Ready and Retooling for an Aerospace Boom

As aerospace manufacturing moves south and our state works to recruit those companies, the Upstate’s existing bounty of manufacturing facilities and machine shops could become part of a hungry supply chain.*

We have an opportunity to rapidly grow our aerospace cluster by getting ahead of the curve. Right now, companies around the nation are machining parts for extractive industries that work with materials from the earth such as metals, minerals and aggregates for consumer use. In that sector, economic shifts are causing a shedding of jobs and firms. For many businesses, moving into aerospace has provided a solution. They’re re-outfitting their machine shops to service the aerospace sector, while diversifying their customer base – and revenue streams. A handful of Upstate companies are jumpstarting the trend locally. They know that all of the ingredients are here; it’s just the recipe that needs to change.

• Automation Engineering in Greenville is attempting to make the shift. Its client base is in oil and gas, and now the company is tapping into the aerospace supply chain expanding in South Carolina.
• Berrang Inc., a first-tier supplier of fasteners for BMW, is now considering expanding its services in South Carolina beyond automotive and into the growing sector of the state’s aerospace cluster.
• Greenville-based private equity firm Premo Ventures works with some of those companies in other parts of the U.S., and has a focus on helping small manufacturers in South Carolina retool their shops to serve aerospace as well.

While Boeing’s presence in Charleston has encouraged the development of the state’s aerospace supply base — which includes more than 160 aviation and aerospace-related companies statewide and 50 in the Upstate — the greatest opportunities for retooled shops are with tier one and tier two suppliers.* These aren’t easy changes for a machine shop: aerospace’s stringent quality requirements likely require overhauls to quality control and IT.

As we continue to recruit business to the region, a stronger aerospace supply chain helps make the case for South Carolina as the best landing pad for an aerospace manufacturer. By retooling existing facilities, the Upstate can expand its aerospace activity from within, and create more fertile ground for companies who aren’t here yet.

The Good News About SC Aerospace

There was a lot to be excited about at the South Carolina Aerospace Conference and Expo held for two days in Columbia beginning Aug. 24. Two studies released at the show revealed the solid upward trajectory for our aerospace cluster, and good news came from all aspects of the cluster:

• Aerospace already represents 6.3 percent of South Carolina’s economy. The total economic impact of aerospace in our state, excluding airports, is $19 billion and 100,000 jobs.
• The cluster’s economic impact has grown to $19 billion, up $2 billion from the last assessment in 2014.
• For every 10 jobs created in the private sector component of the aerospace cluster in South Carolina, another 13 jobs are created elsewhere in the state’s economy.
• The skills gap in aerospace is much smaller than in other manufacturing.

Employment growth in aviation has far outpaced that of the overall economy in South Carolina. The biggest sources of the growth have been in manufacturing and air transportation and support services, with the lion’s share of jobs going to manufacturing. The SC Council on Economic Competitiveness has pointed out that this growth echoes the successes in our state’s automotive industry.

What’s more, the industry is diversifying. Not just in aircraft manufacturing, but also in engine manufacturing (14 percent at $379.5 million), instruments manufacturing, and other products (4 percent at $117 million). This infographic from the Council on Competitiveness shows the most in-demand jobs and other statistics. See the full study here.

The Right Time to Retool?

A second AviationWeek study of aerospace in the Southeast looked at trends in suppliers with fewer than 500 employees. It clarifies the progress and potential in our state, where the vast majority of firms have fewer than 10 employees.

The firms surveyed plan to grow their workforce by 31 percent by the end of 2017, and 91 percent of respondents in South Carolina indicate they would consider hiring someone with no prior aerospace experience who had an aerospace-specific manufacturing certification through a technical institute. Our technical schools have shown an excellent ability to respond to industry needs, so suppliers who leverage their existing infrastructure into aerospace can likely expect a strong response from educators preparing our workforce.

With a technical education system already oriented toward advanced manufacturing, and a nascent group of investors and companies ready to explore new options for existing hardware, it may just be a matter of time before a trend of retooling for aerospace makes a major impact on manufacturing in our state.

*Supply Chain Primer:

An OEM (original equipment manufacturer) is a company that makes a product for the final consumer marketplace. Think: Boeing or BMW. Tier one companies have a direct relationship with OEMs to supply components, sub-assemblies or materials that are used in the finished product. Tier two suppliers are key to tier one companies, and they may or may not have a direct relationship with the OEM. Each type of company plays an important role in the manufacturing and supply chain processes and presents an opportunity for business growth.