By Jenny Vickers
From the September/October 2016 Issue
Earlier this year, the National Science and Technology Council sent the White House a report entitled A Snapshot of Priority Technology Areas Across the Federal Government. The report included a stark warning about the availability of skilled workers for one of the hottest growth sectors in the U.S.: advanced manufacturing.
“A vibrant manufacturing sector needs an equally vibrant workforce, educated in a multitude of fields from engineering to economics. These skilled craftsmen, technicians, designers, planners, researchers, engineers and managers will be in high demand: over the next decade, we will need to fill nearly 3.5 million manufacturing jobs, although 2 million of these positions may remain unfilled due to a skills gap,” declared Tom Kalil, deputy director for technology and innovation of the president’s Office of Science and Technology Policy, in his introduction to the report, which was forwarded to Congress.
At the present time, Kalil said, 80 percent of manufacturers currently report a moderate or serious shortage of qualified applicants for skilled and highly skilled production positions.
Manufacturing plays an outsized role in the U.S. economy: from the greatest economic multiplier of any other sector, to the creation of four additional jobs for every manufacturing job, it is clear that the manufacturing sector is a critical driver to our country’s prosperity and security. These economic impacts grow as we add next-generation technologies: advanced manufacturing produces sophisticated and exclusive products that we can sell around the world, leading to greater economic prosperity and increasing the job multiplier to 16-to-1.
“A vibrant manufacturing sector, especially one invigorated with the latest technologies, requires focused investments along the entire technology innovation pipeline,” Kalil said.
In addition to a skilled workforce, he added, “an innovation pipeline stocked with ideas, from the laboratory bench to the manufacturing shop floor, is required to ‘make it here’ so that we can ‘sell it everywhere.’ The advanced manufacturing processes and products we desire—the types that lead to greater economic prosperity—is the result of knowledge, accumulated through research and development, translated systematically into know-how.”
What follows is an update on locations that are staying ahead of the curve in meeting the essentials needed for sustainable growth in the advanced manufacturing sector.
TENNESSEE LEADS IN ADVANCED MANUFACTURING JOB GROWTH
Tennessee recently ranked No. 1 in the nation for growth in advanced industry jobs by The Brookings Institution. Tennessee grew these jobs by 4.6 percent annually from 2013 to 2015, outpacing the national average of 2.46 percent.
“Our goal has been to make Tennessee the No. 1 location in the Southeast for high quality jobs, and this recognition by Brookings shows we’re making tremendous progress by adding highly-skilled jobs faster than any other state in the country,” Tennessee Gov. Bill Haslam said.
Major assets luring advanced manufacturers to Tennessee include initiatives to expand postsecondary attainment such as the Tennessee Promise and Drive to 55, which aim to increase the number of Tennesseans with a postsecondary degree to 55 percent by 2025 and ensure employers have a pipeline of skilled workers.
To achieve that end, Gov. Haslam introduced the Tennessee Promise in 2015. The first of its kind, the Tennessee Promise offers two free years of community or technical college to eligible high school graduates. More than 16,000 students enrolled in the Tennessee Promise for the fall of 2015. In the first year of the Tennessee Promise, 40 percent of all FAFSA applications came from Tennessee. There has been an 81 percent retention rate among the 2015-2016 class of Tennessee Promise students.
Over the last five years (2010 to 2015), Tennessee has posted the second largest increase among Southeast states for manufacturing GDP growth, which reached $51.1 billion in 2015, according to the U.S. Bureau of Economic Analysis (BEA). That’s 16 percent of the state’s total GDP. Tennessee leads the nation for manufacturing job growth in the last year, with 11,400 net new manufacturing jobs created from June 2015 to June 2016.
Notable advanced manufacturers that have established or expanded operations in Tennessee in the past year include ATC Automation, Eurotranciatura, 3D Systems and General Motors.
In August 2016, advanced manufacturer ATC announced it will invest $10.4 million to expand operations in Cookeville and create 110 new jobs during the next five years.
