Comm S by S cover 8 10/7/02 11:47 AM Page 1 F O R E W O R D President George W. Bush and the Congress created the Commission on the Future of the United States Aerospace Industry to evaluate the current and future health of the industry as well as the challenges that lie ahead for the U.S. workforce and the economy. To accomplish our mission, we commissioned a study on the economic impact of the aerospace industry nationally and on a state-by-state basis, using the best available U.S. government data. This study sought to define the core of the aerospace industry. The resulting data represents that very core — those jobs specifically tied to commercial and civilian aerospace. U.S. Aerospace and Aviation: A State-by-State Analysis examines the civilian and commercial aerospace and aviation industry by employment, wages, payroll, and establishments. The report found that the U.S. civilian and commercial aerospace and aviation industry employed over 2 million workers in 2001. These employees earned an annual average wage of $47,700. While the figures provided by the government are the latest official data, they do not reflect the significant downturn of the industry since September 11, 2001. Since then, the industry has experienced a serious decline, negatively affecting people’s lives and the national economy. The significance of our analysis lies in the illustration of the importance of the aerospace and aviation industry to the economic health of every state economy. California, Texas, and Washington lead by most aerospace and aviation industry metrics. At the same time, the report demonstrates that states like Alabama, Arizona, Georgia, and Kansas are home to strong aerospace and aviation industry clusters – a fact some may find surprising. It should be stressed that these numbers represent the core of the industry. The economic impact of the industry begins with this core but does not end there. The study does not measure the additional jobs generated by the aerospace industry in our states and localities. For example, the contractors that provide security guards or food service workers to NASA Centers are not included. This analysis does include military suppliers, but does not include military facilities such as U.S. Air Force bases. Those jobs, however, are vital parts of our economy but are dependent on the very existence of the U.S. aerospace industry. Without the aerospace industry core, the other jobs would cease to exist and the U.S. economy would suffer for that loss. A strong aerospace industry will enable the United States to defend itself, compete in the global marketplace, maintain a highly skilled workforce, and provide all Americans with the ability to travel safely and securely anywhere in the world. The Commission hopes that this report will allow policymakers, the public, and the media to fully comprehend the economic stakes at hand, as the U.S. commercial and civilian aerospace industry faces the challenges of market forces, homeland security and foreign competition. Robert S. Walker Chairman Commission on the Future of the U.S. Aerospace Industry 1 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY THE COMMISSION ON THE FUTURE OF THE U.S. AEROSPACE INDUSTRY The Commission on the Future of the United States Aerospace Industry was established by Section 1092 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001, Public Law 106-398. The Commission was formed to study the future of the United States aerospace industry in the global economy, particularly in relationship to United States national security, and to assess the future importance of the domestic aerospace industry for the economic and national security of the United States. The Commission will prepare and issue a final report to the President and Congress no later than November 27, 2002. MISSION STATEMENT The Commission shall develop and recommend a series of public policy reforms which will permit the U.S. aerospace industry to create superior technology, excel in the global marketplace, profit from investments in human and financial capital, benefit from coordinated and integrated government decision-making, assure our national security, access modern infrastructure, and give the United States a capacity throughout the 21st Century to reach for the stars. COMMISSION MANDATE The Commission was given a broad mandate by the Congress to study: Q The adequacy of projected budgets of the federal departments and agencies for aerospace research and development and procurement; Q The adequacy of the current acquisition process of federal departments and agencies; Q The procedures for developing and fielding aerospace systems incorpo- rating new technology in a timely fashion; Q The policies, procedures, and methods for the financing and payment of government contracts; Q Statutes and regulations governing international trade and the export of technology; Q Policies governing taxation, particularly with a view of assessing the impact of current tax laws and practices on the international competi- tiveness of the aerospace industry; Q Programs for the maintenance of the national space launch infrastructure; and Q Programs for the support of science and engineering education. 