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
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?
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
A Little History.Why California? Weather Infrastructure: test fields, universities, research centers Abundance of skilled labor Strong support industries
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
Southern California Aerospace Employment 300,000 250,000 Ventura Inland Empire San Diego Orange Los Angeles 200,000 150,000 100,000 50,000 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: California EDD, QCEW Data
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
U.S. Defense Outlays 800.0 700.0 600.0 500.0 400.0 Billions, 2005 Constant $ 54.1% 60.0% 50.0% 40.0% 30.0% 300.0 200.0 100.0 0.0 12.6% 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016e 2019e Defense Outlays % of Total Federal Government Outlays 20.0% 10.0% 0.0% Source: Office of Management and Budget
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
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% 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015e 52.3% Source: Office of Management & Budget
Boeing & Airbus Orders 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Boeing Airbus Source: Boeing & Airbus Company Websites
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
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.
THANK YOU! Join the Los Angeles Jobs Defense Council For more information contact: JoAnne Stewart (213) 236-4837 JoAnne.Stewart@laedc.org www.lajobsdefensecouncil.com