eager to expand its share of the market. Airbus officials felt that being in close proximity to its American airline customers was vital to generate new aircraft orders. In fact, it appears that this strategy already has paid off: in September 2013, Delta Air Lines announced that it has placed a firm order for 40 aircraft from Airbus, including 30 A-321s (with a per plane list price of $117.4 million) and 10 A330-300s (with a per plane list price of $239.4 million).38 This was Deltas
first order with Airbus in about two decades. Airbus indicated that the A-321s will be constructed at its planned Mobile facility. The U.S. fleet of single-aisle aircraft is one of the oldest in the world, with an average age of 13 years. In contrast, the average age for single-aisle aircraft is eight years in Europe and six years in China. Experts call for some 5,000 new single-aisle aircraft in the United States during the next 20 years, and Airbus seeks to gain a much larger portion of this future market with its Mobile manufacturing facility. Constructing the aircraft in Alabama helps Airbus slash its foreign exchange costs. Until the Mobile announcement, almost all the A-320s were built in Europe and, consequently, all costs are in euros. However, given that most aviation lending happens in U.S. dollars, these aircraft are sold in U.S. dollars. The exchange transfers raise costs for Airbus and, if even a portion of the expenses associated with the aircraft is in U.S. dollars, Airbus overall costs shrink. Hence, the U.S. manufacturing facility creates a natural currency hedge for Airbus by incurring most of its costs in dollars and not euros. (Like oil, aircraft are priced predominantly in dollars.) Several years before the Mobile announcement, Airbus was almost successful in landing a lucrative multibillion, multi-year mid-air tanker refueling contract with the U.S. Air Force. Eventually, Airbus lost out on this contract to Boeing. Airbus officials are convinced that having a major manufacturing presence in the United States, in Alabama in this instance, would significantly boost the companys chances of securing future defense and military contracts with the U.S. government. In fact, analysts contend that they want to be seen as an American company. The larger strategy is how this positions EADS long term. In 10 or more years, theyll be able to go back to the Pentagon and say, we have a good solid U.S. footprint.39 For Airbus to build its manufacturing facility in Mobile, the state is providing nearly $159 million in economic incentives. This amount comprises $125 million from the state and nearly $34 million from local governments. Importantly, the total incentive package to be provided includes bond expenses, site preparation, road improvements, building expenses and the previously mentioned workforce training. Also included are state tax breaks on sales, use, income and property that most major, new industries opening in Alabama procure. In return, Airbus agreedwhen the facility is at full capacityto create no fewer than 1,000 permanent jobs, an employment base that will generate payroll expenses of more than $61 million annually. The agreement that Alabama signed also includes
a clawback provision, i.e., the state will withhold funds if Airbus does not meet the employment target. Along with the direct, permanent jobs, the Airbus facility will generate hundreds of indirect and induced jobs in terms of the supply chain for the facility. In April 2013, Airbus broke ground at its $600 million Brookley Aeroplex facility and, in August 2013, officials with the Mobile Airport Authority confirmed that a bond issue totaling $260 million had been secured toward the projects completion. The bond will be repaid by lease payments from the future sales of aircraft manufactured by Airbus at the facility; while the entire proceeds of the bond issue will be allocated toward the construction of the facility, the bonds were floated on Airbus credit and not that of the Mobile Airport Authority.
Boeing
In late 2009, in what was touted as one of the most significant economic development announcements of the year, Boeing announced that it was building a manufacturing and assembly plant in North Charleston, South Carolina, the first facility the company has built outside its West Coast facilities since World War II.40 The South Carolina facility would build the companys new flagship airline, the 787 Dreamliner (an aircraft with a unit cost of $193.5 million) and, at full capacity, is expected to produce 3.5 Dreamliners a month. Boeings initial investment amounted to $750 million, and the company guaranteed that the operation would generate 3,800 new, permanent jobs (over seven years) at the assembly plant, while facility construction would create an additional 2,000 jobs. As is the case in many current economic incentive packages, Boeing is subject to clawback provisions for the states up-front funds if the company does not meet its end of the arrangement; moreover, most of the tax incentives are performancebased and will not be granted unless the company actually invests the money and creates the necessary jobs. There was some debate about the exact dimensions of the incentive package provided by South Carolina (state and local governments) to Boeing, but an extensive study carried out by reporters with The Post and Courier (initially in January 2010 and updated in March 2012) revealed that the total package amounted to more than $900 million, spread over 30 years. Most of the incentives took the form of property tax breaks in Charleston County (worth at least $306 million over the next 30 years) and up-front money to be given to the company through state bonds at a cost of roughly $399 million. The aforementioned $399 million involves the principal of $240 million the state is borrow-
Boeing 787 Dreamliner enters final assembly. Photo courtesy of Boeing MediaRoom.
ing to help pay for the new facility and interest costs of $129 million. The state is spending an additional $33 million to train future Boeing workers for the facility. Boeing also is exempted from paying state sales taxes on computers, jet fuel and construction materials. At the local level, the company was granted a 10-year property tax exemption on two Dreamlifter aircraft, specially fitted 747 aircraft that Boeing uses to transport oversized aircraft parts. Given that these aircraft sell for about $250 million each, the 10-year property tax exemption was estimated to be worth more than $100 million. Also, Charleston County agreed on a $50 million incentive that will return half of Boeings already reduced property taxes on the assembly plant for 15 years; additionally, if Boeing invests the agreed-upon $750 million within 10 years, some of the property tax breaks could remain in force beyond 2060. Given that the $900 million amount documented by The Post and Courier was significantly higher than the incentive package amounts reported previously, the South Carolina
Department of Commerce provided details on a cost-benefit analysis on Boeings economic impact in the state. Some of these details include: $3.8 billion in payroll disbursements during the facilitys first 15 years of operation. This figure includes the 3,800 direct jobs along with 5,971 additional, indirect jobs. Importantly, a number of aviation suppliers have flocked to the state to service the Boeing facility. For instance, a range of companies such as TigHitco (a composites manufacturing facility in North Charleston), Carbures (an engineering and manufacturing company in composites structures specializing in carbon fiber in Greenville) and Cargo Composites (a maker of air cargo containers in Charleston), all cited Boeings presence as the reason for locating in South Carolina. The total economic gain of the project over a 15-year period is estimated to be $5.2 billion. Construction at Boeings 2.5-million-square-foot assembly facility was completed after 13 months of work (seven months ahead of schedule). Built as an extremely eco-friendly plant, the massive roof contains the largest array of solar panels in the Southeast. These panels, covering an area the size of 11 football fields, generate 20 percent of the facilitys power needs. In addition, the plant touts ef-
When the Boeing deal was announced in November 2009, the number indicated for the incentive package was $170 million. Shortly thereafter, this number changed to $450 million. Consequently, the more than $900 million amount reported by The Post and Courier surprised many observers.
ficiency in terms of waste, sending zero waste to landfills and even recycling food scraps from the dining facility. In April 2012, Dreamliner No. 46 - with Made in South Carolina stenciled on its fuselage - rolled out to a rapturous crowd of employees and dignitaries. Not only was Dreamliner No. 46 the first Boeing-designed commercial jet built outside Washingtons Puget Sound region, South Carolina is the only Boeing location that carries out the entire sequence of Dreamliner manufacturing. It had taken 30 months to go from clearing dirt at the South Carolina facility to rolling out Dreamliner No. 46, a record accomplishment. Boeings success in South Carolina continued to greater heights in April 2013. The company announced an additional $1-billion, 320-acre expansion that would generate 2,000 more jobs, bringing Boeings total employment in North Charleston to approximately 10,000. In return, the state agreed to provide Boeing with $120 million more in incentives to advance this expansion project. In mid-December 2013, Boeing acted on the latest incentive package provided by the state by announcing that it would triple its footprint near Charleston International Airport.41 Specifically, Boeing closed on the purchase of 267 acres across from its 787 Dreamliner campus and also bought an additional 200 acres in the vicinity from private landowners in a $49 million transaction. The recently acquired land, more than previously expected, will house a new 230,000-square-foot structure to paint finished 787 Dreamliners in customers colors along with a new 10,000-square-foot, fully equipped fire station. The land deal and new buildings all are being purchased through the South Carolina Department of Commerce and part of the April 2013 incentive package. Additional positive news emerging from Boeing South Carolina included reports that the site will help design and build the carbon-fiber-reinforced plastic composite inner linings of the nacellesthe pods enclosing the jets engines for the forthcoming 737MAX, the successor to the current 737NG model. When Boeing and the International Association of Machinists Union in Washington initially could not come to an agreement regarding developing the new 777X airplane in the Puget Sound area, Boeing received a barrage of offers to host the production of the plane from some 22 states. South Carolina (along with Alabama and Missouri) was reputedly among the frontrunners to land this project. However, as indicated, Boeing workers in Washington conducted a second vote in early
January 2014 and agreed to the companys contract terms, a development that resulted in Boeing confirming that production of the 777X would remain in the Puget Sound area. Boeings impressive production forecast at all its facilities, not only South Carolina, is triggered by the massive demand for aircraft emanating mostly from international airlines. Through the third week of November 2013, Boeing had a total of 1,037 orders for aircraft with a bulk of the orders involving the 737 (780 orders), 777 (88 orders) and 787 (164 orders). In fact, at the Dubai Airshow held in mid-November 2013, Boeing secured 342 orders that netted $100 billion for the company, more than twice the value secured by Airbus (which received 142 orders for a net value of $40 billion). The massive commitment at the Dubai Airshow emerged from just four carriers in the tiny nations of Qatar (Qatar Airways) and United Arab Emirates (Emirates Airline, Etihad Airways and flydubai). Continuing in this vein, in late December 2013, Boeing announced that it had secured its first order from Asia for the forthcoming 777X jet, an order valued at $7.5 billion, from Hong-Kong-based Cathay Pacific Airways.42 Cathay, Asias top international carrier, will acquire 21 of the larger 9X version of the plane between 2021 and 2024 and deploy them on routes to North America and Europe. Not only will the 777X be Boeings first passenger aircraft of the next decade, the order will be critical to staving off competition in the long-haul market by arch competitor Airbus. Aviation analysts expect that Boeings association with South Carolina will continue to solidify in the coming years, estimating that [T]he long-range plan at Boeing is to shift all 787 production to Charleston.43 Analysts anticipate that production at the South Carolina facility, including future versions of the Dreamliner 787, the 78710, one day will rival Boeings massive operation in Everett, Washington. While progress at the Boeing South Carolina facility has been mostly positive, the operation has not been without controversy for two reasons: The National Labor Relations Board, questioning the legal standing of the sites new final assembly line, charged Boeing with selecting South Carolina over Washington in retaliation against past strikes by the International Association of Machinists Union. This legal issue dissipated in 2012 when the Union agreed to drop its objections to the Dreamliners production in South Carolina after clinching a deal with Boeing to produce the new 737 aircraft in Renton, Washington.
Photo courtesy of Gulfstream Aerospace Corporation
The Dreamliner, owned and operated by several airlines (including Nippon Airways, Norwegian Air and Polands LOT) has been plagued by a series of technical glitches in the past year that resulted in the Federal Aviation Administration (FAA) grounding all Dreamliners for four months. While these technical glitches have not been catastrophic, they were sufficiently alarming to force the FAA and Boeing (along with a number of other federal and private entities) to carry out extensive research to first determine and then eliminate these technical snafus.
ida, Massachusetts, Texas, Wisconsin, Nevada and several other locations across the globe. Of the companys 14,000 employees, 9,000 work in Georgia and, importantly, 1,700 of these employees are engineers. In 2006, in response to increasing demand, Gulfstream announced a $300 million expansion, completed in 2009. This expansion involved creating the largest general aviation aircraft maintenance facility in the world along with new manufacturing, paint and research and development operations. In late 2010, in its second major expansion in Georgia in five years, Gulfstream publicized that it would spend $500 million over seven years to expand in Savannah and generate an additional 1,000 jobs. In return, the state offered about $29.7 million in statutory incentives, including state tax credits and jobs training. By November 2013, Gulfstream announced that the lucrative market for large, top-of-the line business jets had resulted in the company doubling the number of jobs it had guaranteed the state in 2010 (the company created 2,200 jobs, more than 1,200 above the number agreed) in less than half the time. In January 2014, the company announced that it intended to create 100 new jobs over the next year as part of an expansion of its operations in Brunswick, Georgia. The $25 million expansion would involve the maintenance, repair and overhaul hangers at Gulfstreams facility at the Brunswick Golden Isles Airport.45 Gulfstream is encouraged by the fact that global business aviation growth forecastsled by the largest business jets, such as the G650remain at a healthy 4 percent to 5 percent each year for the next decade with increasing demand coming from the United States, Brazil, China, the Middle East and Russia. In fact, Gulfstream officials indicate that, as of November 2013, the company had a $14 billion
Gulfstream
In 1967, Grumman Aircraft Engineering, a company located in Bethpage, New York, decided to relocate to Savannah, Georgia, with a mere 100 employees.44 The company, which had been known for developing military aircraft, had just branched out into developing jet powered aircraft for corporate executives. Grumman, which was renamed Gulfstream a few years later, enjoyed sustained success in the following decades and, by 2011, had industriously launched the G650, the flagship aircraft of the company. The G650, with a price tag upwards of $60 million, can fly 18 people at nearly ninetenths the speed of sound, nonstop between Shanghai and New York. Gulfstream also manufactures the G550, G450, G280 and G150. Powered by more than two decades of research, Gulfstream also is working toward developing a supersonic business jet, the Gulfstream Whisperer. Since its arrival in Georgia in the late 1960s, public officials increasingly have recognized Gulfstream as one of the most noteworthy corporate entities in the Savannah area and in the state. All of the companys research and development occurs in Georgia (mainly Savannah, but also in Brunswick), with additional operations in California, Flor-
[W]e get to pick from the cream of the crop. We can hire very quickly rather than dragging the process out. - Don Blake, Director, Spirit AeroSystems
backlog of new aircraft orders, with the waiting list for the acclaimed G650 stretching out as far as 2017. For the first nine months of 2013, Gulfstreams revenues were $6 billion, up $932 million or 18.5 percent over revenues of just over $5 billion during the same period of 2012.
Site Room to expand facilities; Partnerships with the state, local community and logistics park; and Proximity to original equipment manufacturers or OEMs, suppliers and aerospace composites expertise. As previously highlighted, many of the companies locating in the SLC states cite the quality of the available workforce and the willingness of state and local governmentsworking with local technical collegesto provide the necessary training to employees as an influential factor in their location decisions. The entire workforce training costs often are borne by the state and local governments. Spirit AeroSystems experience in North Carolina was similar in this regard. Mr. Don Blake, Spirit AeroSystems director, quality and site services for the North Carolina Business Unit, who played a key role in the decision-making process, noted the importance of access to proficient workers in the final location decision: Skill availability weighed heavily. If you move an industry like ours into a new location, do you have the engineers and technicians or the capability to train available workers in new processes and technologies they may not be totally familiar with?47 Mr. Blake commented that the state and local governments were able to demonstrate to Spirit AeroSystems their ability to leverage the talent pool at nearby Lenoir Community College, Craven Community College, military personnel being discharged from the Cherry Point Marine Corps Air Station and graduates of East Carolina University, North Carolina State, UNC at Chapel Hill and Duke University. In fact, Lenoir Community College devised a new Aerospace Manufacturing Readiness program tailored to Spirits workforce requirements, based on a similar program offered at Craven Community College for military aerospace workers. The specially designed certification programs for potential Spirit AeroSystems workers were extremely helpful in serving as a screening process, with students who excelled in the program qualifying for additional training.48 In terms of incentives provided by North Carolina, observers tabulated that the states total commitment, over a multi-year period, could balloon to almost $250 million, funds that would be pulled from the North Carolina Department of Commerce (One North Carolina Fund) and the North Carolina Golden Leaf Foundation (formed under a charter established by the North Carolina General Assembly to provide economic assistance to economically affected or tobacco-dependent regions of the state using funds obtained from cigarette manufacturers). About $136 million of the incentives involved expenses related to workforce
Spirit AeroSystems
In September 2008, Spirit AeroSystems, the worlds largest independent supplier of commercial airplane assemblies and components, broke ground on a 500,000-square-foot manufacturing facility in Kinston, North Carolina.46 The facility was geared to design and produce the composite center fuselage (upper and lower shells) and the front wing spar for the Airbus A350 XWB that eventually would be transported to Airbus headquarters in Toulouse, France, for final assembly. Given that there were a number of states that competed for this facility, Spirit AeroSystems officials cited North Carolinas prowess in the following areas as critical in the final selection of Kinston as the location for its newest manufacturing facility: Multimodal Logistics A runway suitable for large air freighters (a 11,500-foot runway); Proximity to two Atlantic seaports (Morehead City and Wilmington); Rail access to the ports (a new, 5.8-mile rail spur from the facility linking to the east-west line served by Norfork Southern); and Interstate-quality roads (access to I-95). Workforce Supply of workers with transferrable skill sets; Community college training programs tailored to Spirit AeroSystems requirements (Lenoir Community College in Kinston and Craven Community College in New Bern); Abundant supply of workers exiting military service (nearby military maintenance operations at Cherry Point Marine Corps Air Station in Havelock); and Access to graduating students at science, engineering and management programs at nearby four-year universities (East Carolina University, North Carolina State, UNC at Chapel Hill and Duke University).
Composite center fuselage section of the Airbus A350 XWB. Photo courtesy of Photographer Tim Fox of Nantes, France.
training and site construction; $47 million in state tax credits over seven yearswith a clawback provisionfor which Spirit AeroSystems would be eligible, if certain employment numbers were met; $35 million in road, rail and runway improvements; nearly $15 million in property tax savings over 10 years; and local government incentives totaling nearly $16 million in infrastructure improvements. In return, Spirit AeroSystems promised to make a $570.5 million investment to establish a jet components production facility and employ 1,031 workers within six years. While production related to the Airbus A350 XWB prompted the facilitys launch in 2008, in July 2011, Spirit AeroSystems announced the addition of between 150 and 200 employees during the next five years to work on the production of wings for the Gulfstream G250 aircraft. The cost of launching this project at the Kinston facility was estimated to involve an investment of $53 million for the company. In late September 2013, shortly after North Carolina Governor Pat McCrorys visit to the Spirit AeroSystems facility in Kinston, reports emerged in the media that the company failed to qualify for some of the state tax credits it previously was eligible for based on the agreement signed in 2008. As in many other states, North Carolina officials wisely had pegged the release of state tax credits to employment targets, and since Spirit AeroSystems failed to meet these
targets at the required time, the company was ineligible for the credits. Specifically, the company missed out on $2.6 million in state tax credits in 2010, and possibly $4.2 million and $1.68 million in 2012 and 2013, respectively, for failing to meet employment targets. Spirit AeroSystems did receive $734,000 in state tax credits in 2011 after meeting the minimum number of jobs created for that year. As noted earlier, the company has to employ 1,031 individuals by the end of 2014.
Honda Aircraft Company