ATC produces advanced manufacturing equipment for the automotive, medical, energy and consumer products markets. The company designs, engineers and builds assembly lines and test equipment for advanced manufacturers, ranging from small components to complete turnkey systems.
The majority of ATC’s hires will be production engineers as the firm positions to meet growing national and global demand for its advanced manufacturing equipment.
“There are many people and organizations we wish to thank that enable this growth,” said Bill Curran, president of ATC. “It starts with our customers and employees. We have a highly specialized workforce that has allowed the continued growth of ATC. We employ over 100 engineers, with many coming from Tennessee Tech as well as skilled trades from our technical colleges. It includes community partners, the city of Cookeville, Putnam County as well as government support from TVA and TNECD.”
The expansion to the existing Cookeville facility is expected to be completed by mid-2017, with potential new manufacturing starting in the first quarter of next year.
In July 2016, Eurotranciatura, a subsidiary of the world’s largest steel lamination company for electrical rotating machines, announced it will invest $12.6 million to expand its operations in Paris, Tennessee over the next five years, creating more than 170 new jobs.
Eurotranciatura’s investment includes upgrades and new equipment for its existing manufacturing plant in Henry County. Eurotranciatura will also build a roughly 30,000-square-foot distribution warehouse near its current plant to accommodate growth and reduce transportation costs.
“Advanced manufacturing runs deep in Tennessee. Time and time again, when manufacturers choose to locate in our state, Tennesseans are up to the task,” Governor Haslam said. “Tennessee’s highly-skilled workforce and dedication to innovation continue to attract leading manufacturers like Eurotranciatura.”
Eurotranciatura, a joint venture between Euro Group S.p.A and Kuroda Precision Industries Ltd., manufactures steel lamination products for electrical motors and generators. Eurotranciatura’s Paris facility supplies the U.S market for companies such as Stanley Black & Decker, Franklin Electric, ThyssenKrupp, Regal Beloit, Generac and Tecumseh Products.
“Over the last 30 months, we successfully introduced the latest technologies available in the market to provide cost effective solutions for our customers,” Eurotranciatura Chief Operations Officer Matteo Fassio said. “This was also achieved with the support of the local community and the state of Tennessee. This joint effort will secure the creation of additional jobs for Henry County in the near future.”
Renovations to Eurotranciatura’s existing plant are scheduled to be completed by the first or second quarter 2017. Construction of the new warehouse is expected to begin in August 2017.
In May 2016, 3D Systems, a comprehensive 3D products and services provider, announced it will invest $2.9 million to expand its Lawrenceburg operations, creating over 50 new jobs. The company plans to add an additional 25,000 square feet to its facility.
3D Systems’ Lawrenceburg plant is a rapid prototyping and low volume production manufacturing facility specializing in Stereolithography (SLA), ColorJet printing (CJP), cast urethane parts and custom CNC machining.
Stereolithography, the first 3D printing process, was invented by Chuck Hull, co-founder and chief technology officer of 3D Systems, in 1983. This technology uses a photopolymer resin and UV lasers to build objects layer-by-layer, and was quickly adopted by the automotive industry and other manufacturers as a means to accelerate the prototyping process. SLA remains the gold standard for accuracy and surface finish in prototyping today.
The Lawrenceburg office is part of the company’s on demand parts manufacturing service, Quickparts, providing advanced prototyping and manufacturing solutions through cloud-based fulfillment. The expansion will increase 3D Systems’ operational capacity in Lawrenceburg as well as grow the company’s footprint in the region.
“We are delighted to bring more business to the region and increase our fulfillment capabilities for an existing and widening customer base,” Ziad Abou, senior vice president, on demand parts, 3D Systems, said. “We look forward to expanding the reach of our expertise in Lawrenceburg, and to growing the advanced manufacturing and prototyping potential within Tennessee and beyond.”
In April 2016, automotive manufacturer and distributor General Motors announced it is investing $788.7 million and create 781 new jobs for a new high-efficiency engine program and to modernize the vehicle programs at the company’s Spring Hill manufacturing plant, a flexible vehicle assembly plant currently producing the Cadillac XT5 and the GMC Acadia, as well 4-cylinder engines and stampings used in several GM vehicles.
