Why Are Aerospace Companies Thriving in California?
By Debbie Gregory.
What makes California so appealing to the aerospace sector, which for decades has been one of the state’s signature industries?
The state offers a workforce edge that’s significant enough to balance out the high costs and obtrusive regulatory environment. But what tips the scale is the role local and regional officials play in helping these companies succeed. They know it’s a challenging business climate, and they work hard to mitigate it. The aerospace and space business in particular is high revenue generation, it’s high-paying jobs, so it’s a win-win to keep the industry in the state.
The Los Angeles Economic Development Corporation (LAEDC) is a nonprofit, public-benefit organization that works to guide economic development and create more widely shared prosperity. LAEDC, along with help from the state and the City of Los Angeles was responsible for keeping L3 Technologies in Torrance, CA.
“The bigger issues were cost and how to get into a less costly state that’s not taxed so heavily and isn’t so expensive in terms of commercial and residential real estate,” said Glenn Grindstaff, L3’s vice president of human resources and administration.
Before he knew it, says Grindstaff, resources were made available, allowing the company to remain in Southern California.
The California State Employment Training Panel offers training reimbursement, allowing for personnel growth or moving opportunities that require training new staff.
The California Competes Tax Credit, administered by the Governor’s Office of Business and Economic Development (GO-Biz) waives part of the tax liability for capital expenditures, allowing for expanded facilities and equipment.
California SmartMatch, administered by LAEDC, help OEMs locate suitable suppliers and supply chain participants.
State Assembly member Autumn Burke has sponsored AB 3197, a bill that would treat property used in spaceflight as business inventory, reducing an unnecessary tax burden on aerospace companies.
Assembly Bill 427 is also on the table in Sacramento. It would establish a 17-member California Aerospace Commission that would serve as a central point of contact for aerospace industry businesses.
“Everything in support of aerospace is hot right now,” says Judy Kruger, LAEDC’s director of strategic initiative and cluster development for the aerospace & defense and advanced transportation sectors. “There is a renewed interest in supporting the aerospace industry in Sacramento, which is fantastic to see. AB 3197 should pass easily — I didn’t see any opposition. And it’s the same thing with the aerospace commission bill. It looks like it’s supported in every committee.”
