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The Journal Gazette

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Sunday, August 11, 2019 1:00 am

For aerospace, state is 6th

Group praises study, says work is keeping grads here

SHERRY SLATER | The Journal Gazette

Indiana ranks sixth nationwide in a study of states most attractive to the aerospace and defense industries, according to consulting firm PwC.

Rick Howard, chairman of the Northeast Indiana Defense Industry Association, wasn't surprised.

“Our ability to manufacture things for multiple industries is world class,” he said, adding that the automotive and orthopedic industries are also supplied by the region's manufacturers.

The 2019 aerospace manufacturing attractiveness rankings were based on 30 metrics. Researchers said including diverse datasets increases the study's validity.

Indiana ranked second nationwide in the tax policy category, seventh in economy and 10th in industry, according to data released in late July. The Hoosier State failed to crack the top 10 in cost, labor and infrastructure.

Under each of the six main categories were up to seven specific subcategories. For example, included under the cost column were energy cost, transportation cost, labor cost, labor productivity and construction cost. Tax policy included only corporate and individual income tax rates.

Howard, who is also a Raytheon Co. program manager, agreed that Indiana is strong in the tax policy, economy and industry categories.

He also cited the state's relatively low cost of living as an asset, along with access to top-notch engineering programs at Purdue University and Rose-Hulman Institute of Technology.

The challenge is keeping the graduates in the state, a problem the Northeast Indiana Regional Partnership and others are working to address, Howard said.

Last month's report ranked the following states as the top five, in order: Washington, Georgia, California, Michigan and Illinois. Washington is home to Boeing Commercial Airplanes, the world's largest aircraft manufacturer and the state's largest private employer.

As released, the study includes narratives on those five highest-ranked states. At The Journal Gazette's request, a researcher who contributed to the study provided similar commentary on Indiana.

“Indiana's sixth-place ranking in PwC's 2019 Aerospace manufacturing attractiveness rankings is supported by the state's strong economy, infrastructure, industry and tax policy,” she wrote. “With its business-friendly policies, the state has continued to attract investment from major (aerospace and defense) companies such as Rolls Royce, Raytheon, GE Aviation, BAE Systems and Arconic.”

In February, Rolls-Royce announced it has bid on a contract to build new engines for the Air Force fleet of B-52s. If chosen, the company will do the work in Indianapolis, officials said. In April, Raytheon was awarded an Air Force contract for engineering and support services, amounting to more than $70 million.

“Indiana has a strong manufacturing and automotive base, which provides (aerospace and defense companies) with a pool of skilled workers and engineering and technology talent,” the researcher wrote. “With future aerospace needs in mind, several universities in the state offer courses to prepare students for jobs in (the industry), and Purdue University houses a renowned technology center dedicated to aerospace research.”

The global aerospace and defense industry reported $81 billion in operating profit last year, setting a record. 

The PwC study also ranked countries worldwide. The United States ranked first overall. Canada, Singapore, the United Kingdom and Australia, in order, made up the rest of the top five.  

PwC, formerly known as PricewaterhouseCoopers, is a London-based multinational professional services network. 

The firm's researchers say the sixth annual report “can be a helpful tool in planning for future growth, enhancing manufacturing supply chains and reexamining costs.”

They expect the industry to continue growing this year, driven by increased U.S. and European defense spending and projected aircraft deliveries. Last year, new aircraft deliveries increased by 8% to a record 1,606 large aircraft.

As the U.S. aerospace and defense industry grows, member manufacturers are increasingly competing for talent, according to the report.

“The industry should increase its appeal to young people to help establish a pipeline of future talent,” the study's authors wrote, citing an international robotics competition as one such effort.

The Northeast Indiana Defense Industry Association, which includes 39 members in 20 counties, uses part of its modest budget to support education-related efforts, Howard said.

The organization recently donated $2,500 to support Northern Indiana TechFest, an annual event that encourages high school students to explore science, technology, engineering and math.

sslater@jg.net