The announcement brings GM’s total investment in the Spring Hill plant in 2016 up to more than $936 million, including an expansion announced in February 2016. The company has announced investments of over $2 billion for Spring Hill since 2010.
“This investment will position GM and its workforce as continued leaders in powertrain manufacturing,” said Arvin Jones, GM North America Manufacturing Manager. “Today’s announcement reinforces our absolute faith in this facility, and our strong commitment to this community and the state of Tennessee.”
MISSISSIPPI TARGETS ADVANCED MANUFACTURING SECTOR
Advanced manufacturing is an important target sector for the state of Mississippi, and it has grown significantly in recent years. From enabling the world’s first synthetic organ transplant to producing 70 percent of the Navy’s fleet of warships and the nation’s largest transformers, advanced manufacturing companies in Mississippi are changing the world. To support this innovation, the state is focused on efforts to help new businesses locate and expand in the state and ensure a highly skilled workforce of the future.
“Mississippi is a manufacturing state and always has been,” said Jeff Rent, Public Relations Manager for the Mississippi Development Authority (MDA). “As a result, the state has long understood the importance of the manufacturing sector and works to prepare a workforce—today and for generations to come—for careers in this important field.”
The state works with its network of 15 community colleges and the state’s research universities to develop and maintain the workforce of the future by customizing innovative training programs to meet companies’ unique training requirements.
Northwest Mississippi Community College’s Advanced Manufacturing Partnership program works with companies throughout North Mississippi to provide them with highly skilled electronics engineering technicians. The school currently partners with companies such as Toyoda Gosei, Schulz, FEUER and Parker Hannifin.
“Partnering with economic developers and research institutions throughout the state, Mississippi recruits new industry to the state and works to help its existing companies grow and create even more jobs for Mississippians,” said Rent.
Advanced manufacturers also partner with East Mississippi Community College’s Center for Manufacturing Technology Excellence (CMTE) which offers manufacturing skills certification classes, M3 Production level certificates, M3 Advanced production skills classes and specialized training. Yokohama Tire Corporation’s manufacturing plant in West Point, Mississippi partners with EMCC to train its employees.
The state’s four research universities further strengthen the state’s strong business environment by offering access to the latest R&D advances across a wide range of sectors, including advanced manufacturing. Abundant R&D opportunities are available through the Center for Manufacturing Excellence at the University of Mississippi, the Mississippi Polymer Institute at the University of Southern Mississippi and the Center for Advanced Vehicular Systems and the Raspet Flight Research Lab at Mississippi State University.
“Advances in automation and advanced materials, combined with a strong workforce which understands advanced manufacturing techniques, play important roles in reshoring manufacturing jobs to Mississippi and the U.S.,” said Rent.
Advanced manufacturing bigwigs such as Continental Tire, hago Automotive and ABB have all recently decided to invest in Mississippi.
In February 2016, the world’s fourth-largest tire manufacturer, Continental Tire the Americas announced it is investing $1.45 billion and creating 2,500 new jobs by locating its most technologically advanced commercial vehicle plant in Hinds County.
“As we plan our growth, we have found this site provides significant advantages for a future tire plant in terms of its large skilled workforce, as well as its ideal location and infrastructure,” said Paul Williams, Executive Vice President, Continental Commercial Vehicle Tires, the Americas. “The state of Mississippi has developed an outstanding business climate and this site met all of our needs for projected growth in the near as well as in the longer term. We look forward to providing well-paying jobs with excellent benefits to the people of the Jackson area within the next few years.”
Continental expects to begin construction of the plant in 2018. The site is nearly 1,000 acres and is well suited for setting up a gradually growing tire plant.
In June 2016, just six months after announcing its move to Mississippi, German company hago Automotive opened the doors to its new operations at the Yellow Creek Port in Iuka. There, the company performs automated stamping with up to 400 tons of processing power, transfer stamping with up to 630 tons of pressing power, laser-welding application, parts washing and cleaning, parts processing and the production of assemblies. The facility also houses a tool-making department and a test laboratory and plans to install MIG welding robots this fall.
