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By the BF Staff
From the March/April 2016 Issue
After several years of job losses, aerospace and defense sector employment is expected to grow in 2016 by more than 39,000 jobs in the U.S., according to Deloitte’s new U.S. Aerospace & Defense Labor Market Study. This reverses a five-year trend that resulted in employment decreases of 9.4 percent, of which about 185,000 jobs were lost in the defense subsector.
While aerospace and defense sector employees are found in every state, seven states accounted for half of all aerospace and defense sector employees in the U.S. The top states, in descending order, are: California, Washington, Texas, Florida, Arizona, Connecticut and Kansas. This does not include those employed in the public sector.
“The U.S. aerospace and defense sector continues to be one of the top employers in the U.S. economy, even with the five-year decrease in total employment,” said Tom Captain, vice chairman, Deloitte LLP, and aerospace and defense leader. “This sector’s jobs are also paying almost twice the national average, leading to greater economic value creation. A return to growth will be healthy for innovation, product development and game-changing technology creation—a cornerstone of this industry.”
According to the study, the aerospace and defense sector directly employed 1.2 million workers in 2014, and another 3.2 million indirectly. The defense subsector contributed heavily to the overall decline since 2010, with an 18 percent decrease in jobs. The smaller commercial aerospace subsector helped offset these losses with a 17 percent increase in jobs in the same period.
However, despite the decline in employment numbers, the U.S. aerospace and defense sector experienced increased wages and taxes paid since 2010. Aerospace and defense sector companies paid $7.7 billion in corporate federal income taxes and $4.1 billion in state and local income taxes in 2014, a $1.5 billion growth in total corporate taxes paid since 2010. Additionally, individual income taxes paid totaled $23.9 billion in 2014, a 9.9 percent increase since 2010.
ACADIANA: WHERE BUSINESSES RISE
Enjoying an abundance of economic assets and fueled by an entrepreneurial spirit, the nine-parish (county) region of Acadiana in south Louisiana is a special place to do business — culturally vibrant and rich in Cajun heritage. Accompanying this quality of place is a business climate combining an extensive collection of competitive advantages, from low business operating costs, to robust infrastructure, creating an ideal environment for success. Add to that the nation’s best state workforce development program and internationally competitive incentives, and it’s clear Acadiana provides companies a competitive edge.
No industry exemplifies this advantage more than Acadiana’s thriving and diverse aviation industry. As a result, some of the industry’s most respected names operate in Acadiana, capitalizing on its proximity to Gulf of Mexico oil and gas operations; access to national and international markets; and highly skilled, dedicated, and loyal workforce.
PHI, Inc., known worldwide as a leading helicopter services company, calls Acadiana home. With a long history of operating in the global marketplace, PHI, Inc. has flown over 12 million rotary wing flight hours over the past 60 years, more than any private entity worldwide. In addition to operations in the U.S., the company operates in 43 countries across the globe. Every day, PHI helicopters fly up to 250 miles into the Gulf of Mexico’s international waters providing transportation, air medical, and technical services to offshore oil and gas companies.
Bristow Group’s Americas Region, strategically headquartered in New Iberia, has operated for over 50 years in North America. Comprising operations in North America, South America, Latin America and Trinidad, it primarily provides crew transport services to offshore drilling rigs and production platforms in the Gulf of Mexico. Clients consist of international, independent, and major integrated oil and gas companies. Bristow maintains advanced flight-following systems and widespread and strategically located offshore fuel stations in the Acadiana region.
AvEx, a world leader in the niche market of aviation exterior painting, has been located at Acadiana Regional Airport (ARA) in New Iberia for over 25 years. Taking advantage of ARA’s 8,000-foot runway, AvEx serves the jet fleets of industry leaders such as Boeing, FedEx, and Southwest Airlines.
Most recently, Bell Helicopter made Lafayette its choice for production of its Bell 505 Jet Ranger X. The company has already invested $26.3 million in the region with plans to make an additional $11.4 million capital investment in equipment and tooling. While it could have chosen any location, Louisiana’s customized facilities solutions and experienced workforce made Acadiana the right choice.
