By BF Staff
From the July/August 2013 issue
The Aerospace/Defense industry reported its third consecutive year of record revenue and profit last year. The uptick came on the strength of a surging commercial aviation market that more than offset a soft defense performance. For 2012, the top 100 Aero/Defense companies reported a record-setting $695 billion in revenue and $59.8 billion in operating profit. Revenue was up 4 percent compared with 2011, while operating profit was up 2% over 2011.
Although growth is expected to slow, commercial aerospace companies continue to be optimistic about the future, industry experts say. However, defense companies face an uncertain 2013. Sequestration went into effect on March 1, and defense companies are now bracing for the consequences of mandatory budget cuts and waiting for details regarding the impact on specific programs.
Aero/Defense executives are focused on reducing their cost base, with almost 80 percent of large OEM respondents to a recent industry survey saying that growth over the next two years will likely not exceed two percent. Any additional bottom line growth will need to be realized from further cost reductions.
Commercial aviation has rebounded nicely from the Recession, but continued uncertainty over problems with Boeing’s new flagship 787 Dreamliner jet still clouds the picture. Boeing has received billions of dollars worth of orders for the sleek, fuel-efficient 787, but the aircraft has been plagued by battery fires since its first commercial flights began early this year.
FLYING HIGH IN NORTH LOUISIANA
Aerospace/defense companies will find North Louisiana a business-friendly and low cost manufacturing environment. Ranked as the most cost competitive place to do business by Forbes and KPMG, North Louisiana offers both value and quality.
The 2013 Gallup “State of the American Workplace” study ranks our skilled labor force the most engaged in the nation. The region’s 12 colleges and universities create a workforce pipeline that produces the right skill sets. Three Louisiana Airframe and Powerplant (A&P) schools, including one at Southern University at Shreveport, deliver technicians with required certificates and FAA certifications. Louisiana Tech, the region’s largest university, is a national tier 1 school with a College of Engineering and Science, ranked in the top 125 of all engineering graduate schools. 12 percent of Tech’s engineering majors enter the aerospace/defense industry.
A combination of other factors provides an innovative environment for doing business in Louisiana. Our major airports offer industrial property with runway access available to companies seeking to establish operations with enhanced ROI and lower costs.
AeroPark at the Shreveport Regional Airport (SHV) in Shreveport, Louisiana has 250 acres available for development with all infrastructure in place. Adjacent to Kansas City Southern and Union Pacific Railroads and Interstates 20 and 49, companies at AeroPark are strategically located near some of the largest consumer markets in the South. The site offers a 24/7 control tower and a fire station and is designated a Foreign Trade Zone with customs and border security. The industrial park’s proximity to the Shreveport Regional Airport allows easy access to ILS Category 2 primary runways that are 8,351′ and 6,202′. Served by five airlines, FedEx and UPS along with multiple warehouse districts, the Shreveport Regional Airport is recognized as the second busiest air cargo airport in Louisiana. Express Jet operates a maintenance facility at the airport and employs 280 workers. AeroPark is also served by three ports along the Red River, including the Port of Caddo-Bossier. Louisiana’s port system is one of the largest in the world, transporting tons of cargo in and out of the country, to destinations across the globe.
The Monroe Air Industrial Park next to the Monroe Regional Airport (MLU) in Monroe, Louisiana has 250 acres available and has recently opened another 460 acres for development. The Air Industrial Park offers all utilities and infrastructure including multiple rail spurs from Kansas City Southern and Union Pacific Railroads. The park is strategically located with convenient access to Interstate-20, U.S. Highway 165, U.S. Highway 80 and three nearby ports. The Monroe Regional Airport recently built a new state-of-the-art terminal building, and has one 7,500-foot runway (RWY 4/22) and two 5,000-foot runways (RWY 18/36 and RWY 14/32).
North Louisiana’s competitive advantages allow our businesses to grow. Haynes International, a leading producer of titanium hydraulic tubing for global aircraft manufacturers, recently announced a $37 million expansion and upgrade at its Arcadia, Louisiana plant. The project will create 19 new jobs and retain 141 existing jobs. The expansion will help Haynes meet additional demand from its customers in the aerospace industry and other markets. The Arcadia plant currently operates at full capacity, but demand for titanium tubing is growing and is expected to remain strong for the next two decades.
Another aerospace company, Metro Aviation based in Shreveport, Louisiana continues to thrive in North Louisiana. The company has expanded its offerings from an air medical service to include helicopter maintenance, repair, modification and installation.
