Aerospace clusters are evolving throughout the world, said Kevin Michael, vice president of ICF International.
California is on the decline. Two new clusters on the rise are Mexico and the Southeastern US. The Netherlands and Singapore are successful, long-term clusters.
California was the premier aerospace cluster for decades, but its demise began when Lockheed chose Georgia as the location to build the C-130. The founding of Airbus was not good news for SoCal, and neither was the end of the Cold War. The acquisition of McDonnell Douglas by Boeing in 1997 further precipitated the decline of SoCal.
Aerospace jobs declined by 67% since 1990 to four years ago and compared with two million jobs in World War II. California viewed as not friendly to business and land costs skyrocketed.
The Netherlands is a success story was built around Fokker, which went away. But what became Schiphol Airport was the start of an aerospace hub. Aerospace evolved into a commercial business, the KSSU consortium of airlines (KLM, SAS, Swissair, UTA) cooperated for aircraft purchases and third-party maintenance.
After Fokker went bankruptcy, Stork emerged as a major supplier as did other companies that supply Airbus, Boeing and others.
Singapore is the home of ST Aerospace, one of the top-tier third party aerospace MRO and P2F conversion companies in the world. Singapore geographically was well suited to serve the Asian region. Engineer and R&D centers and advanced manufacturing were located here. Large government investment in aerospace investment occurred.
Mexico is a growing aerospace cluster, but the real growth has been more recent. It wasn’t until the late 1990s that aerospace became a growth opportunity following the approval of the North American Free Trade Agreement (NAFTA).
In 2006 Bombardier opened a facility that really spurred growth, Michaels said. “California was just to punishing,” and many companies went to Mexico.
Importantly, Mexico did not pursue developing an aircraft but rather focuses on being a supplier to the OEMs, establishing MROs and becoming an engineering center.
The Southeastern US has “always” had investment, but the real spur was a loss. EADS/Northrop Grumman won the KC-X tanker competition after close cooperation with Alabama. EADS lost this award on a protest by Boeing, but this event spurred Boeing to choose Charleston (SC) for the 787 assembly plant, Alabama is chosen by Airbus for the A320 assembly plant and suppliers are locating there.
Embraer opened a business FAL in Florida, which is less expensive than Brazil and easier with regulations and taxes. Boeing is spreading its engineering footprint in the Southeast.
The Southeast is not unionized.
The Southeast is the hot spot for aerospace clusters in the world.
What does this mean for the Pacific Northwest?
Competition isn’t between states, or cities, or companies, it’s between clusters. The Pacific Northwest is the largest cluster in the world. The PNW Cluster (Seattle, Spokane, Portland and British Columbia) has more than 150,000 jobs. It competes with the large Southeast cluster, which is dominated by right-to-work states.