As you can see, the aviation industry in Acadiana is booming with significant investments being made on a variety of fronts. Lafayette Regional Airport is planning a $90 million project to build a new passenger terminal; Acadiana Regional Airport is undergoing a $5 million renovation that includes a small passenger terminal; and South Louisiana Community College has opened its International School of Aviation Excellence in Iberia Parish to train workers for the aviation industry, including mechanics, assemblers, pilots, and avionics technicians. These major investments will help the 1A region better compete in a rapidly growing economic sector.
Market accessibility is a differentiator in the Gulf Coast region, with easy access to interstate, rail, ports, and airports. Strategically located between the Houston and New Orleans markets at the intersection of Interstates 10 and 49, Acadiana provides access to 38 interior states via the Mississippi River and countless international markets via the Gulf of Mexico.
Beyond market accessibility, a combination of low corporate tax burdens, low operating costs, and right-to-work legislation make Acadiana uniquely attractive for private investment. KPMG’s 2015 “Location Matters: The State Tax Costs of Doing Business” noted Louisiana ranks No. 1 lowest tax burden for capital-intensive manufacturing, No. 1 for labor-intensive manufacturing, No. 1 for research and development facilities, and No. 4 for new corporate headquarters in the U.S. In addition, Acadiana’s industrial electricity and natural gas rates are among the lowest in the South, and even within the state of Louisiana.
Acadiana is dedicated to the growth of the aviation sector, and will align state and local resources to provide customized incentive packages for businesses looking to grow. Contact us to learn more about our Aerospace Manufacturing Payroll Incentive, which can provide up to a 12 percent payroll rebate, our Industrial Tax Exemption Program, providing a one hundred percent property tax exemption, and more.
In addition to its attractive business climate, Acadiana possesses incredibly rich cultural and culinary traditions of the Cajuns and Creoles, and is a place like no other. Warm and wonderfully hospitable people with a tireless work ethic; excellent food; and the quiet, singular beauty of the bayous and swamps of the Atchafalaya Basin set this region apart. These attributes make Acadiana a unique place to live, work, and do business.
One Acadiana is the leading economic development organization for the nine-parish Acadiana region located in south Louisiana. With more than 1,200 investors, members, and partners, One Acadiana serves as the voice of the regional business community. The organization is located in the city of Lafayette and serves a region of roughly 700,000 people with a vibrant culture and unique entrepreneurial spirit. For more information, contact Jim@OneAcadiana.org.
ROCHESTER, NH MAKES THE SHORT LIST
“Location, location, location:” We’ve heard it countless times. What puts a location on the shortlist for a major investment or relocation? Number one issue today is skilled and available workforce and a sustainable pipeline for talent acquisition. Real estate bargains are still important and can balance an uneven playing field, but no discount or incentive can cure a talent wasteland. The demand for quality employees has pushed firms to prioritize previously overlooked locations, such as Southern New Hampshire and the city of Rochester, one of the state’s largest and most welcoming cities for business.
Rochester, NH is one hour north of Boston and is a longtime favorite of niche manufacturers with research and development components. The classic New England downtown, anchored by a historic 1905 Opera House, is juxtaposed with the nationally recognized advanced technology centers at the middle and high school levels and an elementary magnet school delivering bi-lingual education, providing a global world-view to the youngest citizens. Affordable housing options and speedy access to the Portsmouth-Boston corridor, a gateway to the year-round recreation opportunities in the Lakes Region and North Country, make Rochester a gem among the highly competitive Boston Metro-North corridor.
World renowned French aerospace firm, Safran USA, selected Rochester for their LEAP engine facility, and to secure partnership advantages with aerospace composites leader Albany International, which chose to relocate their corporate headquarters to the City in 2010. Safran and Albany created a shared enterprise and is co-located in a 345,000 square foot building adjacent to Albany’s Research & Product Development Center in the Granite State Business Park, the 150-acre advanced manufacturing district next to Skyhaven Airport. The two firms plan to employ more than 500 employees in the new facility by the end of the decade, adding to the advanced skill base already working in the region.