“Our first six months in Tishomingo County have proven the decision to locate in Mississippi was the right one for hago Automotive,” said hago Automotive President Joerg Goeppert at the company’s opening. “The support we have received from Mississippi Development Authority, Tishomingo County, Tennessee Valley Authority, the port and the companies around us has been instrumental in our successful transition into the local business community.”
In December 2015, power and automation technology group ABB announced plans to locate the company’s new advanced technology manufacturing facility in Senatobia. ABB will establish operations in the 85,000-square-foot building formerly occupied by Twin Creeks Technologies, 40 miles south of Memphis, TN.
ABB is a leader in power and automation technologies that enable utility, industry and transport and infrastructure customers to improve their performance while lowering environmental impact. At the new facility, ABB will manufacture miniature circuit breakers, many of which were previously manufactured overseas, and the company’s Emax2, the world’s first integrated breaker and power manager.
“We are pleased to locate this manufacturing operation here in Senatobia,” said ABB Low Voltage Products, Americas Region Division Head Chuck Treadway. “We made our decision after an extensive search. We found that Tate County offered an excellent combination of skilled workers, quality of life and a positive business environment.”
The MDA provided assistance in support of the project for infrastructure needs and workforce training. ABB expects to create 200 new jobs by its third year of operation, with another 100 expected to be added by the fifth year in Tate County.
Advanced manufacturers locating in the state can also take advantage of the recently enacted Mississippi Works Fund and the gradual elimination of the state’s franchise tax.
The Mississippi Works Fund allots $10 million for workforce training for 2016 and $5 million each following year. Of its funds, 75 percent are earmarked specifically for job creation. The MDA has the ability to direct these funds as part of recruitment and expansion efforts.
Mississippi’s gradual elimination of its corporate franchise tax is part of the state’s largest tax cut in its history. The tax phase out will diminish the state’s corporate franchise tax over a 10-year period starting in 2018. The law reduces the current $2.50 tax for each $1,000 of capital by $.25 a year until a complete phase out occurs in 2027, as well as an exemption on the first $100,000 of capital.
INDIANA: BIGGEST SLICE OF THE PIE
Indiana is home to the largest state share of advanced manufacturing employment in the nation, with one out of 12 workers employed in the advanced manufacturing sector, and leads the nation with nearly 53 percent of its manufacturing employment in advanced manufacturing.
The data comes from a recent report from the Ball State Center for Business and Economic Research (CBER) and Conexus Indiana. The data also show that the Hoosier State’s advanced manufacturing share is growing. Between 2010 and 2013, Indiana experienced a 1.8 percentage point growth in advanced manufacturing employment, placing it in the top 25 percent nationally.
Education is an important driver of advanced manufacturing growth. Conexus Indiana is designed to capitalize on emerging opportunities in advanced manufacturing and is focused on strengthening Indiana’s workforce. Through its Hire Technology Program, Conexus helps local high schools offer students industry specific course work and skills.
“Programs such as Hire Tech, where students are exposed early on to the concepts of advanced manufacturing, are needed now more than ever as Indiana continues to grow its advanced manufacturing industry,” said Michael Hicks, Ph.D., director of CBER. “Transitioning students into potential employees is urgent, given the fact that advanced manufacturing growth has likely provided a bulk of manufacturing employment growth in Indiana over the past decade.”
Recognizing the importance of focusing the right resources on preparing talent to succeed in the advanced manufacturing sector, Gov. Mike Pence announced a plan in July 2016 to invest $1 billion over the next 10 years to advance innovation and entrepreneurship in the state. The initiative aims to advance the state’s current economic momentum, strengthening and accelerating Hoosier innovation by increasing strategic partnerships, increasing the availability of capital and equipping the workforce with the necessary skills.
“We must build on this economic momentum and increase collaboration between educators, community leaders, industry partners and most importantly, idea generators, to further propel innovation across the Hoosier state for generations to come,” Pence said.