In 2007, Honda Aircraft Company announced its decision to establish its headquarters, research and development center and manufacturing facility in Greensboro (in Guilford County), North Carolina.49 The facility, located at the Piedmont Triad International Airport, has been making steady progress in the manufacture of the much anticipated HondaJet, the worlds most advanced, light business jet. (The estimated cost of the business jet is $4.5 million). In September 2012, Honda Aircraft Company advertised another milestone in its path toward manufacturing the HondaJet by breaking ground on a new customer service facility, a $20 million effort. The customer service facility will complement the HondaJet dealer network by providing heavy maintenance, major repair and overhaul services. The expansion, involving 54 acres, will bring the Honda
Aircraft footprint at Greensboro to more than 130 acres. Building space occupied by Honda Aircraft operations stands at more than 600,000 square feet. With the addition of the new customer service facility, the companys total capital investment exceeds $140 million. The companys expansion effort is part of a broader plan to create 419 new jobs at the company by the end of 2015 and included a $1 million grant from the One North Carolina Fund through the North Carolina Department of Commerce. In October 2012, company officials emphasized that the HondaJets production had commenced and that key testing milestones had been accomplished; the aircraft was moving closer to Federal Aviation Administration (FAA) certification and delivery. Not only was the assembly line for the HondaJet production in place, major aircraft components, including the fuselage and wings, had been produced, along with assembly of the first customer aircraft. While salaries at the facility varied by function, the average wage for the new jobs created by the Honda Aircraft Companys headquarters expansion was $53,418 plus benefits. (In contrast, the average annual wage in Guilford County in that year was $39,520). In August 2013, Honda Aircraft displayed an FAA-conforming HondaJet at AirVenture Oshkosh for the first time. Two aircraft performed a flight demonstration flyby at this major aviation event. The company is targeting the first quarter of 2015 for obtaining FAA certification.
world to mass produce aircraft engine components made of advanced ceramic matrix materials (CMC), a development with the potential to revolutionize jet engines and the jet propulsion industry. While GE Aviation already had a machining plant in Asheville, the new $124 million facility will focus on a completely new area, CMC (both materials and technology). The CMC engine componentsmade out of silicon carbide ceramic fibers and ceramic resinwill be introduced into the hot section of GE jet engines through a highly sophisticated process utilizing proprietary coatings. The specific CMC component that will be manufactured at the new GE Asheville facility is a high-pressure turbine shroud, a key component for the best selling LEAP jet engine. (The LEAP engine, which will enter airline service in 2016, will power the new Airbus A320neo, Boeing 737 MAX and the COMAC C919 aircraft from China.) Of note, the company already has received total orders and commitments for more than 5,200 LEAP engines and, given that there are 18 CMC turbine shrouds in each LEAP engine, this advanced manufacturing operation at the GE Asheville facility will see steady production going forward. While GE Aviation will begin hiring for the new CMC production operation in early 2014, the company projects that within five years, total workforce at the facility will grow to more than 340 employees. Workers at the current machining operation gradually will be transitioned to the new CMC component facility. In June 2013, GE Aviation also announced a $29 million capital investment at its plant in Durham, North Carolina. As in the Asheville facility, the Durham plants expansion will relate to assembling lightweight components for jet engines using breakthrough technologies pioneered by GE Aviation. The expansion in Durham will involve 50 new jobs paying an average annual salary of $60,000 and yield $557,000 in new tax revenue over five years. In exchange for the capital investment, GE Aviation secured $400,000 in incentives from Durhams City Council and an additional $200,000 from Durham County. The incentives (paid over five years) provided by the city and county will be pegged to GE Aviation meeting the following requirements: making capital investments of at least $24 million in the next three years; creating 50 jobs; and submitting a workforce development plan that will use the city of Durhams JobLink service to recruit employees.
GE Aviation
A global leader in jet engine and aircraft system production, GE Aviation maintains a number of manufacturing facilities across the SLC region.50 For instance, in Mississippi, the company operates manufacturing facilities in Ellisville (scheduled to employ 250 by 2017) and Batesville (employs 450). In North Carolina, the companys four facilities employ more than 1,300.
North Carolina
In North Carolina, the company has operations in four cities (Asheville, Durham, West Jefferson and Wilmington). In fact, GE Aviation announced capital injections of an additional $195 million at its North Carolina locations by 2017, demonstrating its commitment to expand aviation operations in the state. One of the locations GE Aviation is expanding is its Asheville facility. In mid-November 2013, the company broke ground on a new 170,000-square-foot site that will be the first in the
Mississippi
In late April 2013, GE Aviation also announced an expansion in Mississippi. At its Ellisville facility (in Jones County, in the southern part of the state), the company opened its second aviation composites factory in Mississippi, a new 340,000-square-foot facility that will manufacture
and assemble new composite components unique to the aviation industry. GE Aviations other Mississippi facility, opened in 2008 near Batesville in northwest Mississippi, already employs more than 450 people and is involved in the assembly of large front fans for jet engines, as well as the production of composite components. While the companys Ellisville facility is targeted to add up to 40 new jobs in 2013, given the current demand for its jet engines, GE Aviation expects hiring to reach 250 employees by 2017. The Ellisville facility will produce composite parts for two new engine programs: the LEAP jet engine and GE Aviations new Passport jet engine. The facility also will manufacture fan platforms (installed between the engines front fan blades) for the LEAP-1A and the LEAP-1C models, which will power the Airbus A320neo and the COMACS C919 aircraft. In addition, the Ellisville facility will produce the inlet for the Passport engine which was selected by Bombardier to power its Global 7000 and Global 8000 business jets. Finally, GE Aviations Ellisville plant will broaden its manufacturing base beyond jet engines and manufacture the transcowl, a component of the thrust reverser, which is located in the rear of the nacelle for Airbuss A320neo. In terms of preparing a workforce well-versed in advanced manufacturing processes, GE Aviation will work with the Mississippi Polymer Institute at the University of Southern Mississippi and the Advanced Technology Center at Jones County Junior College to ensure that the Ellisville facility has a proficient workforce.
Reports about UTC Aerospace Systems relocation to Charlotte included details that the company will invest no less than $4 million in new taxable property and create 325 fulltime jobs (by 2017) covering a range of functions including executive teams, engineering, operations, supply chain, quality control, customer service, business development and strategy. While salaries for the jobs vary by position, news reports documented that they would average between $100,000 and $200,000 per position annually, an amount significantly greater than the average annual salary in Mecklenburg County (where Charlotte is located) of $51,792. In return for these job and capital investment conditions from UTC Aerospace Systems, North Carolina (state and local) proffered a number of incentives: a $2.5 million grant from the One North Carolina Fund, $1.75 million in an economic development grant and $732,000 in business investment grants from the city of Charlotte and Mecklenburg County. The state and local governments agreed on additional conditions with UTC Aerospace Systems: the company must remain in Charlotte for 10 years and maintain 90 percent of the 325 new jobs for the duration of these 10 years. In addition, the state awarded a Job Development Investment Grant to the company making it eligible to receive a grant equal to 75 percent of the state personal income withholding taxes derived from the creation of new jobs for each of the 12 years in which the company meets annual performance targets. If the company meets these targets, the grant could generate a maximum benefit of $16.5 million over 12 years to UTC Aerospace Systems. Even though the UTC Aerospace Systems operation in Charlotte is not a manufacturing or assembly operation along the magnitude of the Boeing project in South Carolina or the GE Aviation project in Mississippi, it is an important addition to the aeronautics industry, demonstrating that the South is emerging as a powerhouse within the sector, beyond the manufacturing sphere.
UTC Aerospace Systems