Evaluating the advantages of a business location is ONE, TWO and THREE:
First, TALENT: Rochester has a well educated population younger than the state average and delivers multiple opportunities for business partnerships with educational institutions. Great Bay Community College invested millions into a state-of-the art Rochester campus with a brand new composite materials lab. Built in 2013, this Advanced Technology and Academic Center (ATAC) has increased capacity in 2015 by expanding to 30,000 square feet, offering classroom instruction, machine simulations and hands on lab training. Customized programs and state training grants are available. Granite State College also has a Rochester Campus, and focuses on Bachelor’s and Master’s Degrees in a variety of specialty areas as well as Liberal Arts. The University of New Hampshire (Durham, 12 miles) has direct Wildcat bus access to Rochester, convenient for students and faculty, employers and commuters. The City continues to increase its appeal by constructing new housing units in Downtown, townhomes and single family near the six Spaulding Turnpike exits and in more rural settings for those looking for a country lifestyle with modern amenities.
Second, ACCESS: Rochester industrial and business parks are served by newly expanded infrastructure, including the Spaulding Turnpike. New Hampshire just completed a $135 million expansion of the Turnpike, improving all six Rochester exits, making local travel a breeze. This road connects directly to I-95 and the Northeast transportation network. Rochester is served by active freight rail delivered by NH Northcoast, air at Skyhaven and managed by the Pease Development Authority, and employees have access to COAST Bus Service in the state’s most effective regional bus system. Rochester is the regional hub for commercial and industrial activity as well, with eight business parks and seven distinct commercial and entertainment districts, for access to the finest quality of life for employees and executives.
Third, COST-EFFECTIVENESS: How can all of this quality be affordable? New Hampshire is a recognized value leader when it comes to state and local taxes. With no state sales or income tax, limited corporate taxes and new tax incentives, like R&D Tax Credits and Economic Revitalization Zone Credits, the tax burden is ranked as BEST in New England and 8th in the nation by the U.S. Tax Foundation. Rochester real estate is some of the most affordable in the Seacoast and land locations are available for new construction with significant state and local incentives. Our streamlined process enables firms to articulate their business needs and the department delivers significant cost savings with a location in this attractive suburban enclave.
While “location, location, location” is still true, today’s market views prime communities like Rochester, New Hampshire, as competing and winning niche and boutique projects as well as large-scale, advanced manufacturing with a combination of world class talent, unparalleled access to the Northeast markets and highly cost-effective new or existing construction suitable for all types of businesses.
Karen G. Pollard, CEcD is the Economic Development Manager for Rochester, NH and serves on the Board of Great Bay Community College and the Northeast Economic Developer’s Association. She can be reached at Karen.firstname.lastname@example.org.
FROM DREAM TO REALITY IN FLORIDA
When William T. Piper started Piper Aircraft in 1937, he had a dream. He felt that everyone should fly. And he believed that Piper could provide that freedom. Piper planes now fly over every continent and are a universal symbol of personal flight. It’s safe to say that Mr. Piper’s dream is now a reality.
But before reaching cruising altitude, each single- and twin-engine Piper plane is conceptualized, designed and handcrafted from Piper’s headquarters in Florida.
Piper is one of more than 2,000 aviation and aerospace companies calling Florida home. Back in 1975 when Piper relocated to the state, the decision was based solely on Florida’s perfect conditions for air flight.
“Piper initially opened a flight test and engineering facility in Vero Beach due to the ideal year-round flying conditions,” said Jacqueline Carlon, Piper’s Director of Marketing and Communications.
Carlon still believes Florida’s great weather plays a part in the company’s success, but states being close to a growing client base is equally as important.
“Today Florida is a leading general aviation state with one of the largest populations of pilots in the United States, as well as large number of aircraft owners and flight schools,” said Carlon.
Piper’s corporate headquarters, manufacturing operations and aircraft research and development departments are now all located at the Vero Beach Municipal Airport. Florida leads the nation in aviation manufacturing attractiveness, which represents the climate of success the state offers all facets of the industry.
The aerospace industry in Florida was founded by the existence of 20 major military bases, four naval air stations and the space program. As a result, more than 80,000 aviation and aerospace workers live here. Pulling from this highly educated and skilled workforce, Piper attracts and retains the best talent.
“Florida’s workforce is resilient, committed and passionate about their work,” said Carlon. “From Piper’s perspective, we have many employees who have been with us for over 30 years, some of which have multiple generations of their family working alongside of them.”