Indiana is home to universities that are recognized as the best in the nation, which include the University of Notre Dame, Purdue University and Indiana University. The state is also home to Vincennes University, which houses the Aviation Technology Center, as well as Ivy Tech Community College, which is the largest single-accredited community college in the nation with more than 170,000 students attending per year and a program dedicated to building a strong workforce in aerospace.
Aerospace is one of the fastest growing advanced manufacturing industries in the state. In fact, the Hoosier State leapt to the top of the 2016 Aerospace Manufacturing Attractiveness Rankings, earning the state a reputation as one of the top aerospace producers in the nation.
Leading manufacturers such as Rolls-Royce, GE Aviation, Alcoa, Raytheon and Praxair together have announced they will invest more than $900 million in Indiana, making plans to create more than 1,200 new jobs.
In October 2015, Rolls-Royce, which recently celebrated 100 years of operating in the Hoosier state, announced plans to invest nearly $600 million in its Indiana research and operations, marking the company’s largest U.S. investment in a decade. Rolls-Royce employs 4,000 people in Indianapolis, including about 1,400 engineers and 1,050 production workers.
“Our new facility will be a state-of-the-art manufacturing center that combines modern production systems and machinery with a highly skilled workforce,” said Marion Blakey, president and chief executive officer of Rolls-Royce North America. “This investment ensures that we can increase our competitiveness in the market, which will benefit both our customers and Rolls-Royce.”
The Indiana Economic Development Corporation (IEDC) offered Rolls-Royce up to $17,000,000 in conditional tax credits and up to $1,425,000 in training grants based on the company’s committed investment. These incentives are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives.
“Indianapolis has emerged as a global competitor in technology and advanced manufacturing, and Rolls-Royce has played an important role in that growth,” said Indianapolis Mayor Greg Ballard. “This is an internationally-renowned company that could have chosen to invest anywhere on the map, and I am very proud that they selected Indianapolis.”
Rolls-Royce also announced plans to be the first partner in the recently-established Purdue Research Park Aerospace District—an Indiana Certified Technology Park—in West Lafayette. The new facility will house an R&D team for Rolls-Royce, providing greater opportunities for the company to conduct collaborative research with the university while training and recruiting future talent in engineering and aviation.
GE Aviation, the world’s largest jet engine manufacturer, also continues to invest in Indiana’s aerospace industry. In March 2014, the company announced it is opening its fifth facility in the state.
The new $100 million jet engine assembly facility, which will be located in Lafayette, will produce new LEAP (Leading Edge Aviation Propulsion) engines. GE Aviation currently employs nearly 1,700 across the state and plans to add more than 200 people at the new facility by 2020.
“We are thrilled by the airline industry’s enthusiasm for the new LEAP engine and its ground-breaking technologies,” said David Joyce, president and chief executive officer of GE Aviation. “We are grateful to the entire Indiana team in ensuring that our Lafayette assembly plant will soon be up and running.”
The IEDC offered GE Aviation up to $3,300,000 in conditional tax credits and up to $332,000 in training grants based on the company’s job creation plans. In addition, the IEDC will provide the community with up to $1,350,000 in infrastructure assistance from the state’s Industrial Development Grant Fund. These incentives are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives.
ADVANCED MANUFACTURING IS IOWA’S LARGEST BUSINESS SECTOR
It’s hard not to think about farming when you think of Iowa, but Iowa wants you to know it is first and foremost a manufacturing state. That’s right, America’s largest producer of corn, soybeans, pigs and eggs brings in three times more revenue from manufacturing than it does from farming. A huge chunk of that revenue—$31.7 billion—is coming from Iowa’s burgeoning advanced manufacturing sector.
Iowa consistently has ranked in the top quartile of states in terms of percentage of GDP from manufacturing; the Hawkeye State also has outpaced the nation in recent growth in manufacturing, surging by 31 percent compared to 27 percent nationwide.
Iowa’s two nationally renowned research universities pump engineers and innovation into the market at an amazing pace; Iowa colleges and universities produce nearly 2,000 engineering graduates per year. A network of 15 community colleges work in conjunction with Iowa’s manufacturing industry to provide specialized training solutions for the workforce.
