THE IMPORTANCE OF ARKANSAS’ AEROSPACE-AND-DEFENSE SECTOR

By Rudy Ortiz

While Arkansas is blessed with several key industry sectors, such as corporate and shared services; distribution and logistics; firearms and ammunition; food and beverage; metals; technology; timber and forest products; and transportation equipment, it is aerospace and defense with the highest octane “fuel” for Arkansas’ economic engine.

Here are a few stats to support that claim:

• Almost 180 companies in the aerospace-and-defense sector are located in Arkansas. Well-known companies, such as Dassault Falcon Jet, Lockheed Martin, Aerojet Rocketdyne, General Dynamics, SGL Carbon, Radius Aerospace, CoorsTek, Raytheon and American Rheinmetall Munitions, are among the larger companies with operations in Arkansas.

• The aerospace industry in Arkansas generates $1.8 billion in economic activity, with commercial airports injecting another $2 billion and general aviation injecting an additional $500 million annually.

• There are approximately 8,276 employees directly and indirectly involved in aerospace and defense manufacturing, with 4,050 directly engaged in manufacturing aerospace products and parts.

• The aerospace-and-defense sector is Arkansas’ largest exporter. Each year, this sector exports more than $1 billion of aerospace and defense goods, which accounts for 19.7 percent of Arkansas’ total exports. That figure is expected to grow even higher with the F35 jet training contract recently announced from Fort Smith.

• Other aerospace-related areas are drone development and the import/export/distribution of aircraft. The aerospace-and-defense sector also provides additional important economic benefits to the state that might not be obvious. Some of these are:

• Diversity of job creation: As indicated earlier, the aerospace-and-defense industry employs thousands of people in Arkansas, including highly skilled engineers, researchers, technicians, mechanics, machinists and precision-production manufacturing workers. These jobs often pay well and provide benefits, contributing to the state’s overall economic growth.

• Revenue generation: The industry generates significant revenue for the state through the sale of aerospace- and-defense products, services and technologies. This revenue can then be used to fund other important programs for the state.

• Innovation: The aerospace-and-defense industry is a hub for innovation and research, which can lead to new technologies and products that can benefit other industries as well. Arkansas has several universities and research institutions that work closely with the aerospace-and-defense industry, which can create new business opportunities and partnerships.

• Economic diversification: The aerospace-and-defense industry can help diversify Arkansas’s economy, reducing dependence on other industries that may be more vulnerable to economic fluctuations. This can help stabilize the state’s overall econowmic outlook and provide more long-term stability.

William Burgess is an Arkansas District Export Council (ArDEC) member and co-CEO of Power Technology Inc., a laser technology company in Alexander. He said, “There are many employers in the state of Arkansas who don’t directly manufacture planes and bombs but are still part of the aerospace-anddefense industry. Power Technology Inc. manufactures lasers that are used to test laser-guided munitions, including bombs and missiles. PTI also manufactures laser tools that ensure that airframes are perfectly aligned on the manufacturing floor.”

Mr. Burgess noted that many businesses in Arkansas support the industry in other ways.

“There are repair station operators or maintenance, repair and overhaul (MRO) facilities in the state whose prime business is to refurbish and maintain aircraft,” he said. “Some of these aircraft happen to be from foreign countries. This would count as an export.”

In summary, the aerospace-and-defense industry is an important sector for Arkansas, providing jobs, revenue, innovation and economic diversification to the state and its citizens.

Rudy Ortiz, senior management consultant for Strategic Business Services, is chairman of the Arkansas District Export Council Education Committee.