To ensure a future talent pipeline, Piper has also established mutually beneficial relationships with Florida’s colleges and universities, such as the Florida Institute of Technology.
“Piper Aircraft directly benefits from the tremendous talent pool that is being produced by these leading learning institutions,” said Carlon. “Having access to some of the best talent in the industry helps drive Piper’s success in general aviation industry.”
Considering more than 16,000 new science, technology, engineering and math students enter our workforce every year, the synergy between Florida’s institutes and industries works.
Piper’s ability to sell aircraft throughout the world is assisted by Florida’s unique geographic features and strong infrastructure, including 15 deepwater ports, more than 100 public-use airports and an extensive network of road and rail. The state’s multimodal infrastructure has characterized Florida as a gateway to the world. Piper uses its location as a launch point for global business.
“The infrastructure within the state makes it easier for our customers, vendors and dealers to travel to and from Vero Beach,” said Carlon. “In instances where aircraft need to be shipped via containers, the multiple ports and shipping options make it easier and more cost effective for us to export aircraft into foreign markets.”
Investing more than $700 million in its ports over the last four years, Florida continuously works to improve major transportation systems, making it easier for companies to take advantage of international shipping.
Because of the quality of life, skilled workforce and global connectivity, Florida’s aviation and aerospace industry continues to innovate and invest.
When it comes to your aviation or aerospace business in Florida, the sky’s the limit. Discover what a future in Florida means for your business at floridathefutureishere.com
ATLANTIC COUNTY, NJ: A LEADING EDGE LOCATION
Atlantic County, NJ borders the Jersey Shore and is less than an hour drive to Philadelphia, two hours to New York City and three hours to Washington, DC. Atlantic County is internationally known for its tourism attractions, pristine beaches, protected Pinelands, scenic rivers, fertile farmlands, and award winning fresh water generation and supply. In the middle of it all is the Atlantic City International Airport with four operating runways open to private, commercial, and military aircraft. The main instrument runway is 10,000 feet long and 180 feet wide and was previously an alternate landing site for NASA’s space shuttle program.
Adjacent to Atlantic City International Airport is the Federal Aviation Administration (FAA) William J. Hughes Technical Center, the nation’s premier aviation research, development, test and evaluation facility. Its world-class laboratories and top-notch engineering place it at the forefront of the FAA’s challenge to modernize the U.S. air transportation system and provide verification and validation in air traffic control, communications, navigation, aircraft safety, and security. The FAA Technical Center is the primary facility supporting the nation’s Next Generation Air Transportation System (NextGen) and the integration of unmanned aircraft systems (UAS) into the national air space. The area serves as one of six national UAS test sites.
The FAA Technical Center’s unique features include air traffic control and simulation facilities, a human factors laboratory, a fleet of specially instrumented in-flight testing aircraft, the world’s largest full-scale aviation fire test facility, a chemistry laboratory to analyze the toxicity of materials involved in a fire, radar test laboratories, a structural panel test facility, and the National Airport Pavement Test Facility.
It is also home to the Federal Air Marshal Service training program and the Transportation Security Laboratory, a test and evaluation site for new, advanced airport security technology. The U.S. Coast Guard Group Air Station Atlantic City, the U.S. Marshal Service and the New Jersey Air National Guard 177th Fighter Wing also base their operations at the FAA Technical Center.
The Atlantic City International Airport (ACY) is recognized for having the shortest wait time among all New Jersey airports and Philadelphia International Airport. The airport has one of the longest runways in the world and was an alternate landing site for the NASA space shuttle. More importantly, ACY directly controls its air space.
Located on the Grounds of the FAA Technical Center, the Stockton Aviation Research and Technology Park (SARTP) currently is leasing space on its 58-acre campus. It will host seven multi-story buildings with over 400,000 square feet of state-of-the-art research offices, laboratories, and conference and meeting rooms. Additionally, it will include dedicated high-speed connectivity with FAA laboratories that replicates the National Airspace System. The research park offers a unique opportunity for aviation and aviation-related companies to work closely with the Federal Aviation Administration, the Atlantic City International Airport, Stockton University and other academic institutions, and industry representatives.
For more information on the Stockton Aviation Research and Technology Park, please contact Joseph Sheairs, Executive Director or Janice Bond, Associate Director at (609) 626-6031, or by email at Janice.Bond@stockton.edu.
