The Aerospace Industry in Southern California
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1 The Aerospace Industry in Southern California League of California Cities, LA County Division Kimberly Ritter-Martinez, Economist LAEDC Kyser Center for Economic Research June 25, 2014
2 The Aerospace Industry Why did Southern California become a focal point for the Aerospace industry? Is Aerospace still an important industry in Southern California? What is the future of the Aerospace industry in the region?
3 A Little History 1908: The Aero Club of California organized the first aviation show in the U.S. in Rancho Dominguez During WWII: Southern California s aerospace firms focused on producing aircraft for the war effort, employing thousands of workers After WWII: Technological innovations pioneered by Southern California s aerospace firms made the industry an important driver of economic growth in the region End of Cold War: Defense budget cuts, base closures, firm consolidations; massive job losses, recession, but also the Space Shuttle, Satellites, UAVs, and SpaceX
4 A Little History.Why California? Weather Infrastructure: test fields, universities, research centers Abundance of skilled labor Strong support industries
5 Why Aerospace is Important Provides a significant number of high-skill, highpaying jobs Aerospace manufacturing jobs have a wage premium over wages in other manufacturing sectors Positive contribution to U.S. trade balance Technological innovation spill-over effects
6 Southern California Aerospace Employment 300, ,000 Ventura Inland Empire San Diego Orange Los Angeles 200, , ,000 50, Source: California EDD, QCEW Data
7 Aerospace Mfg. Wage Premiums 120% Aerospace Products Mfg. Related Instruments Mfg. 114% 100% 80% 60% 48% 71% 54% 62% 40% 20% 25% 0% Average Annual Wage U.S. California Los Angeles $91.7K $105.6K $97.5K $119.6K $96.8K $128.4K Source: California EDD, ES202, 2013
8 U.S. Defense Outlays Billions, 2005 Constant $ 54.1% 60.0% 50.0% 40.0% 30.0% % e 2019e Defense Outlays % of Total Federal Government Outlays 20.0% 10.0% 0.0% Source: Office of Management and Budget
9 Major Programs in Southern California RQ -4 Global Hawk UAS (USAF) developed in San Diego, produced in Palmdale F/A-18 Super Hornet (USN) engineering and production in El Segundo F-35 Joint Strike Fighter (USAF, USN, USMC) - engineering in El Segundo, production in Palmdale X-47B Unmanned Combat Air System (USN) developed in San Diego and El Segundo, produced in Palmdale B-2 Stealth Bomber (USAF) engineering and maintenance in Palmdale James Webb Space Telescope (NASA) developed and built in Redondo Beach Advanced EHF military satellite communications payloads (USAF) developed and built in Redondo Beach Space tracking & Surveillance System for ballistic missile detection and tracking (US Missile Defense Agency) developed and built in Redondo Beach Defense Support System Surveillance satellites (USAF) developed and built in Redondo Beach
10 Composition of U.S. Federal Outlays for Research & Development 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 $Millions Defense Nondefense 81.1% e 52.3% Source: Office of Management & Budget
11 Boeing & Airbus Orders 1,800 1,600 1,400 1,200 1, Boeing Airbus Source: Boeing & Airbus Company Websites
12 Current Issues Civil side of aerospace doing well Defense budget cuts; military restructuring Aging workforce Domestic & Foreign Competition New Opportunities: privatization of space, satellites, UAVs
13 L.A. Jobs Defense Council Growing, attracting, and retaining aerospace companies and investment in Los Angeles County. Fostering Regional Collaboration Assemble high-level advocates who can bring resources to bear (i.e., Red Carpet Team) as part of outreach to companies at risk of leaving as well as those that are candidates for expansion. Mitigate challenges and take advantage of opportunities (federal, international or otherwise) to spur aerospace growth (e.g., cost of doing business, regulations, etc.). Focusing on Dual Regional Strengths Leverage our thick skilled labor markets and significant export capacities for aerospace firms.
14 THANK YOU! Join the Los Angeles Jobs Defense Council For more information contact: JoAnne Stewart (213)
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