In June 2012, UTC Aerospace Systems announced that it would be relocating its headquarters to Charlotte, North Carolina from Hartford, Connecticut.51 UTC Aerospace Systems is a division within the Hartford, Connecticutbased United Technologies, the 50th largest U.S. corporation on the Fortune 500 list in 2013. The division is the first headquartered outside of Connecticut and includes two major business units: (1)Aircraft Systems, which focuses on products such as propellers, landing gear, wheels and brakes, and (2) power, controls and sensing systems, which focuses on products such as aircraft electric systems, engine components and aircraft fire protection systems.
United Technologies is one of the nations most well-known defense and military contractors with products that include Sikorsky helicopters and Pratt & Whitney aircraft engines. The company also manufactures a number of civilian products including Otis elevators, escalators and moving walkways and UTC climate, controls and security heating, air conditioning and refrigeration systems, building controls and automation, and fire and security solutions.
Embraer
Founded in 1969 with the assistance of the Brazilian government, Embraer is a global aeronautics conglomerate that manufactures commercial, military, and executive aircraft in addition to providing a range of aeronautical services.52 With ongoing operations in Brazil, China, France, Portugal, Singapore and the United States, Embraers initial focus was on military aircraft for the Brazilian government. By the end of the 1970s, the company had moved into other commercial aircraft manufacturing, a progression confirmed by the entry into service of the new Embraer 170/190 in 2004.
Embraers foray into the United States occurred in 1979, when the company set up marketing, sales and technical support operations in Fort Lauderdale, Florida. Since then, Embraer has opened additional American operations: maintenance services in Nashville, Tennessee, and manufacturing facilities at two Florida locations, Melbourne and Jacksonville. The Fort Lauderdale location serves as the companys U.S. headquarters.
Phenom 300 light jets to NetJets, the Berkshire Hathaway-owned private aviation company with a portfolio of services that includes fractional ownership, jet cards, aircraft management and charter flights. Embraers deal with Columbus, Ohio-based Berkshire Hathaway has the potential to be worth $1 billion, a very significant transaction for the company.
Melbourne
In October 2013, Embraer announced that it would invest $28 million at its inaugural North American final assembly plant at Melbourne International Airport to manufacture its Legacy 450 and Legacy 500 aircraft. Manufacturing these corporate jets will entail the eventual creation of 600 jobs and reinforce the companys decades-long commitment to Florida. Embraer plans on adding an assembly line in 2014, and the first Legacy 500 will be delivered from the location in 2016. The company also builds the Phenom 100 and 300 aircraft alongside operating a paint facility at the location. Embraers engineering and technology center also will be permanently located at this location starting in 2014. This Embraer expansion in the state involved a collaboration among a number of public sector partners, including Enterprise Florida (the states economic development arm), the city of Melbourne, Melbourne Airport Authority, Brevard County, Space Florida, Economic Development Commission of Floridas Space Coast and Brevard Workforce.
Dassault Falcon
Dassault Falcon is part of the French aviation company Dassault Aviation, founded more than 100 years ago.55 The company is the last aviation group in the world still owned by its founding family and bearing its name. From those early beginnings, Dassault Aviation has become a major player in the corporate jet market and currently manufactures five different Falcon models: Falcon 7X, Falcon 5X, Falcon 900LX, Falcon 2000LXS and Falcon 2000S. With assembly and production plants in both France and the United States, and service facilities on multiple continents, Dassault Aviation has delivered more than 2,200 Falcon jets to 80 countries across the globe in the 50 years since the company launched its first jet in 1963. In 2012 alone, the company delivered 66 Falcons and expects to enhance that number in coming years. The company has a total workforce of more than 12,000. The companys operation in the United States began in 1975 when Falcon Jet Corp (a joint venture between Dassault Aviation and Pan Am) purchased Little Rock Airmotive in Little Rock, Arkansas. FedEx founder Fred Smith originally used Little Rock Airmotive as a completion center for the fleet of Falcon 20 transport aircraft initially used to launch his overnight delivery service. Dassault Falcons connection with Arkansas progressed during the next several decades and, most recently, in 2008, the company completed a $20 million expansion at its Little Rock facility to nearly 900,000 square feet with a new production and design area, additional warehouse space and a new flight line. Along with the Little Rock facility, the company now has three other locations in the United States: Teterboro, New Jersey; Wilmington, Delaware; and Reno, Nevada. In May 2013, Dassault Falcon, with Arkansas Governor Mike Beebe and other dignitaries present, announced plans to increase the size of its completion center in Little Rock to accommodate the spate of new Falcon orders received by the company. During the next three years, Dassault Falcon intends to invest $60 million in new construction and the refurbishment of existing facilities. Site preparation for the expansion will commence in early 2014, and construction will take place through the early part of 2016. While
Jacksonville
In March 2013, Embraer launched its 40,000-square-foot manufacturing hanger at Jacksonville Florida International Airport, where the company will assemble aircraft for the U.S. Air Forces Light Air Support program. Under this contract, the companys first for the supply of high-tech equipment and services to the U.S. Air Force, Embraer will deliver 20 Embraer A-29 Super Tucano aircraft, as well as ground training devices, pilot and maintenance training and logistics support. Expanding its U.S. manufacturing presence was a decision spurred by the importance of the American market to the company. In fact, Embraer CEO Fred Curado commented, [S]ome 50 percent of our executive jet deliveries go to the United States and more than 60 percent of the aircraft content comes from U.S. suppliers and industrial partners, so this is a natural step forward to the benefit of our customers.53 Further confirming this trend was news in August 2013 that Embraer termed a major milestone in its history,54 the delivery of the first of up to 125
The Dassault Falcon Family. Photo courtesy of Dassault Falcon Media Center.
the expansion will increase the plants square footage by 250,000 square feet, the facilitys total footprint will rise to 1.25 million square feet. The new space will be dedicated to production and completion activities, while refurbishment will focus on the cabinet, upholstery and headliner shops along with upgrades to older hangars at the location. The new facility will incorporate state-of-the-art technologies with advanced tools and processes that shorten completion time and increase quality and accuracy. In terms of the latest technologies, in 2010, Dassault Falcon received approval from the Federal Aviation Administration (FAA) for the use of 3D data during the completion process, making the company the first OEM to receive this certification for both 3D type design and completion. Deploying 3D technologies not only allows Dassault Falcon to enhance the quality of the final product but also facilitates customers ability to visualize the final configuration of the aircraft. In terms of incentives to secure Dassault Falcons commitment to Little Rock, Arkansas, the Arkansas Economic Development Commission had to compete very aggressively with several other cities (Greensboro, North Carolina, for one). Retaining Dassault Falcon in Arkansas ensured that the jobs currently at the company will remain in the state. In April 2012, Arkansas Business reported employment of 1,700 at Dassault Falcon, confirming the
company as the states top aeronautics firm in terms of employment. The state committed three types of incentives to the Dassault Falcon expansion: The create rebate, a cash rebate equal to 3.9 percent of the retained jobs and any new payroll expenses for 10 years; Sales tax refunds on building materials, taxable machinery and equipment associated with the expansion project; and $2 million from the Governors Quick Action Closing Fund to be directed toward the cabinet and upholstery shop renovations and new building construction; In addition, the Little Rock Airport Commission provided an incentive package totaling $43 million, primarily as rent credits to be used over the next 40 years.
Rolls-Royce
One of the most prestigious and recognizable name brands in the world, Rolls-Royce has had a presence in the United States for more than 100 years.56 Since opening its first American office in 1906, Rolls-Royces customer base includes civil and military aircraft manufacturers; commercial airlines; corporate and regional operators; public utilities; independent power producers; nuclear power plants; pipeline operators; and on-and-off shore oil pro-
so companies including Rolls-Royce, Canon, and Newport News Shipbuilding) focused on cutting-edge developments in advanced manufacturing research and technology. The advantage of the CCAM being in close proximity to these advanced manufacturers was that they could tap the research and development skills of multiple university researchers in relevant disciplines and procure their services for relevant projects. The steady supply of mechanical engineers provided by the nearby universities also was a huge incentive for these companies to establish operations near the CCAM in Prince George County. In November 2012, Rolls-Royce announced that it was building a second advanced manufacturing facility alongside its current rotatives factory at Rolls-Royce Crosspointe. This $136 million facility, named the Advanced Airfoil Machining Facility (AAMF), is expected to be fully operational in late 2014 and generate 140 new, highly skilled jobs. The 90,000-square-foot AAMF facility will manufacture turbine blades and nozzle guide vanes for a number of Rolls-Royce aircraft engines, including the Trent 900, Trent 1000 and Trent XWB engines. These advanced aircraft engines are used on some of the most sophisticated aircraft in the world, including the Boeing 787 Dreamliner, Airbus A380 and Airbus A350.
Trent XWB engine at the Stennis Space Center pre-shop in Mississippi. Photo courtesy of Rolls-Royce.
ducers. From its North American headquarters in Reston, Virginia, the company provides corporate direction and management support for the array of business lines and more than 7,700 employees at 68 locations across the United States and Canada. In terms of manufacturing, assembly and test facilities, Rolls-Royce operates 15 facilities in 10 states, including Louisiana, Mississippi, Texas and Virginia in the SLC and California, Indiana, Maryland, Massachusetts, Ohio, and Washington outside the Southern region.
Mississippi
In October 2013, Rolls-Royce announced that it had launched its second engine test stand at NASAs Stennis Space Center in Hancock County, Mississippi. The test stand is located at the Rolls-Royce Outdoor Jet Engine Testing Facility and represents a $50 million investment that will create 35 new high paying, high-tech jobs. Originally opened in 2007, this site is one of three such Rolls-Royce test sites in the world and conducts noise, crosswind, thrust reverse, cyclic and endurance testing on all current Rolls-Royce engine types. In addition, the company will use the site specifically to test a number of its latest civil aircraft engines, such as Trent 1000, which powers the Boeing 787 Dreamliner, and the Trent XWB, which powers the Airbus A350WXB. In terms of economic incentives, the Mississippi Development Authority (MDA) helped facilitate the project by providing assistance for infrastructure improvements through the Hurricane Katrina Disaster Recovery Community Development Block Grant program, as well as assistance for construction and training activities through the Momentum Mississippi Incentives program. MDA also provided assistance for workforce training. In addition, Hancock County is providing logistical assistance for the project.
