Despite Costs, CA Ranks High For Aerospace

California ranked in the top five states for aerospace manufacturing, according to a new report released last month by professional services firm PwC. The state came in at No. 3, behind Washington State and Georgia, based on six criteria. Scott Thompson, a partner and aerospace and defense leader at the company, said that California scored high when it came to infrastructure (No. 3), economy (No. 2) and the presence of the aerospace industry (No. 2). The state is second only to Washington for the number of aerospace companies located here, he added. Where California was the weakest was in cost, which includes PwC looking at energy, transportation, labor and construction costs. It was No. 49 in that category. When it came to tax policy, California showed an improvement over last year’s report and moved up to No. 22 from No. 50. That change had a lot to do with PwC changing the source of its metrics. It had been using a source where the underlying data was not being updated. So it found another source that did a better job at evaluating the overall tax burden because the methodology used looked at total state tax revenue as a percentage of the state domestic product, Thompson said. “That way they are not just looking at the statutory rate, you’re not just looking at certain taxes and you are also inherently including any tax incentives that the state may have given,” he added. The U.S. ranked No. 1 out of more than 200 countries in aerospace manufacturing. The industry led the world with $244 billion in sales last year. Aerospace is also the nation’s No. 1 net export, bringing in $132 billion in revenue. “So, it is important to the nation’s economy and balance of trade,” Thompson said. In the report’s comments on the state, it mentions that with a balmy climate and robust technology sector it hosts a growing hub of space-related ventures, such as SpaceX, in Hawthorne, and Rocket Lab, in Huntington Beach and other startups. “California is also home to three NASA research centers and the Mojave Air and Space Port, which includes more than 60 companies engaged in aerospace design, flight testing, and research,” the report said. Southern California has two NASA research centers – Armstrong Flight Research Center at Edwards Air Force Base and Palmdale, and Jet Propulsion Laboratory in La Canada-Flintridge. At the Mojave Air and Space Port, companies located there include The Spaceship Co., which builds the space vehicles used by Virgin Galactic; Scaled Composites, a subsidiary of Northrop Grumman Corp.; and Masten Space Systems. There is a lot of private investment in space exploration and the NASA research centers play an in important role in partnering with private ventures to develop the next generation of technology, Thompson said. “There is a tremendous amount of interest right now in space exploration,” he added. “It starts with getting back to the moon, establishing a permanent presence on the moon and then going to Mars.”