story by Michael Tilley
mtilley@thecitywire.com
Former U.S. Air Force Brig. Gen. Robert Mansfield Jr., and Arkansas Economic Development Executive Director Grant Tennille offered in separate interviews similar formulas for what is needed to grow the aerospace industry in Arkansas: Education support, infrastructure and incentive support and awareness.
Mansfield and Tennille were in Fort Smith on Wednesday (Mar. 5) at the 2013 Arkansas Aerospace Summit.
Based in Fort Worth, Texas, Mansfield is executive director of the Center of Aviation and Aerospace Leadership with Embry-Riddle Aeronautical University. He said the U.S. and global aviation sector have seen rough years, but he is optimistic on the sector’s future.
“We’re going to see growth. Moderate, and probably spotty,” Mansfield said after his 2012-2013 industry report during a Wednesday morning summit session. “Everything hinges on how our national economy and the global economy recovers. ... There is a huge pent-up demand” for new airplanes and aviation and aerospace products.
SPACE-FOCUSED BILLIONAIRES
Mansfield said emerging technology and uses for unmanned aerial systems in the U.S. will drive industry growth “once national standards are in place.” Also, the growing number of billionaires – like Elon Musk with SpaceX and Amazon founder Jeff Bezos with Blue Origin– funding or directly involved in space ventures will fuel industry growth.
“They are absolutely going to get us into space because they have the billions,” Mansfield said, adding that investment by billionaires will create numerous opportunities for support companies.
The Dragon capsule developed by SpaceX has twice successfully delivered supplies to the International Space Station.
Arkansas is in “a good position” to be a player in capturing aerospace industry growth because the state ranks high – 12th nationally in terms of the value of aerospace exports – in industry output. Such rankings generate awareness within the sector.
“To the (aerospace) companies that (Arkansas ranking) says,’Well, there is an infrastructure here,’” Mansfield said.
ARKANSAS AWARENESS
Arkansas, according to Mansfield, also has the 19th largest “aviation cluster” in the U.S., and the size could be a big tool in industry recruitment and retention if industry and state officials work together on growing the sector.
“Arkansas appears, I think, to have the basis to draw more growth by building off its cluster,” he explained.
Also, Arkansas is centrally located in the U.S., and is “close enough to aviation alley” – a band of aerospace companies and suppliers located between San Antonio, Texas, and Wichita, Kan. – to benefit from industry growth, Mansfield said.
But to capture the growth he sees on the horizon, Mansfield said “the groundwork needs to be laid now” by state officials. In addition to the usual incentives and creating a competitive business climate, the groundwork includes building global awareness of what Arkansas has to offer. He advised that Arkansas officials frequently attend the international airshows and global conferences in Europe, the Middle East and other global aviation centers.
“Arkansas has to be known. ... The market isn’t always going to automatically come here, especially in a global economy,” Mansfield said.
BETTER CONNECTIONS
Tennille, the state’s jobs chief, said a top priority is capitalizing state resources to “grow the Arkansas (aerospace) industry at a faster rate than some of our sister states.”
Like Mansfield, Tennille sees signs of improvement in the sector, and believes Arkansas officials must better connect education with industry needs, do more to improve the physical infrastructure at Arkansas airports and do a better job of ensuring state tax codes and regulations “aren’t out of step” with the industry.
He cited a recent example in which a company planned to fly aircraft to Arkansas for evaluation prior to a transaction. The transaction wasn’t taking place in Arkansas, but state sales tax code was unclear on the tax liability, and company officials wanted to know if they could bring the planes to Arkansas or instead fly them to another state. AEDC officials worked with the Arkansas Department of Finance & Administration to resolve the matter. But the uncertainty could have been a deal killer.
“It opened my eyes that maybe, unintentionally, we have things in the tax code that are unclear” for the aerospace industry, Tennille said, adding that Arkansas needs to ensure similar “tax treatment” for aerospace companies as compared to other states.
WORKFORCE SUPPORT
There is more work to be done, but Arkansas “has the beginnings of a workforce that can provide you with all the skills you need,” Tennille told the luncheon audience.
However, he said state officials “desperately need” guidance from industry officials on real-time workforce needs. Tennille said “incredibly close communication” between the industry and education providers will help get the most out of state resources and provide training that best fits workforce demand.
“We need to get much closer to just-in-time (job training) for you,” Tennille explained.
And like Mansfield, Tennille said Arkansas has an advantage in being centrally located.
“We are an easy hop from both coasts,” he said.
An advantage Tennille cited that no one else mentioned was that Arkansas is a right-to-work state. In an interview prior to his luncheon address, Tennille admitted it may not be popular to mention right-to-work within aerospace circles, but labor costs are a big factor in expanding or relocating aerospace production.
“The cost of labor is a huge question ... considering the low margins in the industry,” Tennille told the crowd.