Virginia
In 2006, there was competition among a number of states, particularly several SLC states, to convince Rolls-Royce to set up a manufacturing and research rotatives facility to produce discs for the companys advanced civil aerospace engines. After stiff competition, Virginia was declared the winner and Rolls-Royce Crosspointe, the companys advanced manufacturing facility, was set up in Prince George County, some 25 miles south of Richmond. The companys production record at its Crosspointe location was stellar, and it is now considered the groups largest and newest advanced manufacturing and research campus in North America. The innovative dimension about this economic development announcement was the state of Virginiaacting as an intermediaryhelping to set up the Commonwealth Center for Advanced Manufacturing (CCAM) in the vicinity of the Rolls-Royce Crosspointe campus. The 60,000-square-foot CCAM facility is a collaboration of government, universities (Virginia State University, Virginia Tech and the University of Virginia) and cross-industry business partners (a dozen or
Recent Aeronautic DeVelopments in Selected SLC States
Photo courtesy of Boeing MediaRoom
he preceding sections provided details on the reasons for aeronautics companies to locate to the SLC, a state-by-state breakdown of selected aeronautics industry statistics with a focus on the SLC states, SLC state efforts to tailor their workforce development programs to attract and better serve the aeronautics companies and developments related to selected commercial aircraft manufactures in the South. This final section provides glimpses of aeronautics-related information from selected SLC states.
bly, the state is home to aeronautics companies from more than 30 countries and hosts the second largest research and technology park in the country (and the fourth largest in the world) in Cummings Research Park in Huntsville. The July 2012 Airbus announcement was a major achievement for the state, and state officials now are focused on ensuring that the timeline laid out by Airbus is met and the many supplier companies involved in supporting the Airbus operation relocate to the state. In fact, Alabama Department of Commerce Secretary Greg Canfield noted that when you consider that one assembly line job with Airbus could spur as many as three to four additional when related industry comes to support the companys needs, this means Alabama will be part of a major aerospace sector.58 Both Secretary Canfield and Alabama Governor Robert Bentley have expressed their commitment to building relationships with companies that could serve as suppliers and vendors to Airbus. To accomplish this goal, these high-level state officials have made numerous visits to major international aviation events such as the Hamburg Aviation Forum and the Paris Air Show. In December 2013, Alabama, along with a number of other states, announced that Boeing officials had been in contact regarding preparing a bid for the new Boeing 777X production facility. Huntsville, where Boeing already has a 50-year presence (with 2,400 employees working for the company in different capacities), would have been the Alabama location for the proposed facility. Local officials cited the role played by various Army aviation operations (such as the Army Aviation Center and the Army
Alabama
Alabama promotes its long and distinguished history with the aerospace industry, citing the Wright Brothers establishing their first civilian flight school in Montgomery in 1910, to NASAs work on the Saturn launch vehicles for the Apollo moon program in Huntsville in the early 1950s, to the latest Airbus announcement in July 2012.57 As of November 2012, there were as many as 500 aerospacerelated companies operating in Alabama, particularly in the northern part of the state, and the latest announcement by Airbus about its first American manufacturing facility in Mobile is expected to boost the industrys presence significantly in the southern part of the state. It is estimated that more than 83,000 Alabamans work in aerospace-related companies across the state, including Airbus, Boeing, Northrop Grumman, Continental Motors, United Launch Alliance, PPG Aerospace, WestWind Technologies, Sikorsky, EADS, Raytheon, Goodrich, SAIC, GKN Aerospace, Lockheed Martin, GE Aviation, BAE System, ST Aerospace Mobile, Aerojet and Teledyne Brown Engineering. Nota-
Unmanned Aerial Vehicle Center) in the locality as important attributes along with several othersa ready supply of experienced technical experts such as engineering systems analysts and systems integration analysts; cost of living; quality of life; and workforce training programs crafted by the stateas important considerations for Boeing. However, as mentioned earlier, in January 2014, Boeing workers conducted a second vote and agreed to terms laid out by the company, a fact that resulted in Boeing confirming that it would carry out final assembly of the new 777X in the Puget Sound area. In touting Alabama as an aeronautics hub, Governor Bentley and Secretary Canfield emphasized the states workforce development program and the customized, onlocation training provided to the individual companies. They also promoted the states Supplier Support Network (SSN), a one-stop shop that helps companies comprehend regulation, permitting, workforce recruitment, training opportunities and more. The SSN also assists companies in identifying potential sites for their operation and establishing business operations. The goal of this particular effort is to attract more jobs to the state by streamlining the logistical and administrative hurdles faced by aeronautics companies in setting up their operations.
launches from NASAs Kennedy Space Center (at Cape Canaveral), to its role as the major hub for air travel to and from Latin America, to South Florida hosting one of the worlds largest flight training programs (Airbus, Boeing and Pan Am International Flight Academy all operate FAA-approved airline flight simulators within a three-mile radius of each other),61 and hosting aircraft manufacturers of all types of aircraft and aircraft components along with maintenance, repair and overhaul, Florida promotes itself as the nations aviation leader. South Floridas role as one of the premier pilot instruction centers in the world was cemented by the fact that Boeing, Airbus and the Pan Am International Flight Academy all operate pilot training academies in close proximity to each other.62 While there are locations with smaller clusters of flight training schools in other parts of the United States and the world, the presence of these three industry juggernauts in South Florida thrusts the region to the forefront as the undisputed industry leader in this category. The following facts are salient about this development: In August 2013, Boeing announced the launching of its Dreamliner 787 customer training center in Miami, the site of the companys largest commercial aviation training campus. While the center supports more than 100 jobs, the latest expansion effort will add nearly $180 million in training assets. Boeing expects to have a total of 17 simulators at the facility, the companys largest training facility in the world, and already has moved two full-motion Dreamliner 787 flight simulators from Seattle to the Miami training center. Just east of this Boeing training academy is Airbus 110,000-square-foot flight and maintenance center, the only one in the Americas and one of only five in the world. Pan Am International Flight Academy, the original Pan American Airways training division, features full-motion flight simulators for 31 types of jet aircraft ranging from the Airbus A330 to the McDonnell-Douglas MD80 to the Boeing 747, 767 and 777. In addition, in July 2013, Tokyo-based ANA Group, the parent company of All Nippon Airways, acquired the Pan Am International Flight Academy for $139.5 million. Analysts expect the acquisition by ANA to result in the Academys presence expanding significantly in Asia. Another important piece in Floridas aviation prowess is the role played by Embry-Riddle Aeronautical University in Daytona Beach. An estimated 25 percent of all professional pilots in the United States received their four-year degrees in aeronautical science at Embry-Riddle.63
Arkansas
Along with Dassault Falcons impressive operation in Little Rock, Arkansas boasts several dozen aeronautics-related companies, with each employing a multitude of workers.59 For instance, Lockheed Martins facility in Camden, Arkansas, employs 600 workers. Hawker Beechcrafts Little Rock operation employs 450 workers and manufactures business, special mission and trainer aircraft along with designing, marketing and supporting aviation products and services for businesses, governments and individuals across the globe. Similarly, Ducommun LaBarge Technologies Huntsville and Berryville facilities have about 380 employees and manufacture cables, electronics and electromechanical systems for the aerospace and defense industries. Triumph Fabrications, another major aeronautics player located in Hot Springs, employs nearly 345 workers and engages in metal fabrication and sub-assemblies for the aerospace industry.
Florida
Florida is another SLC state with a dominant aviation sector. Not only does the state rank second nationally in terms of the number of aviation-related establishments (more than 2,000), the entire industry employs some 87,000 workers across the state.60 With its 50-year legacy of space
Some of the worlds largest aeronautics and aeronautics-related companies, from Boeing to Northrup Grumman, to Rockwell Collins, to Honeywell, to Lockheed Martin, have thriving operations in the state too. As demonstrated earlier, aviation-related products from Florida rank among the states top exports, and Mr. Manuel Mencia, the senior vice president of International Trade at Enterprise Florida (the states economic development agency), indicated in November 2013 that exports of aviation-related equipment comprised more than $6 billion of the nearly $90 billion in total state merchandize exports.64 Figure 2 provides insight into the aeronautics and aerospace cluster that is scattered throughout the state.
In recent years, Floridas Department of Transportation has made a concerted effort to promote the state as a logistics and freight hub for the region, the nation and the globe. The states aviation assets are a key component of this effort, and it was estimated that the sector produced approximately $114.7 billion in annual economic activity in the state. Previous sections of this report highlighted some of these activities, such as the expansion efforts of Embraer, but there are several other aeronautics companies that are in the midst of expanding their Florida operations: In April 2013, Northrop Grumman revealed that it will create an additional 400 new jobs at its St. Augustine location (in St. Johns County) by expanding its Aircraft
Figure 2 Floridas Aviation & Aerospace Cluster
Source: Florida Aviation Aerospace Market Brief, Enterprise Florida, http://www.eflorida.com/IntelligenceCenter/download/aa/MB_Aviation_ Aerospace.pdf (accessed December 6, 2013)