Additional information concerning significant tax credits, workforce subsidies and site location opportunities are available by contacting Max Slusher, Economic Development Director, Atlantic County Improvement Authority, at (609) 343-2157 or by email to email@example.com
SOUTHWEST LOUISIANA: A MAJOR AEROSPACE HUB
A review of the tenant list at Chennault International Airport in Lake Charles, Louisiana will provide an observer with a picture of astounding economic development success in a region experiencing historic growth.
Northrop Grumman, AAR, Million Air (fixed base operator), Louisiana Millwork, and SOWELA Technical Community College are leading the way in market growth and workforce development at the airpark.
Chennault officials find themselves in a great position. As the facility grows, they are renewing growth plans to keep up with an estimated $97 billion in announced industrial development projects that are either started or gearing up to begin in Southwest Louisiana (five parish area Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis) which is boarded by the Sabine River—which separates Louisiana and Texas—on the west.
Northrop Grumman has approximately 900 employees who maintain and modify the United States Air Force Join Stars aircraft. The company also has a KC-10 logistic contract.
AAR employs over 500 people with an additional 800 planned to be brought on board by 2017. The company is working to modify one of its hangar’s for the A-380 aircraft. AAR’s program is rated number one in maintenance, repair and overhaul in America and three in the world.
Combined with Lake Charles Regional Airport, the local airport system has a $600 billion impact and has generated 4,600 jobs in the Southwest Louisiana regional economy.
In order to increase the statistical successes, leadership at Chennault have planned and started numerous facility enhancements: large hangar construction (completed), taxi widening as an alternate runway (final phase under construction); air cargo facility (Louisiana State Capital Outlay funded); corporate hangar and government sponsored facility (Louisiana State Capital Outlay funded); and warehouse expansion (Louisiana State Capital Outlay funded).
Airport authority officials are also developing an air cargo concept for the facility.
“The cargo/aviation complex is estimated to cost around $250 million and we have multiple parties interested in seeing it development. We anticipate 1,500 jobs additional jobs would be created,” said Randy Robb, the airport’s executive director.
Robb says the airport has a competitive advantage over many airports because of amenities.
“We have a 10,700 by 200 foot runway capable of accommodating any commercial or military aircraft. This facility houses 1.5 million square feet of hangar and building space and we are growing with an additional $120 million plus in hangars and buildings,” he said. “Add to that, there are 60 acres of concrete, rapid access to the Port of Lake Charles which is 60 miles from the Gulf of Mexico, access to Interstate 10 and Interstate 210 and miles of rail service.”
The airport is also designated as a foreign trade zone, zoned industrial and owned by the public therefore not subject to property taxes.
Developers and companies interested in such as site should know a substation is on the property with plans being developed for enhanced dual feed service.
“The airport also offers approximately 300 acres of prime land for suppliers in an established industrial park owned by the Port of Lake Charles. There are no wetlands and all the acreage we have is available for development which can service agriculture, aviation or recreation,” Robb said.
Due to continued visits by top level executive and managers associated with the multi-billion industrial expansion, Lake Charles Regional Airport is growing and planning more development according to executive director Heath Allen.
“The airport, in conjunction with our fixed base operator (Freeman Jet Center) is currently undertaking a $600,000 renovation which will provide first class facilities for corporate and private aircraft visiting our airport,” he explains. “We just completed an expansion of our north apron designated to allow for additional hangars to be constructed. And the airport is currently in negotiations with a company wishing to construct a 10,000 square foot hangar to house a corporate flight department on the south apron.”
Lake Charles Regional is home to 32 tenants with Era Helicopters as the longest customer housing 150 helicopters operating out of its company site. Era supports offshore oil and gas transportation, air medical services, search and rescue operations, firefighting, flight seeing and disaster relief efforts.
Allen notes that the airport is primed for more growth. “Much of the airport’s property is zoned for commercial and light industrial uses and is served by public utilities. Our parish (country) government recently bid a project that will bring public waste water disposal to the airport. This project will be very beneficial moving forward as the airport’s system is over 50 years old and at capacity.”
Currently, the airport commercial airlines services are provided by United Airlines to Houston and American Airlines to Dallas/Forth Worth.