2 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY O V E R V I E W U.S. AEROSPACEAND AVIATION INDUSTRY: A STATE-BY-STATEANALYSIS Is Produced by THE COMMISSION ON THE FUTURE OF THEUNITED STATES AEROSPACEINDUSTRY COMMISSIONERS: White House Appointments Q Dr. Buzz Aldrin, President, Starcraft Enterprises, Sharespace, Starbooster & Starcycler Q Mr. Edward M. Bolen, President, General Aviation Manufacturers Association Q The Honorable John W. Douglass, President and CEO, Aerospace Industries Association Q Dr. Neil de Grasse Tyson, Director, Hayden Planetarium Q The Honorable Robert S. Walker, Chairman, Wexler & Walker Public Policy Associates Q Ms. Heidi R. Wood, Executive Director, Morgan Stanley Congressional Appointments Q Mr. R. Thomas Buffenbarger, International President, International Association of Machinists & Aerospace Workers Q The Honorable Tillie K. Fowler, Partner, Holland & Knight Q The Honorable John J. Hamre, President & Chief Executive Officer, Center for Strategic & International Studies Q The Honorable F. Whitten Peters, Partner, Williams & Connolly Q The Honorable William Schneider, President, International Planning Services, Inc. Q Mr. Robert J. Stevens, President and Chief Operating Officer, Lockheed Martin Corporation STAFF CONTACTS Charles H. Huettner, Executive Director Paul F. Piscopo, Staff Director Melissa A. Sabatine, Deputy Staff Director Inquiries by the media should be directed to Melissa Sabatine (703) 602-1515, ext 110 FOR MORE INFORMATION Commission on the Future of the United States Aerospace Industry 1235 Jefferson Davis Highway, Suite 940 Arlington, Virginia 22202 Phone: (703) 602-1515 Fax: (703) 602-1532 www.aerospacecommission.gov 3 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY T A B L E O F C O N T E N T S INTRODUCTION 5 U.S. KEY FINDINGS 6 STATE KEY FINDINGS 8 INDUSTRY SEGMENTS KEY FINDINGS 10 TOP STATES 11 UNITED STATES OVERVIEW 13 STATE OVERVIEWS 14 STATE APPENDICES 66 METRO KEY FINDINGS 86 METRO APPENDICES 100 DEFINITION OF THE AEROSPACE AND AVIATION 108 METHODOLOGY 109 4 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY I N T R O D U C T I O N This study, U.S. Aerospace and Aviation Industry: A State-by-State Analysis, provides policymakers, industry leaders, the press, and others with objective, comparative economic data on the core civilian and commercial aerospace and aviation industry in the United States. The report examines the industry by direct employment, wages, establishments, and payroll. The first section of the report provides an overview of the key findings from a national and state perspective. The second section consists of aerospace and aviation industry profiles for the United States and each state, the District of Columbia, and Puerto Rico. The next section gives detailed appendices providing statistical data since 1996. Aerospace and aviation industry segment data and state rankings also are provided. Finally, the report includes findings for the 10 leading metropolitan areas. The statistics used in this report are based on the most recently available U.S. government data from the Bureau of Labor Statistics (BLS). The aerospace and aviation industry definition used to generate the metrics in this report include: aircraft and parts manufacturing; guided missiles and space vehicles; search, detection, and navigation; and air transportation. Other industry segments covered are satellite communications and space research and technology. Civilians working for NASA and its space and research centers such as Ames Research Center in California, Glenn Research Center in Ohio, and the Kennedy Space Center in Florida are included in this analysis under space research and technology. The data contained in this report represent core aerospace and aviation industry employment, wages, payroll, and establishments. Only those industries that directly create aerospace and aviation products and services are captured in this study. It does not include the hundreds of thousands of indirect jobs that exist to support the aerospace and aviation industry. Due to the limitations of the Standard Industrial Classification (SIC) system, this report is not able to quantify those components of the military that are engaged in aerospace and aviation-related activities. The SIC system classifies all armed forces establishments together. Consequently, this report only examines the civilian and commercial components of the aerospace and aviation industry. The specific SIC codes used to define the industry are provided at the end of the report. The North American Industrial Classification System (NAICS) codes for the aerospace and aviation industry also are provided, although NAICS-based government statistics are not yet available for employment, wages, payroll, and establishments. 5 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY U . S . K E Y F I N D I N G S U.S. Aerospace and Aviation Industry: A State-by-State Analysismeasures the economic importance of the U.S. civilian and commercial aerospace and aviation industry. Employment statistics show that the industry added jobs every year between 1996 and 1999. However, aerospace and aviation industry employment began to shrink in 2000, losing some 26,000 jobs between 1999 and 2001. U.S. EMPLOYMENT uThe U.S. aerospace and aviation industry employed 2 million workers in 2001. uU.S. aerospace and aviation employment grew by 138,200 jobs between 1996 and 2001. uNearly all of this growth was concentrated in the air transportation industry, which includes passenger air services, air cargo services, courier services, and airport services. uAir transportation services employment grew to 1.3 million in 2001, an increase of 163,400 workers since 1996. uMany aerospace and aviation industry segments lost jobs between 1996 and 2001, including: - search, detection, navigation, and aeronautical manufacturing (-9,000); - guided