Integration Center of Excellence.65 This expansion will result in an $80 million additional economic impact to the area. The Center will continue to build and integrate aircraft and aircraft subsystems. In return, Northrop Grumman secured almost $3 million in incentives in the form of impact and other fee reimbursements, utility connection fees and county taxes during the next four years. The company also will receive a job creation grant equal to a 20 percent match paid to the states target industry program. In May 2013, Midair S.A., an international aviation company headquartered in Lausanne, Switzerland, publicized that it will set up a significant U.S. aircraft maintenance operation in Melbourne.66 While the Midair investment is expected to total $28 million, the 180,000-square-foot facility will have a workforce of 300 to 450 within three years. The companys operation at Melbourne International Airport will encompass two hangar bays designed to accommodate Boeing 747-400 aircraft for interior reconfigurations, as well as extensive maintenance, repair, painting and overhaul functions. In November 2013, Floridas commitment to expanding its aeronautics sector was reiterated by its pavilion at the 2013 Dubai Air Show, one of the worlds preeminent gatherings of aerospace manufacturers and exporters. There were 11 Florida companies represented at the Dubai Air Show (from the family-run Global Turbine Parts based out of Jupiter, Florida, that specializes as a broker and supplier of engine parts, to Bristow Academy, a helicopter flight school in Titusville) competing for international business opportunities. In December 2013, the city of Pensacola announced that ST Aerospace, the Singapore-based company that services aircraft manufacturers like Boeing and Airbus, would establish a large, aircraft maintenance, repair and overhaul operation inside Pensacola International Airports Commerce Park.67 Clinching the deal with ST Aerospace was an elaborate 18-month negotiation process involving a $14 million property acquisition grant by the Florida Department of Transportation; tax rebates by the city and county; and funds from the states Oil Spill Recovery Act Fund (a fund created to help Florida Panhandle counties recover from the 2010 Deepwater Horizon Oil Spill). In turn, ST Aerospace has committed to creating a minimum of 300 new jobs in the Pensacola area during the next few years. While the presence of ST Aerospace will elevate Pensacolas image in the aerospace industry, the company is expected to be a parts supplier to the Airbus facility being built in nearby Mobile, Alabama.
Georgia
Georgia is another SLC state with a thriving aeronautics sector positioned to grow even larger in the coming years.68 In January 2013, the Georgia Department of Economic Development released an extensive study on the economic impact of the aerospace industry in the state and its conclusions reinforced the tremendous importance of the sector to the states overall economy. (The report presented data gathered for calendar year 2011.) As enumerated in the study, the states aeronautics sector has multiple components that engage every sector of the states economy in complex ways. The following bullet points highlight some of the more salient findings: The industry employed 88,873 direct workers who were paid nearly $8.4 billion in wages and salaries. Research revealed that the wages of the states aerospace workers were considerably higher than Georgias average wage: $74,959, or 66 percent higher than the states overall average wage rate of $45,090 during the review period. (Both these wage rates excluded benefits. When benefits are factored in for aerospace workers in Georgia, the average wage rate was $94,435.) The employment ripple effects created by the sector in Georgia was significant and, in 2011, each job in the aeronautics sector supported 2.72 additional jobs in the state, generating an income multiplier of 1.88. More specifically, as a result of the multiplier effect, an additional 153,171 indirect and induced jobs were supported by the sector. In total, the 242,044 jobs supported by the states aeronautics industry amounted to an impressive 5 percent of the states total employment and contributed $23 billion, or nearly 6 percent, to the gross state product. While the wages and salaries of Georgias aerospace workers created an economic output of $30.7 billion in 2011, the wages and salaries of the indirect and induced jobs generated earnings of $7.4 billion and an economic output of $20.3 billion. In terms of the total economic output of the sectors wages and salaries, it stood at a staggering $50.9 billion. The industry generated an estimated $1.6 billion in revenues for the state budget in calendar year 2011, approximately 10 percent of the states total tax revenues in fiscal year 2012 (July 1, 2011 to June 30, 2012). When the costs associated with providing services to all employees were deducted from these revenues, the net contribution of the aeronautics industry to state revenues in 2011 was a stunning $874 million.
Georgia aerospace companies continued to aggressively market their products at a range of aviation forums and airshows and, in November 2013, a number of Georgia companies participated in the aforementioned Dubai Air Show. For instance, Aventure Aviation, a 13-year-old company in Peachtree City that sells replacement airplane parts, aircraft rentals and maintenance services across the globe, continued its record of attending the Dubai Air Show every year in the last decade and recently established an office in Dubai in 2012. This decision helped Aventure enhance its service capabilities in the Middle East and North Africa, a move that has led the companys sales in the region to jump 300 percent.
ence, Kentucky, just five miles south of CVG, with more than 150 employees; and Indy Honeycomb, manufacturer of metal parts for aircraft engines and other industrial applications, will invest nearly $1 million and create 13 new jobs in Northern Kentucky.
Mississippi
A little-known fact is that Mississippi has a long history in the aviation sector, particularly in the aeronautics composites field.70 Specifically, the Raspet Flight Research Laboratory (established in 1948) at Mississippi State University in Starkville is the largest university flight lab in the country and includes a complete aircraft manufacturing facility with more than 90,000 square feet. The Raspet facility features a precision machine shop, a 10- by 55-foot autoclave (a pressure vessel used to process parts and materials which require exposure to elevated pressure and temperature), atmospherically controlled lay-up and cutting rooms, as well as aircraft assembly and structural test rooms. In addition, the University of Southern Mississippis School of Polymers/Mississippi Polymer Institute focuses on the development of high performance composites and their integration into aircraft production. Along with GE Aviations composites factory in Ellisville, Mississippi, and the Rolls-Royce engine test stand in Hancock County, Mississippi, the state has a number of additional aeronautics companies: Stark Aerospace, Lockheed Martin, Northrop Grumman, Raytheon, Eaton Aerospace, Aurora Flight Systems, Alliant Technicsystems (ATK) and American Eurocopter. A number of these companies either located or expanded their operations in Mississippi in the aftermath of legislation enacted in 2010, i.e., the states Aerospace Initiative Incentives Program. This legislation included a 10-year exemption from income and franchise taxes, as well as a sales and use tax exemption for the startup of the aerospace facility, and research, development and training services for the company. In return, the company must invest a minimum of $30 million and create at least 100 full-time jobs. Spurred by the 2010 legislation, two companiesAmerican Eurocopter and Alliant Technicsystems (ATK)recently expanded in the state. American Eurocopter now assembles the U.S. Armys UH-72A Lakota (a twin-engine helicopter) and the AS350-B2 and -B3 (both single-engine light helicopters) at a facility in Columbus, Mississippi. The companys 325,000-square-foot plant employs 355 workers and includes an assembly hall, flight line, paint shop, warehouse, administrative offices, flight operations and flight test en-
Kentucky
Kentucky continues to promote its assets in the aviation sector as a mechanism to attract manufacturing; maintenance, repair, and overhaul/operations; and logistics operations to the area around the Cincinnati/Northern Kentucky International Airport (CVG).69 Along with a competent workforce that includes engineers, engine mechanics, aircraft structure assemblers, and various repair occupations, the Commonwealth also offers more than 1,000 acres of available land, some with direct taxiway access, in and around CVG. In terms of workforce development for the Northern Kentucky region, Cincinnati State Community and Technical College offers several technical degrees and certification programs in the aviation industry, including the Aviation Maintenance Technology Degree; Aviation Mechanics Airframe Certificate; Aviation Mechanics Powerplant Certificate; and Avionics Certificate. Recently, there have been a number of notable aeronauticsrelated companies that have both set up and expanded their operations in the vicinity: Global shipping company DHL continues to expand its hub at CVG, one of DHLs three Global Super Hubs, including a recent expansion project which created $47 million in capital investment and up to 280 full- and parttime jobs; Messier-Bugatti, manufacturer of brake discs and wheels for aircraft, recently expanded its operation in Northern Kentucky, creating 48 new jobs and investing $41 million at its current facility; TIMCO Aviation Services, one of the largest aircraft maintenance providers in the world, located its regional aircraft services division at CVG in 2012, creating 165 new jobs and investing $3.4 million at this new facility; Southern Air announced in early 2013 the relocation of its headquarters operation from Connecticut to Flor-
gineering. In terms of training workers for the facility, American Eurocopter works with nearby East Mississippi Community College in Scooba, Mississippi, providing training courses in electrical systems, avionics, sheet metal and mechanics. The second company, Alliant Technicsystems (ATK), will make composite stringers and frames for the Airbus A350 in Iuka, a city in Tishomingo County, Mississippi. ATKs Iuka factory involves a $175 million investment and hundreds of new jobs in the area.
opportunities. As Steve Sperry, the companys vice president for business development noted, the deals that get cut in Paris mean good jobs back home.72 (The company has manufacturing facilities in Perryville, St. Marys and Ste. Genevieve).
Texas
Texas has one of the most vital aviation sectors in the country, with establishments that manufacture aircraft, missiles and space vehicles or their component parts such as propulsion systems or auxiliary units.73 In addition, Texas capacity in the sector includes activities such as prototyping, major modification and overhauling of aerospace vehicles. In 2012, while there were 184 firms immersed in aeronautics and aerospace in Texas, they employed 52,759 at an average annual wage of $85,540, a notable number. Total capital investments for the year totaled $380 million, with the value added per employee reaching $215,431. The value of shipments for the year from Texas companies amounted to $14.5 billion. In terms of aerospace exports from Texas, in 2012, these totaled $5.6 billion, an increase of nearly 10 percent compared to 2011. In fact, the sector was the states 15th largest export sector, primarily flowing to Canada, United Kingdom, Mexico, Brazil and Singapore. The major aerospace manufacturing companies in Texas in 2013 included: Bell Helicopter Textron in Fort Worth and Amarillo, manufacturing helicopters and tilt rotor aircraft; Lockheed Martin in Fort Worth, manufacturing military aircraft; Vought Aircraft Industries in Dallas, manufacturing aircraft parts; L-3 Integrated Systems in Waco, manufacturing aircraft parts and systems; and BAE Systems in Austin and Fort Worth, manufacturing aircraft parts and systems. Other notable news related to the sector in Texas in 2013 included Raytheons decision to relocate the group headquarters of its Space and Airborne Systems business unit from California to McKinney, Texas. Raytheon is one of the states largest employers and has approximately 8,000 workers in the North Texas region. Also, in 2012, Fort Worth-based Bell Helicopter Textron initiated work on a new $235 million global headquarters facility. The company also embarked on a $27 million expansion at its Amarillo manufacturing location, where a new commercial helicopter will be constructed.
Missouri
