Defying Expectations

The year that just ended defied expectations in the aerospace industry.

That is the view of Michelle Iturralde, a market executive for Bank of America and head of its aerospace division in Los Angeles.

An 80-year-old segment of the North Carolina-based financial institution, aerospace has remained an important part of the San Fernando Valley region’s economy.

It encompasses the big players, such as Aerojet Rocketdyne in Chatsworth and Northrop Grumman Corp. and Lockheed Martin Corp., which have facilities in Palmdale, down to the small machine shops that do work for the big companies. 

Iturralde said she has seen greater efficiencies in the aerospace industry, as well as higher margins that offset wage inflation last year.

Iturralde also has seen noticeable improvements in the supply chain, which was a big challenge for the industry at the onset of the global pandemic nearly four years ago.

“That dynamic has changed, the supply chain and production is back and there is huge demand for the (original equipment manufacturers) and the aerospace industry in general,” she said. “It is growing.”

The total value of the global aerospace and defense industry is forecast to reach $1 trillion in 2026, Iturralde said, with the overall space economy reaching $1.1 trillion by 2030. That compares to the global space economy doing $469 billion in business in 2021, she said.

Iturralde attributed the increase to government commitment to research and development.

“The government and military play an important role in R&D and over the past decade or so have opened up the door to privatization of small to medium-sized companies to bring technology and innovation from the private sector to help solve for their commitment to continue to support homeland security and continue to support the largest military on the planet,” she said.

Growth in the market

But it is the emergence of private companies such as Long Beach-based Rocket Lab USA Inc. and SpaceX, which is based in Hawthorne, that has been a huge growth benefit to the labor force in Southern California and Los Angeles in particular.

Iturralde estimated that 50% of the emerging space companies that are raising noteworthy funding rounds “are in our backyard here in Southern California; in Pasadena, Los Angeles, Culver City, Playa Vista.

“This is another point that shows the growth and opportunity for Los Angeles to have a big impact in global space exploration,” she said.

NASA had for decades been in control of innovation in the space industry and in launching and infrastructure and satellite imagery, Iturralde continued. 

“Over the last decade or so, we have had the opportunity to privatize the capabilities in space, such as launch services, infrastructure and satellites,” she added. “Having that opportunity for the privatization in the sector has allowed the private sector to raise funds to support the ideas and innovation brought to the U.S. government and governments around the world to continue to improve how we can grow this sector.”
Key to that growth is employees to work at the aerospace companies.

Iturralde called the labor force in Southern California “like nowhere else in the world” given the amount of research and the number of universities focused on science and technology. 

“That is why Los Angeles continues to attract companies to be headquartered in (the city),” she said. “Because of the talent, the human capital, the resources that we are able to commit to here locally.”