Nearly 80 percent of all patents issued in Iowa during the past five years directly impacted advanced manufacturing needs. The state’s manufacturing sector is highly specialized; Iowa manufacturers specialize in 14 of the 18 core subsectors, including metal processing, automation precision machinery and environmental control systems.
WE HAVE LIFTOFF IN OKLAHOMA
Oklahoma’s advanced manufacturing industry is soaring with activity in aerospace, energy and other high tech industries and is supported by a hub of collaborative partnerships—from higher education and the Oklahoma CareerTech system to local economic development organizations and industry associations.
Employing approximately 132,000 Oklahomans, manufacturing now generates more than 10 percent of the state’s economy and plays a vital role in many other key industries. From 2010 to 2015, the state saw manufacturing jobs increase by 6.8 percent, outpacing the national average.
“Oklahoma is doing a terrific job in helping our manufacturers understand the changing dynamic of the manufacturing industry and how to best embrace it,” said Deby Snodgrass, Oklahoma Secretary of Commerce and Tourism. “While a great deal of our manufacturing is tied to the oil and gas sector, a large percentage has diversified into aerospace and other high-tech areas. This positions our state well to take advantage of advanced manufacturing concepts.”
For example, the Oklahoma Center for the Advancement of Science and Technology (OCAST), along with the Oklahoma Manufacturing Alliance and i2E (Innovation To Enterprise), form the Oklahoma Innovation Model, an integrated solution for innovation and real-world commercialization. OCAST funds qualified research, i2E then delivers concept validation and secures growth-stage capital.
“The Manufacturing Alliance helps ramp innovation from the concept or startup-stage to full-scale manufacturing implementation,” said Snodgrass. “Together it provides the best return on investment in the creation of high-wage jobs, especially in traditionally underserved rural areas of the state.”
Another example is the Oklahoma Manufacturing Alliance, which works to transfer technology developed through research and push the industry forward.
“The Oklahoma Manufacturing Alliance is where the rubber meets the road—sometimes literally—in the commercialization of technology,” said Snodgrass. “The alliance partners with numerous organizations throughout the state to combine local expertise with state and national resources.”
One of their key partners is Oklahoma’s renowned CareerTech system. CareerTech provides industry and company specific training at no-cost or low-cost through the nationally recognized Training for Industry Program. This training can be delivered on-site, in mobile training units or at a nearby technology training center.
In addition, Oklahoma offers one of the best incentive packages in the nation. The state’s Quality Jobs Program offers up to 5 percent cash back for qualifying jobs. Attractive options include a 5-year property tax abatement in both real estate and personal property and a sales tax exemption on the purchase of machinery, goods and energy used in the manufacturing process.
Consequently, Oklahoma is a hub of aerospace activity with many operations that focus on aerospace and manufacturing parts for the aerospace industry. Two of the latest locations and expansions include Commercial Metals Company (CMC) and Ferra Aerospace, Inc.
In July 2016, Commercial Metals Company (CMC) announced it will locate its second technologically advanced micro mill in Durant, Oklahoma.
This new investment will mirror CMC’s existing micro mill in Mesa, Arizona and will be built with improved technology developed from CMC’s operating experience with the world’s first micro mill, which CMC successfully commissioned in Mesa in 2009. The addition of a second micro mill to CMC’s portfolio of highly efficient, customer focused and cost effective steel production facilities will enhance CMC’s position as a leading supplier of long products in the U.S. market.
The Oklahoma micro mill, utilizing Danieli technology and equipment, is expected to be commissioned in the fall of 2017 and to create approximately 300 jobs in the Durant area. The direct and indirect investment is expected to be in excess of approximately $250 million. CMC expects that its investment will be funded from internally generated capital.
“The location of the mill in Durant, Oklahoma, 80 miles north of Dallas, Texas, will allow us to better serve a growing North Texas market as well as expand into markets in Oklahoma, Kansas, Nebraska, Arkansas and Missouri,” said Joe Alvarado, Chairman, President and CEO of CMC.