Missouri aggressively continues to pursue a variety of aeronautics projects, exemplified in December 2013 by the states efforts to convince Boeing to build its new 777X aircraft in the state.71 While Missouri was one among nearly two dozen states that reportedly had either contacted Boeing or been contacted by Boeing in the aftermath of the failed talks to build the facility in Puget Sound, Washington, Missouri was the only state where the governor summoned the General Assembly into special session to devise an economic incentive package for the company. On December 10, 2013, Missouri Governor Jay Nixon signed into law a multi-year, $1.7 billion tax incentive package to lure Boeings 777X production to the state. While the potential Boeing site would have been at the edge of the airport in St. Louis County, the tax credits would have been worth up to $150 million annually over 23 years, provided the company met its target of 8,000 new jobs. The legislation attracted broad, bi-partisan support in the General Assembly and lawmakers swiftly approved the incentive package during a one-week special session. Soon after the state action, the St. Louis County Council unanimously approved a local package that would have added up to $1.8 billion more in tax incentives to the overall offer. Even though Boeing workers conducted a second vote and agreed to terms laid out by the company in early January 2014, the response of Missouri policymakers (executive and legislative) to act extremely expeditiously to secure this Boeing project was striking. Missouri has been active participating in the different global air shows and, in June 2013, Governor Nixon led a delegation of 14 Missouri companies to the Paris Air Show. Among the companies that were on the delegation was St. Louis-headquartered Sabreliner, a company that installs helicopter interiors and electronics. Given that at least 30 percent of Sabreliners business in the last few years has originated overseaswith a number of foreign governments and other international customers ranking as their clientsthe company was intent on expanding business
Conclusion
s demonstrated in the preceding sections, in a manner not greatly dissimilar to the development of the automotive industry in the Southern region in the last 30 years, the aeronautics sector increasingly is locating, relocating and expanding its operations in and to the South. While the aeronautics sector has been an important element in the economic profile of the South for more than a century, whether in relation to the Wright Brothers launching Kitty Hawk from the North Carolina coast in 1903, Mississippi State University establishing the largest university flight lab in the country in 1948, or Huntsville, Alabama, playing a critical role in the Apollo moon program in the 1960s, it is in the last decade that the region has begun usurping the role played by states such as California, Washington and Kansas in the nations aviation foundation. Increasingly, from aviation behemoths like Boeing (South Carolina) and Airbus (Alabama), to smaller aircraft manufacturers like Gulfstream (Georgia) and Embraer (Florida), to aviation parts suppliers like L-3 Integrated Systems (Texas) and Messier-Bugatti (Kentucky), a multiplicity of these manufacturers have found it profitable to either set up or expand their operations in the SLC region. Very often, these moves involved a diversion away from other parts of the United States that have dominated the nations aviation sector for generations. In fact, announcements by Boeing in mid-December 2013 that it would be shifting hundreds of high paying research jobs to Alabama, Missouri and South Carolina, and away from Washington and California, as part of a restructuring of its American
research operations during the next two years, is symptomatic of a broader trend underway in the industry.74 In fact, Boeings research restructuring will add 300 to 400 employees each in or near St. Louis, Missouri; Huntsville, Alabama; and North Charleston, South Carolina. There are multiple reasons for the Southern states looming as attractive alternatives to these aviation companies, both large and small, both American and non-American; it is important to stress that it is not just a single factor that has been propelling this move toward the SLC region. One of the most important is the focus by Southern states in creating customized workforce development programs to provide skilled candidates for these technologically advanced manufacturing facilities. In almost every instance, the states economic development agency works closely with the aeronautics company, along with an institute of higher education (community or technical college), to tailor training programs to the companys exact specifications. A good example is the move by Spirit AeroSystems to Kinston, North Carolina, and the collaboration by state and local government officials in devising a new Aerospace Manufacturing Readiness program at nearby Lenoir Community College based on Spirits workforce requirements. Southern states also proffer attractive incentive packages including a variety of tax breaksto lure these aeronautics companies.For instance, Airbus July 2012 announcement that it would be building a $600 million assembly plant in Mobile, Alabama, was aided by a state and local government incentive package of nearly $159 mil-
Embraer Legacy 500. Photo courtesy of Embraer Media Center.
lion. Similarly, when Gulfstream publicized its second major expansion in five years ($500 million over seven years) in Savannah, Georgia, in late 2010, the state offered about $29.7 million in statutory incentives, including state tax credits and jobs training. However, as experts have documented, [A] lot of companies are not heavily focused on incentives. They are heavily focused on labor, partnerships, and relationships they might have in the community at large. Incentives are something they think about, but they dont obsess about it.75 Another important consideration in the economic incentive packages provided by state and local governments is the clawback provision, a staple in many current economic incentive packages. For the various incentives Boeing received from South Carolina, the company is subject to strict clawback provisions, including the up-front funds provided by South Carolina, in the event that the company does not meet its end of the bargain; in addition, most of the tax incentives are performance-based and will not be granted unless the company actually invests the money and creates the necessary jobs. In sum, policymakers are extremely prudent about initiating extraordinary measures to ensure that companies receiving taxpayer funds through these incentive programs accomplish all the agreed upon requirements, including capital investment and employment numbers, within the stipulated time. Another factor driving the move involves the economies of scale and the surge of additional benefits created by the cluster effect, i.e., the growing number of aeronautics plants and hundreds of parts suppliers in close proximity
to each other permitting the aircraft manufacturers to gain a range of advantages. The considerable boost to the profile or image of a city, or even a state, involved in attracting a major aeronautics company, such as an Airbus or RollsRoyce or Gulfstream, remains incalculable too. The halo effect generated by landing one of these prestigious companies is a huge benefit for the locality not only in direct economic terms but also as a strong intangible effect. As aeronautics companies progressively look to the Southern states to establish or expand their manufacturing operations, it is incumbent on Southern state policymakers to initiate specific policy measures to enhance the attractiveness of the region. Since jobs related to these aeronautics companies involve high-tech manufacturing, it is likely that the pay scale and salary structures are going to be at the higher end of the spectrum. In order to ensure that the region continues to be increasingly competitive, not only vis--vis other states in the United States, but also across the globe, it is imperative that SLC policymakers continue to make essential long-term investments into education and infrastructure. Failure to make these vital investments will erode the regions ability to remain competitive for these increasingly sophisticated technical jobs. Efficient and smooth running transportation networks, spanning the entire multimodal spectrum, also remain critical for a regions competitiveness. Given the success of Southern states in becoming the nations most successful automobile region, it is entirely plausible that, in the coming decade, the aeronautics sector in the SLC region also will take off and function as a robust and resilient economic powerhouse.
Endnotes
1 Shared Wright Brothers Legacy Unites NC and Ohio, News & Observer, October 23, 2013. 2 Los Angeles County Economic Development Corporation, The Aerospace Industry in Southern California, August 2012, http://laedc.org/reports/AerospaceinSoCal_0812.pdf, page 14. 3 States Sweeten Jet Makers Pot, The Wall Street Journal, December 14, 2012. 4 Boeing Workers Approve 8-Year Contract Extension, The New York Times, January 4, 2014. 5 Holloway, Amy and McCallum, Ed, Aerospace and Aviation: Finding Opportunities Amid Uncertainty, Trade and Industry Development, May 21, 2013, http://www.tradeandindustrydev.com/industry/aerospace-defense/ aerospace-and-aviation-finding-opportunities-amid-7846. 6 Ibid. 7 EADS to Build U.S. Assembly Line for Airbus 320, The New York Times, July 2, 2012. 8 States Sweeten Jet Makers Pot . . . 9 Advanced Training for Todays Auto and Aerospace Workers, Area Development, 2013, http://www.areadevelopment.com/stateResources/ Alabama/AIDT-advanced-aero-auto-workforce-training-282782917.shtml. 10 Ibid. 11 Mercedes Delgado, Michael E. Porter and Scott Stern, Clusters, Convergence and Economic Performance, Harvard Business School Institute for Strategy and Competitiveness, March 11, 2011. 12 Jorge Niosi and Majlinda Zhegu, Aerospace Clusters: Local or Global Knowledge Spillovers, Industry and Innovation, Vol. 12, No. 1, 1-25, March 2005. 13 http://www.boeing.com/assets/pdf/aboutus/govt_ops/state_cards/card_SC.pdf. 14 Boeings Upstate Connection Strong, GSA Business, http://www.gsabusiness.com/news/39900-boeing-rsquo-s-upstate-connection-strong?rss=0 15 Airbus: Powerful Engine for Growth in Mobile Region, 2013 Business Facilities Rankings Report, July/August 2013, http://businessfacilities.com/baton-rouge-named-no-1-metro-for-economic-growth-potential-in-business-facilities-9th-annual-rankings-report/.
Photo courtesy of Honda Aircraft Company
16 LMI Aerospace Grows, Adds Jobs in Savannah, Atlanta Business Chronicle, July 10, 2013. 17 Boeing Announces $1Billion SC Expansion, The USA Today, April 9, 2013, http://www.usatoday.com/story/money/business/2013/04/09/ boeing-expansion-south-carolina/2066469/. 18 Alabama Gives Airbus $158 Million in Incentives, The Montgomery Advertiser, July 3, 2012. 19 Who Wants A Union? Not Southern Autoworkers, It Seems, The Los Angeles Times, March 29, 2011, http://articles.latimes.com/2011/ mar/29/business/la-fi-0329-autos-unions-20110329 and UAW battles Nissan over union at Mississippi plant, The Tennessean, October 14, 2013, http://www.tennessean.com/article/20131015/BUSINESS03/310150023/2263/BUSINESS03. 20 States Sweeten Jet Makers Pot . . . 21 Holloway, Amy and McCallum, Ed, Aerospace and Aviation: Finding Opportunities Amid Uncertainty . . . 22 Made in America: Why Manufacturing Will Return to the U.S., Boston Consulting Group, http://www.bcg.com/documents/ file84471.pdf; Why Our Community Colleges Are Falling Behind, The Washington Post, May 23, 2013; Stubborn Skills Gap in Americas Workforce, The New York Times, October 8, 2013; and Manufacturing Leaders Launch Task Force to Tackle Workforce and Competitiveness Issues, National Association of Manufacturers (NAM), October 3, 2013, http://www.nam.org/Communications/ Articles/2013/10/Manufacturing-Leaders-Launch-Task-Force.aspx. 23 The Perfect Storm in Aerospace Manufacturing, Area Development, 2013, http://www.areadevelopment.com/Aerospace/2013-Auto-AeroSite-Guide/aerospace-manufacturing-skilled-labor-scarcity-272981241.shtml. 24 Ibid. 25 Testimonials, readySCTM, http://www.readysc.org/testimonials.htm (accessed on November 19, 2013). 26 GKN Aerospace Cites Workforce, Training, In Decision to Open South Carolina Plant, GSA Business, November 28, 2011, http://www.gsabusiness.com/news/41795-gkn-aerospace-cites-workforce-training-in-decision-to-open-s-c-plant. 27 Alabama Wooed Airbus as Executives Were Skeptical of Deep South, Bloomberg, April 18, 2013. 28 5 Schools Form Missouri Aerospace Training Consortium, The Missourian, December 4, 2013.