Aviation and aerospace companies can also take advantage of competitive incentive packages, including a 15 percent rebate on payroll for up to 10 years for qualifying projects as well as a 4 percent sales tax rebate on capital expenditures for qualifying expenses. Manufacturers can receive a 10-year property tax exemption. Louisiana Economic Development (LED) also offers the best workforce solutions program in the country: LED FastStart.
North Louisiana’s defense sector represents one of the largest employers in North Louisiana. Barksdale Air Force Base, located south of Bossier City, Louisiana employs nearly 11,000 people and generates an annual economic impact of $753.8 million. Barksdale is home to the “Mighty Eighth” Air Force of World War II fame, the 2nd Bomb Wing, 2nd Operations Group, 2nd Maintenance Group, 2nd Mission Support Group, the 2nd Medical Group, Eighth Air Force Museum (which maintains historical aircrafts and artifacts), the Air Force Reserve’s 917th Wing, and most recently the Global Strike Command.
In 2009, North Louisiana beat out five other states to win the Air Force’s newest command, Global Strike Command (AFGSC), which was activated at Barksdale. AFGSC is projected to create nearly a 1,000 new jobs. Global Strike Command’s mission is to develop and provide combat-ready forces for nuclear deterrence and global strike operations. It is responsible for the nation’s three intercontinental ballistic missile wings, the two B-52 wings and the only B-2 wing.
Created to support the Global Strike Command and other defense-related interests, the 3,000-acre National Cyber Research Park (NCRP) provides a physical location for government, private industry, and academia to collaborate, perform leading research, and develop state-of-the-art technologies. NCRP is strategically located next to Barksdale Air Force Base (Barksdale) in Bossier City, Louisiana, along Interstate 20 and Highway 80. This location provides easy access for companies located at the park.
Anchoring the Cyber Research Park, the Cyber Innovation Center (CIC) focuses on protecting our nation’s interest by becoming a leader in cyberspace and cyber infrastructure research and technology development. CIC also serves as catalyst for the development and expansion of a knowledge-based workforce throughout the region.
Camp Minden, a former ammunition plant near Minden, Louisiana, was transformed into a 15,000-acre site for military training and economic development. Faced with closure with by the Defense Department, Camp Minden reinvented itself as an industrial complex targeting the defense sector. Approximately 13,500 acres of Camp Minden is used for military training, while a growing industrial community utilizes the remaining 1,500 acres. More than 20 companies are located at Camp Minden, including six explosives manufacturers—who uniquely appreciate the former load lines. Recently, Tiburon Associates, based in Alexandria, Virginia, opened a maintenance overhaul facility at Camp Minden. Tiburon recently won a $78 million, multiyear contract to overhaul and recondition combat tactical wheeled vehicles from the federal Red River Army Depot near Texarkana, Texas. The project will create 350 new jobs.
SANTEE COOPER: READY TO POWER GROWTH IN SOUTH CAROLINA
Flip a switch and the light comes on. Plug in your computers and get plugged in. Turn on the water and it flows.
This is what Santee Cooper delivers, every day, across South Carolina. It also delivers the intangibles that people never see, such as leadership, environmental stewardship, and an economic environment enticing to new business. All of which builds a brighter South Carolina for everyone.
Santee Cooper is South Carolina’s largest power producer, providing electricity to 2 million people and businesses all across South Carolina, directly and through the state’s 20 electric cooperatives and several municipalities. It directly serves an additional 29 industrial customers and the Charleston Air Force Base.
Santee Cooper is also South Carolina’s leader in generating renewable power, with 151 megawatts online or under contract, and it has an aggressive energy efficiency program to help customers save money and energy.
Santee Cooper’s economic development efforts reach across the state, from a discounted electric rate for new industrial load to infrastructure loans that help local governments and economic development corporations create working space that works for you. Through Santee Cooper’s discounted industrial rate, eligible new or expanding industries can receive an initial 55 percent discount off the demand charge in your “firm” industrial rate. That discount gradually tapers off over five years, and it is available to customers who sign up by December 2015. Industrial customers also must meet minimum employment and capital investment requirements to qualify.
“Santee Cooper is committed to doing all we can to attract new industry and jobs to South Carolina, and to encourage existing industry to expand here,” said Lonnie Carter, president and CEO. “By offering this discount ourselves and through the state’s electric cooperatives and our municipal customers, we can help attract new jobs and industry to every corner of the state.”