Activity and growth in and around the Dallas market has been huge over the past decade. Oklahoma has positioned itself well as a lower cost alternative to serving the rapidly growing I-35 corridor as well as the North Texas area.
“The facility will produce low cost, high quality steel products, which will complement our existing manufacturing capability to better serve our customers,” said Alvarado. “This new micro mill will also complement CMC’s existing recycling and fabrication footprint, enhancing CMC’s ability to further leverage our raw material supply chain and optimize product mix within our existing operations.”
In December 2015, Australian-based Ferra Aerospace Inc. held a groundbreaking in Grove, Oklahoma, for a new 35,000-square-foot plant. The company manufactures aerospace parts, including air frame and wing components. Ferra is a supplier to the some of the largest organizations in the world, including Boeing, Lockheed Martin, Northrup Grumman and Airbus. Ferra expects to employ 100 workers by 2020.
Mike Tackkett, Ferra project manager, pointed to the aerospace growth in Grove, including aerospace company Pride Plating, as a key factor in choosing the community.
“Pride Plating is well known worldwide, and we started using them,” Tackkett said. “We also needed machining suppliers, and Grove was well situated—close to a lot of great suppliers.”
Ferra Director Karl Strauss said the rural setting, the community, state support as well as support from other businesses, were all reasons he’s chosen Grove for the Ferra expansion.
“We could have built in Los Angeles and the city would have said, ‘This is just another business,’” said Strauss. “Everyone in Grove has been friendly and welcomed the company.”
Companies can also take advantage of the state’s low power costs, which are 28 percent below the national average with an average industrial price per kilowatt-hour of 4.35 cents. Oklahoma, which is part of the Southwest Power Pool, is one of the most reliable states when it comes to electricity. Peak demand reserve margins are 38 percent, compared to other regions which are as low as 15 percent.
Asco Aerospace USA, an advanced aerospace manufacturing facility located in Stillwater, points to cost-effectiveness and efficiency as one of the main reasons they are located in Oklahoma.
“The primary reason we are here in Oklahoma is to better connect with our customers and to do it more cost effectively and efficiently,” said Bruce Tifft, plant manager of Asco Aerospace USA.
Asco Aerospace is designed as a state-of-the-art lean manufacturing facility, with all processes integrated in house: machining, heat and surface treatment and assembly of complex machined parts out of titanium, steel and aluminum. While the steel and aluminum lines are operational, Asco is now working on its titanium line.
The location of the plant in Stillwater has proved convenient to Asco, with easy access to its customers in the continent, as well as attractive workforce and training possibilities.
“The state is home to good universities and fosters partnerships with industry,” said Tifft. “Our location in Stillwater, for instance, is the home of Oklahoma State University. We have been able to tailor training programs with Meridian Technology Center in Stillwater to train new graduates to acquire the necessary skills for our industry.”
Oklahoma’s network of 68 higher education and advanced technological training institutions develops a prepared workforce for business. Oklahoma’s certified skills-tested workforce supports diverse, technologically advanced industries.
For example, Enviro Systems, Inc., located in Seminole, supplies environmental controls from some of the largest aircraft manufacturers in the world. With nearly 200 employees, Enviro Systems does business in 55 countries, serving some of the largest names in the aviation industry, including Cessna, Embraer, Pilatus, HondaJet and Sikorsky. The company plans to add 50,000 square feet to its 98,000-square-foot facility and grow its workforce.
Oklahoma is currently focused on increasing the availability of STEM education to middle- and high-school students through programs such as Project Lead the Way which has more than 11,000 6th through 12th grade students enrolled. From 2009 to 2014, the state saw a 29 percent increase in Oklahoma students graduating with STEM degrees.
Oklahoma has identified five key industries—aerospace and defense, agriculture and bioscience, energy, information and financial services and transportation and distribution—to focus on those industries which will grow the economy, including those industries where Oklahoma companies are leading in technological innovation and have a solid competitive advantage.