29 The Perfect Storm in Aerospace Manufacturing . . . 30 http://www.readysc.org/downloads/readySC%20Success%20Sheet_Oct2013.pdf. 31 Boeing South Carolina Ready to Roll Out Its First Dreamliner, The Post and Courier, April 23, 2012. 32 Fastest-Growing Location For Aerospace Heads To Paris Air Show, The Charleston Regional Development Alliance, June 5, 2013, ttp://www.crda.org/news/blog/fastest-growing-location-for-aerospace-heads-to-paris-air-show/#sthash.QIevnn1I.dpuf. 33 Norris LEAP Law to Educate and Employ Tennesseans, Tennessee Senate Republican Caucus, February 18, 2013, http://www.tnsenate.com/_blog/Newsroom/post/Norris_%E2%80%9CLEAP%E2%80%9D_Law_to_Educate_and_Employ_Tennesseans/. 34 Ibid. 35 Ibid. 36 Information regarding the Airbus deal in Mobile, Alabama, was based on the following sources: Alabama Gives Airbus $158 Million In Incentives, The Montgomery Advertiser, July 2, 2012; EADS to Build U.S. Assembly Line for Airbus A320, The New York Times, July 2, 2012; Coming to America, The Economist, July 7, 2012; European Aerospace Giant Airbus Announces It Will Build Its 1st US Assembly Plant In Alabama, The Washington Post, July 2, 2012; Alabama Wooed Airbus as Executives Were Skeptical of Deep South, Bloomberg, April 18, 2013; $260 Million Bond Issue Secured for Airbus Final Assembly Line in Mobile, al.com, August 19, 2013. 37 European Aerospace Giant Airbus Announces It Will Build Its 1st US Assembly Plant In Alabama, The Washington Post, July 2, 2012. 38 Airbus Nets Order for 40 Jets from Delta, The Miami Herald, September 4, 2013. 39 Alabama Wooed Airbus as Executives Were Skeptical of Deep South, Bloomberg, April 18, 2013. 40 All the information in the ensuing Boeing section is extracted from the following sources: Boeing Rolls Out First SC-Made Plane, The Charlotte Observer, April 28, 2012; S.C. Plant Builds Jet From Start to Finish, The Atlanta Journal-Constitution, April 28, 2012; Boeing South Carolina Ready to Roll Out Its First Dreamliner, The Post and Courier, April 23, 2012; S.C. Governor Signs Incentive Package for Boeing, The USA Today, November 1, 2009; Boeings Whopping Incentives, The Post and Courier, January 17, 2010, and March 23, 2012; Boeing Faces More Dreamliner Woes, The USA Today, September 26, 2013; S.C. House Approves $120M for Boeing, The Charlotte Observer, April 18, 2013; Boeing South Carolina Will Design 737 MAX Part, News & Observer, May 3, 2013; States Salivating for Boeing 777X Feast, The Seattle Times, November 19, 2013; Dubai Airshow: Boeing Gets Twice as Many Orders as Airbus, The Christian Science Monitor, November 18, 2013, and Boeing Says 22 States Made Pitches for 777X, The State, December 12, 2013. 41 Boeing Buying More Land, Footprint to Triple in North Charleston, New 787 Paint Facility Coming, The Post and Courier, December 13, 2013. 42 Boeings $7.5 Billion Cathay Order Is Asias First for 777X, Bloomberg News, December 20, 2013. 43 Boeing Buying More Land, Footprint to Triple in North Charleston . . . 44 All the information in the ensuing Gulfstream section is extracted from The History of Gulfstream, gulfstream.com; Gulfstream Growing, Will Add 1,000 Jobs, The Atlanta Business Chronicle, November 15, 2010; Gulfstream Advancing Toward Supersonic Business Jet, The Atlanta Business Chronicle, July 27, 2012; Gulfstream Aerospace Flying High in 2013, The Atlanta Business Chronicle, October 23, 2013; and Gulfstreams Good Times Boost State Economy, The Atlanta Journal-Constitution, November 4, 2013. 45 Gulfstream to Expand in Brunswick, The Atlanta Journal-Constitution, January 22, 2014. 46 All the information in the ensuing Spirit AeroSystems section is extracted from Spirit AeroSystems Incentives Top $240M, The Triangle Business Journal, June 30, 2008; Spirit AeroSystems Officially Opens Facility in Kinston, NC, PR Newswire, July 1, 2010; Spirit AeroSystems Project to Bring Up to 200 Jobs to Kinston, wral.com, July 20, 2011; Thats The Spirit, Site Selection Magazine, March 2012; Spirit Loses Millions in State Incentives, witn.com, September 27, 2013. 47 Thats The Spirit, Site Selection Magazine, March 2012. 48 Ibid. 49 All the information in the ensuing Honda Aircraft section is extracted from Honda Aircrafts Expansion Strengthens N.C. Aerospace Cluster, Global Business Journal, October 11, 2011; Honda Aircraft Company Breaks Ground on New MRO Facility, hondajets.com, September 27, 2012; Honda Aircraft Company Begins HondaJet Production, hondajets.com, October 29, 2012; HondaJet Debuts Latest Aircraft at Wis. Show, ABC News, August 2, 2013; and email correspondence received from Aleasha Vuncannon, Public Relations Lead, Honda Aircraft Company, on February 20, 2014. 50 All the information in the ensuing GE Aviation section is extracted from GE Aviation Opens Composites Factory, Media Release, geaviation.com, April 30, 2013; Durham Oks $400,000 Incentive for GE Aviation, News & Observer, June 4, 2013; Mississippi GE Factory Sets News Round of Hiring, The Clarion-Ledger, October 8, 2013; GE Aviation Breaks Ground on Asheville Plant, News & Observer, November 14, 2013; GE Aviation Breaks Ground on Asheville Facility, Media Release, geaviation.com, November 14, 2013. 51 All the information in the ensuing UTC Aerospace Systems section is extracted from United Technologies Unit to Create 325 Jobs in Charlotte, Charlotte Business Journal, June 13, 2012 and City Money to Lure United Technologies Stirs Debate, News & Observer, July 5, 2012. 52 All the information in the ensuing Embraer section is extracted from Tradition and BackgroundEmbraer, embraer.com.br (accessed on December 3, 2013); Global PresenceEmbraer, embraer.com.br (accessed on December 3, 2013); Special Presentation - Embraer,
Area Development, March 26, 2013; Embraer, Florida Today, August 22, 2013; Embraer to Build Legacy 450/500 in Florida, avweb.com (accessed on December 3, 2013) and Special Presentation - Embraer, Area Development, October 30, 2013. 53 Embraer to Build Legacy 450/500 in Florida . . . 54 Embraer, . . . 55 All the information in the ensuing Dassault Falcon section is extracted from The Company: Dassault Falcon, dassaultfalcon.com; Aerospace Industry Fights Recession Doldrums, Arkansas Business, April 30, 2012; Dassault Falcon Jet to Expand Little Rock Completion Facility, Arkansas Economic Development Commission, May 29, 2013; Dassault Falcon Jet in Little Rock Plans $60M Expansion, Arkansas Business, May 29, 2013; Dassault Falcon Chooses Little Rock Over Greensboro for $60M Expansion, The Piedmont Triad Business Journal, June 11, 2013. 56 All the information in the ensuing Rolls-Royce section is extracted from Governor Barbour Announces Rolls-Royce Expansion at Stennis Space Center in Hancock County, News Release - Mississippi Development Authority, January 9, 2012; Rolls-Royce Expands Virginia Manufacturing Operations, rolls-royce.com, September 7, 2012; Rolls-Royce in the U.S., rolls-royce.com, September 7, 2012; The Rolls-Royce of Private Partnerships, Governing, July 2013; 2nd Engine Test Stand Opens at Stennis, The Clarion-Ledger, October 16, 2013. 57 Information related to Alabamas aeronautics sector is extracted from Made in Alabama - Aerospace, Alabama Department of Commerce, madeinalabama.com, (accessed December 6, 2013); Governor Bentley Addresses Hamburg Aviation Forum in Germany, wtvm.com, November 28, 2012; Expanding Alabama Aerospace Industry, Winning Jobs Focus for 2013 Paris Air Show, al.com, June 16, 2013; Huntsville Makes its Case for New Boeing Plant, Alabama Public Radio, December 9, 2013. 58 Governor Bentley Addresses Hamburg Aviation Forum in Germany. . . 59 Information related to some of Arkansas major aeronautics players is extracted from Largest Aerospace Companies, researched by Luke Jones and Roxanne Jones in 2010 and 2011 and featured in http://arkbiz.s3.amazonaws.com/legacy/news/print_editions/ab_ aerospace_companies_list_12.pdf. 60 Information related to Floridas aeronautics sector is extracted from Florida Industry Clusters - Aviation & Aerospace, Enterprise Florida, eflorida.com, (accessed August 23, 2013) and Top 10 Reasons Businesses Should Locate in Florida, FreightMovesFlorida.com, (accessed August 23, 2013). 61 South Florida Emerging As A Leading Flight-Training Location, The Miami Herald, August 25, 2013, http://www.miamiherald. com/2013/08/25/v-print/3583252/south-florida-emerging-as-a-leading.html#storylink=cpy. 62 Information related to South Florida emerging role as a major, global flight-training hub is extracted from information in South Florida Emerging As A Leading Flight-Training Location . . . 63 Ibid. 64 Florida Companies Eye Mideast Aviation Bonanza, tcpalm.com, November 19, 2013. 65 Northrup Grumman to Add 400 New Jobs, The St. Augustine, April 2, 2013. 66 Midair S.A. to Establish $28 Million Maintenance Facility at Melbourne, Florida International Airport, Area Development, May 13, 2013. 67 ST Aerospace Coming to Pensacola International Airport, The Pensacola News Journal, December 17, 2013. 68 Information related to Georgias aerospace sector is based on Economic Impact Analysis of Georgias Aerospace Industry, Georgia Department of Economic Development, January 2013, http://aerospace.georgiainnovation.org/images/public/reports/Aerospace%20 impact%20analysis%20FINAL%202%2025%2013.pdf and Georgia Aerospace Exporters Take Flight to Dubai Airshow, Global Atlanta, December 10, 2013, http://www.globalatlanta.com/article/26637/georgia-aerospace-exporters-take-flight-at-dubai-airshow/. 69 Information related to Northern Kentuckys aviation sector is extracted from Northern Kentuckys Aviation Sector Flies High, The Northern Kentucky Tri-County Economic Development Corporation (Tri-ED), http://www.northernkentuckyusa.com/targetindustry/aviation.aspx (accessed December 11, 2013). 70 Information related to Mississippis record in the aeronautics sector is extracted from Americas South Rises Again on Aerospace Wave In Mississippi, Aviation International News, July 10, 2012. 71 Information related to Missouris December 2013 offer to Boeing is based on MO Governor Signs $1.7B Boeing Incentive Plan, The Kansas City Star, December 11, 2013, and Missouri Governor Signs Boeing Tax Deal, The Spokesman-Review, December 11, 2013. 72 Nixon, Aerospace Firms, Head to Paris Looking for Deals, St. Louis Today, June 15, 2013. 73 Information related to the Texas aerospace sector was based on Aerospace Manufacturing, Texas Economic Development, TexasWideOpenForBusiness.com, (accessed September 27, 2013). 74 Boeing to Shift Research Jobs to Missouri, Alabama, South Carolina, The News Tribune, December 12, 2013. 75 International Economic Development Council. (2012). Knowledge is Power: Working Effectively with Site Selectors quoted in McHugh, Patrick, Ph.D., Fiscal Research Division, North Carolina General Assembly in Testimony before the Joint Legislative Economic Development and Global Engagement Oversight Committee, December 5, 2013.
THE SoUtHerN OffIce of THe CoUNcIl of State GoverNmeNtS
REGIONAL VIEW NATIONAL REACH
his report was prepared by Fiscal Policy Manager Sujit M. CanagaRetna for the Economic Development, Transportation & Cultural Affairs Committee of the Southern Legislative Conference (SLC) of The Council of State Governments (CSG), under the chairmanship of state Senator Bill Sample of Arkansas. The mission of The Council of State Governments Southern Legislative Conference is to foster and encourage intergovernmental cooperation among its 15-member states. In large measure, this is achieved through the ongoing work of the Conferences six standing committees and supporting groups. Through member outreach in state capitols, policy research, member delegations to points of interest, meetings and fly-ins, staff support state policymakers in their work to build a stronger region. Founded in 1947, the Southern Legislative Conference is a member-driven organization and the largest of four regional legislative groups operating under The Council of State Governments and comprises the states of Alabama, Ar-
kansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. The SLCs six standing committees provide a forum which allows policymakers to share knowledge in their area of expertise with colleagues from across the South. By working together within the SLC and participating on its committees, Southern state legislative leaders are able to speak in a distinctive, unified voice while addressing issues that affect their states and the entire region. The Southern Office was opened in Atlanta in 1959. Initially charged with serving all three branches of state government, the duties of the Office have evolved to providing services primarily to the more than 2,400 legislative members and staff of its 15-state region. SLC members are appointed by the leadership of the 30 legislative chambers in the South. The SLC Annual Meeting has grown to become the largest regional gathering of state legislators in the country and attracts the largest audience of any of the CSG regional conferences.
SERVING THE SOUTH
THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTS

PO Box 98129 | Atlanta, Georgia 30359 ph: 404/633-1866 | fx: 404/633-4896 | www.slcatlanta.org

Aeronautics in The SLC States: Cleared For Takeoff

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SOUTHERN LEGIslATIVE CONFERENcE

A REGIONAL RESOURCE FROM THE SLC

CLEARED FOR TAKEOFF

AERONAUTICS IN THE SLC STATES:

Copyright February 2014

THE COUNcIl OF STATE GOVERNMENTs

SERVING THE SOUTH

THE SOUTHERN OFFICE OF THE COUNCIL OF STATE GOVERNMENTS

Selected Commercial Aircraft Manufacturers................16

Aeronautic Developments in Selected SLC States........28

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Boeing 787 flight test. Photo courtesy of Boeing MediaRoom.

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WhY the MoVe?

Economies of Scale and Clustering

Southern Workforce Development Programs

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Figure 1 Private Fixed Investment in Aircraft Equipment and Software

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Top 10 States by Aerospace Table 6 Job Growth 2007-2012

Source: Avalanche Consulting (accessed November 19, 2013)

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Components of the Alabama Robotic Technology Park Program

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South Carolina Manufacturers Alliance (SCMA) 2013 Legislative Agenda

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Selected Commercial Aircraft Manufacturers OperatinG in the SLC States

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Photo courtesy of Gulfstream Aerospace Corporation

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Honda Aircraft Company

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UTC Aerospace Systems

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Recent Aeronautic DeVelopments in Selected SLC States

Photo courtesy of Boeing MediaRoom

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Figure 2 Floridas Aviation & Aerospace Cluster

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Embraer Legacy 500. Photo courtesy of Embraer Media Center.

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Photo courtesy of Honda Aircraft Company

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