missiles and space manufacturing (-8,600); - satellite communications services (-3,900); and - space research and technology (-3,000). uAircraft and parts manufacturing industry employment in 2001 was nearly unchanged from 1996. After reaching a high of 530,000 workers in 1998, the industry shed 67,000 jobs for a total of 462,000 workers in 2001. uThe aerospace and aviation industry employed 15.6 out of every 1,000 workers in 2001, down from a high of 16.4 in 1998. U.S. WAGES uU.S. aerospace and aviation industry employees earned an annual average wage of $47,700 in 2000. uAerospace and aviation industry wages were 35 percent higher than the U.S. annual average wage of $35,300 in 2000. This is down from a 43 percent wage differential in 1996. uAerospace and aviation wages grew by only five percent between 1996 and 2000, compared with a growth rate of 11 percent for U.S. total wages. uThe best paid aerospace and aviation workers were employed in the guided missiles and space vehicles industry ($66,500), satellite communications ($66,100), and search and navigation ($65,100) in 2000. 6 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY U . S . K E Y F I N D I N G S U.S. PAYROLL uU.S. aerospace and aviation payroll reached $98 billion in 2000, up from $86 billion in 1996, adjusted for inflation to 2000 dollars. uPayroll in the U.S. aerospace and aviation industry grew by 14 percent between 1996 and 2001. This was slower than the total U.S. payroll, which grew by 22 percent during the same period, adjusted for inflation. U.S. ESTABLISHMENTS uEstablishments in the aerospace and aviation industry reached 21,900 in 2000, up from 20,300 in 1996. OVERVIEW OF THE U.S. AEROSPACE AND AVIATION INDUSTRY 1996 1997 1998 1999 2000 2001 Employment 1,896,000 1,956,000 2,041,000 2,061,000 2,058,000 2,035,000 Wages $45,500 $46,700 $47,200 $48,100 $47,700 NA Payroll $86.2b $91.3b $96.4b $99.2b $98.1b NA Establishments 20,300 20,700 21,400 21,700 21,900 NA 2001 employment data are preliminary. 2000 wage, payroll, and establishment data are the most recent available. Wage and payroll data are adjusted for inflation to 2000 dollars. Source: U.S. Bureau of Labor Statistics 7 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY S T A T E K E Y F I N D I N G S U.S. Aerospace and Aviation Industry: A State-by-State Analysisprovides statistics on civilian and commercial aerospace and aviation employment, wages, payroll, and establishments for all 50 states, the District of Columbia, and Puerto Rico. Not surprisingly, California led the nation by aerospace and aviation industry employment, payroll, and establishments. STATE EMPLOYMENT uCalifornia led the nation in aerospace and aviation industry employment in 2001, with 293,700 employees. uTexas ranked second with 184,200 employees in 2001, up from 168,600 in 1996. uWashington, Florida, and New York rounded out the top five states by aerospace and aviation industry employment in 2001. uTexas ranked first in aerospace and aviation job creation between 1996 and 2001, adding 15,600 jobs to its economic base. uIllinois and Arizona were the second and third fastest growing aerospace and aviation industry states between 1996 and 2001, adding 12,500 and 12,100 jobs, respectively. uCalifornia’s aerospace and aviation industry lost the greatest number of jobs between 1996 and 2001, down by 14,400 jobs. uMissouri followed California, losing 8,100 aerospace and aviation jobs during the same period. uWhen controlling for population size, Washington led the nation with 44 aerospace and aviation jobs per 1,000 workers in 2001. Kansas ranked second with 43 aerospace and aviation jobs per 1,000 workers. STATE WAGES uThe District of Columbia led the nation in aerospace and aviation industry wages with its 1,100 workers earning an annual average wage of $64,600 in 2000. uConnecticut and Washington ranked second and third nationwide with average wages of $61,000 and $57,100, respectively, in 2000. Both of these states have large and vibrant aerospace and aviation industries with numerous employees. uEmployees in the aerospace and aviation industry in Kansas earned an average wage of $47,400, 62 percent more than the $29,400 average statewide wage, the highest wage differential in the country. uAerospace and aviation industry wages were 59 percent higher in Kentucky and 54 percent higher in Washington than average state wages in 2000. 8 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY S T A T E K E Y F I N D I N G S STATE PAYROLL uCalifornia, Texas, and Washington led the nation in aerospace and aviation payroll in 2000. uTexas was the only state to see its aerospace and aviation payroll increase by more than $1 billion between 1996 and 2000. STATE ESTABLISHMENTS uCalifornia was the nation's leading state by aerospace and aviation establishments in 2000, with more than 2,800 separate establishments. uTexas, Florida, and New York followed California, each with more than 1,200 aerospace and aviation establishments in 2000. A SNAPSHOT OF SELECT STATES AND THE AEROSPACE AND AVIATION INDUSTRY Ranked by 2001 2000 2000 2000 Employment Employment Wages Payroll Establishments 1. California 294,000 $53,900 $16.1b 2,800 2. Texas 184,200 $48,300 $9.0b 1,700 3. Washington 117,600 $57,100 $6.7b 700 4. Florida 114,300 $41,400 $4.8b 1,600 5. New York 97,100 $44,600 $4.4b 1,200 2001 employment data are preliminary. 2000 wage, payroll, and establishment data are the most recent available. Source: U.S. Bureau of Labor Statistics 9 COMMISSIONONTHE FUTUREOFTHEU.S. AEROSPACEINDUSTRY