THE NATION’S LARGEST EXPORT INDUSTRY IS FLYING TOWARD RESOURCES

Just like the automotive industry, aerospace has taken flight to the U.S. Southeast with major manufacturing sites for Airbus in Mobile, Ala.; Boeing in North Charleston, S.C.; Honda Jets in Greensboro, N.C.; Gulf Stream in Savannah, Ga., and United Technologies Corp. (UTC) in Charlotte, N.C.

The attraction is low-cost wages, a skilled workforce, low taxes, attractive incentives, excellent training, top universities, a non-union environment and excellent logistics support.

Pacific Rim Aerospace selected Charleston for its first site outside Washington state so that it could more directly support its customers in the Southeast. Toray Industries, a Japanese carbon fiber manufacturer and major aerospace material supplier, announced in February plans to build its first consolidated facility in Spartanburg, S.C.

“Toray will locate 200 miles from Boeing’s Charleston campus, shortening the supply chain by several thousand miles,” says Allison Skipper, South Carolina Department of Commerce spokeswoman.
Charlotte, N.C., has more than 140 aerospace suppliers in avionics, composites, metals, engine systems, interior products and control systems.

“When UTC acquired Goodrich over a year ago and moved its UTC Aerospace division headquarters here, they found that our cost structure was competitive,” says David Swenson, senior vice president of the Charlotte Regional Partnership. For the move, N.C. gave UTC tax credits and grants.

The company was also helped by Connecticut Governor Dannel Malloy, who signed legislation to help UTC expand and upgrade its R&D and manufacturing facilities in the Nutmeg State and invest up to $4 billion in research and other capital expenditures over the next five years.

Although approximately 40 percent of Virginia’s 260 aerospace firms are in Northern Virginia and 33 percent in Hampton Roads, U.K.-based Kilgour Industries plans to manufacture aircraft components in Martinsville in southern Virginia. The area is appealing for its geographic proximity to North and South Carolina’s burgeoning aerospace industry, proximity to Washington, D.C., and the East Coast’s hardworking employees and low cost of living. Interest in the area also was piqued by advanced manufacturing at New College Institute in Martinsville.

Elsewhere, states like Connecticut, Ohio, Oklahoma, California and Washington present cases for aerospace attraction.
Oklahoma, home to 400 aerospace companies, is fast becoming a global leader in unmanned aerial vehicle (UAV) R&D and testing.

Washington has in place an industry strategy to identify, assist and attract Boeing suppliers, particularly in new programs such as the 737 MAX, KC-46A and 777X in expansion and/or establishment of facilities in the Evergreen State.

A 2014 report by Deloitte indicates that the U.S. aerospace and defense industry generates $324 billion in revenues, contributes 2.23 percent to GDP, has a direct payroll of $84 billion, pays federal and state cash income taxes of $38 billion, and exports $90 billion of goods. Aerospace and defense are the highest contributors to the nation’s trade balance.