UTAH: ADVANCED COMPOSITES EPICENTER
Utah is at the epicenter of a burgeoning advanced composites industry. In the early 1970s, Hexcel Corporation began producing carbon fiber in the state. In 1996, Hexcel purchased the composites products division of Hercules, placing Hexcel at the epicenter of Utah’s fully developed composites industry supply chain.
Today, lightweight, stronger-than-steel composite materials have become integral to the aerospace and defense sectors, but they are also essential to a fast-growing list of companies that produce carbon fiber products for everything from high-impact body armor to outdoor equipment, recreational products and high-end sports cars.
According to Val Hale, executive director of the Utah Governor’s Office of Economic Development, manufacturing contributes to approximately 16 percent of Utah’s economy. The industry has grown by 50 percent in the last 12 years and shows no sign of slowing.
“Utah manufacturing is thriving because of the high level of innovation and important collaboration happening between industry leaders,” Hale said. “Aerospace composites manufacturing is a prime example of this.”
Utah has risen to the one of the top states in the nation in the concentration of aerospace employment, ranking third in the nation for aerospace manufacturing attractiveness by PricewaterhouseCoopers (PwC).
Just last year, the Utah Aerospace Pathways program was created when Utah’s aerospace industry formed an unprecedented partnership with government and education leaders. The program addresses a critical workforce need by helping high school students graduate with a certificate in aerospace manufacturing.
Consequently, the program has become a model for other business leaders, including diesel technicians, software/IT and life science industries that have launched—or are planning to launch—their own Pathways programs.
Just last year aerospace giant Boeing completed an expansion of its Salt Lake City manufacturing facility. The company refurbished an 850,000-square-foot building in West Jordan, creating roughly 100 new jobs and millions in capital investment. With it, a 787-9 Dreamliner horizontal stabilizer can be manufactured start-to-finish. The recent progress sets the stage for Boeing Salt Lake to become a major composites manufacturing center.
In less than two years, Boeing transformed a vacant warehouse into a world class composite fabrication production center. As part of Boeing’s strategy to grow its composite hub in the Salt Lake region, the company purchased the West Jordan composite manufacturing building in 2013 and began production at the beginning of this year.
Boeing Salt Lake currently employs more than 760 people in three locations. Employees provide design/build and multisource integration of composite empennage products and flight deck structures, including the 787 vertical fin, the 787-9 horizontal stabilizer, Flight Deck Consoles for all models, assembled components and emergent support. Utah also is home to a Boeing defense team of approximately 250 employees in Ogden and Little Mountain.
While this is a significant development, it contributes to a larger group of aerospace manufacturing operations tied to L-3 Communications, Orbital ATK, Hexcel, Lockheed Martin, Harris, Janicki Industries, ACT Aerospace and Hill Air Force Base.
Aerospace is not the only industry using advanced composites. Ogden-based ENVE Composites, now part of Amer Sports’ Mavic cycling brand, is one of the world’s leading manufacturers of high-end carbon bicycle rims. They are recognized internationally for their sophisticated products—leading cyclists use ENVE in Tour de France, Tour of Utah and other races around the globe.
ENVE utilized various grants and programs provided through Weber State University, the Utah Science Technology and Research initiative and the Utah Governor’s Office of Economic Development to develop the quality control and testing methodologies it required to expand its operations.
Utah aims to strengthen its current leadership in composite manufacturing by adding businesses to its already strong ecosystem and providing support through groups such as the Utah Advanced Materials and Manufacturing Initiative (UAMMI). UAMMI officially opened this month, and will help optimize and expand Utah’s already burgeoning composites manufacturing industry.
One of UAMMI’s focus groups is workforce development. Initial funding of $1 million for UAMMI came from the Utah legislature, with another $1 million provisionally promised in 2017. In addition, in an effort led by the University of Utah, UAMMI received a multi-year, multi-million dollar award to help bolster and diversify Utah’s carbon fiber composites supply chain. The organization also is pursuing grant funding from the U.S. Department of Commerce. Fundamentally UAMMI is a conduit for coordination of education, research and development to optimize composite growth in Utah.
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