Dean Barber

Taking Aerospace to the Next Level: Watch Oklahoma City

In Corporate Site Selection and Economic Development on November 5, 2017 at 7:18 pm

As a consultant to economic development organizations and industry, I have been to many communities, big and small, that have great potential. Or as I used to say when I lived in Alabama, “PO-tential.”

That is, these are places that have the capacity, the power to develop into something bigger and better. More often than not, they reveal glimpses of this power or I would not have recognized it in the first place.

After all, I’m just a consultant who asks a lot of questions. I’m no seer, although I have met a few consultants who consider themselves as such. What I can do is recognize the assets of a community, knowing full well that it takes planning and concerted action to leverage assets and thereby live up to the potential.

For that to happen, there has to be a foundation for success, as well as leadership with vision and buy-in from the community. And it requires a degree of courage and risk taking.

I recently spent time in Oklahoma City, a place that is very much acting upon its potential and in the process transforming itself. I was there at the bequest of the Greater Oklahoma City Chamber to speak to economic developers from the surrounding 10-county region on “the future of work.”

It’s subject that I have frequently tackled in past blogs. (See: The Future of Everything: Four different scenarios for the future of work; A Calm, Stable, Predictable World of Work is Not Happening: Digital technologies will affect us all, and it will get messy;  The Next Big Blue Collar Job: You don’t have to go to a four-year college to learn coding; The Jobs Will Change and So Will We: Artificial intelligence will change how we work.)

While I have only scratched the surface on the future of work, for purposes of this blog, I want to tell you about Oklahoma City, because I think a lot of communities could learn from it.

More Than Energy

When you think of Oklahoma City, or Oklahoma for that matter, you would rightly think of oil and gas. Apparently, there is a working oil well on the grounds of the state capitol. More importantly, the city is a mecca for corporate headquarters for the energy industry.

Devon Energy Corp.; Chesapeake Energy Corp., Continental Resources, Inc.; Chaparral Energy, LLC; Sandridge Energy, Inc.; Gulfport Energy Corp.; Blueknight Energy Partners; Kimray Inc.; and Balon Corp. are all based in OKC and represent historic wealth in the community.

But energy, while important, is not what caught my attention. Two big things stood out to me – the deliberate intention to grow the aerospace industry, the state’s second largest industry generating an annual economic impact of about $43.8 billion, and the continued investment in and transformation of the downtown.

The potential for greater things to happen in both areas is likely because of a concerted effort and action through public and private partnerships. The result will be, actually already has been, economic growth.

A Big Ecosystem

The effort to grow aerospace is already well underway. According to a 2016 report by RegionTrack, an Oklahoma City-based economic research firm specializing in regional economic forecasting and analysis, the aerospace industry in the OKC region is comprised of about 236 public and private sector employers.

They include some blue-chip names in the industry — Boeing, Pratt & Whitney, Lockheed Martin, Northrop Grumman, General Electric Aviation and AAR Aircraft Services.

As a whole, aerospace employers in the OKC region produce an estimated $4.9 billion in goods and services and employ more than 36,600 workers earning $2.7 billion in annual income.

Much of that ecosystem revolves around Tinker Air Force Base, which dates back to World War II when Tinker’s industrial plant repaired B-24 and B-17 bombers and fitted B-29s for combat. Today, Tinker is the headquarters of the Air Force Materiel Command’s Oklahoma City Air Logistics Center, the worldwide manager for a wide range of aircraft, engines, missiles, software and avionics and accessories components.

It’s safe to say that most of the aforementioned companies would not be in the region were it not for Tinker. As such, the base serves as the linchpin, the mothership to these defense contractors, of which Boeing is the largest with 2,600 workers.

In total, Tinker employs about 24,000 workers, of which about 18,000 are civilian. The base generated about $2.2 billion in goods and services while earning about $1.5 billion in wages in 2015.

Within the Air Logistics Center, there are 9,400 military and civilian personnel. They work in 63 buildings covering 8.2 million square feet of industrial floor space, most of which is devoted to maintaining, repairing and overhauling (MRO) military aircraft, including the C/KC-135, B-1B, B-52 and E-3, among others.

Building 9001

One of those buildings stands out as a goliath. A former General Motors plant, it was shut down in 2006. Incredibly, the voters gave Oklahoma County permission to buy the 2.6 million square building for $55 million. It was then promptly gifted to the Air Force for $1 a year.

Today, Building 9001 as it is now called is 75 percent occupied and it’s where a lot of manufacturing of military aircraft replacement parts takes place. Also, a large section is devoted to software engineering.

Shooting For Tier One

With all the jobs, with all the investment, you might think that local economic developers are happy with the state of aerospace in the community. Well, not quite.

Don’t get me wrong, they count their lucky stars that they have Tinker. They fully recognize that Tinker has largely defined the size and scope of aerospace in the local economy. They just want more, but with a twist.

A retired Air Force colonel, Tim Dickinson, now senior business development manager at the Chamber, describes Oklahoma City and the region as a “tier two” community when it comes to aerospace. The goal is to make it a “tier one” community by expanding into commercial work and research and development.

“Let’s create diversity. Let’s grow the commercial side, because the military side is very stable, very solid. Let’s add to our maintenance capabilities by doing commercial manufacturing and let’s go further up the life cycle into R&D,” Dickinson said. “Because if we can get the intellectual capital here, then we really do have something, not just in job stability, but in talent retention.”

Not Great Leaps

What Dickinson is describing is a pivot of sorts, not away from MRO work and Tinker, but ancillary manufacturing that would complement and build upon it. Engine manufacturing in particular would make sense, he said.

“It’s part of the fabric of who we are and what we do. And that would be a great segue from the military to the commercial side, away from MRO and toward manufacturing. Those are not great leaps,” Dickinson said.

“We’re already remaking structural parts for airplanes. Could we not make new structural parts for new airplanes? There are logical steps from where we are now and becoming that tier one community a decade from now.”

Jeff Seymour, director of business development at the Chamber, agrees with Dickinson that expanding into the commercial side is key to building the aerospace industry locally and reaching tier one status.

“A lot of that investment to date has been made to help Tinker directly. I think our challenge is to try to cast a vision in which we say that if we expand the investment out a little bit, it will still be good for Tinker, but also good for diversity and industry in the long term.”

In short, Seymour and Dickinson’s goal is to take aerospace to the next level in the OKC region by going after commercial work.

Talent Pipeline

Both the University of Oklahoma in Norman and Oklahoma State University in Stillwater offer undergraduate and graduate degrees in aerospace engineering. OU is stronger is software applications, whereas OSU concentrates more on airframe.

Both universities have been quite active in research pertaining to unmanned aerial vehicles, the use of which will undoubtedly grow, which will require more manufacturing.

The two universities, plus the fact that military personnel with advanced technical skills can retire in their 40s, provide for an engineering pipeline of talent that would be required if the OKC region is able to go to that next level.

But will it happen? Can the emphasis on the commercial side be realized with manufacturing? I believe so. The potential to become a Tier One aerospace community is there, because the foundation is in place from which to build upon, as is the vision and the will to take it to the next level.

A public/private partnership to create an jet engine test facility, in which companies and the military buy time to use, might be the spark to make bigger things happen. Stay tuned.

In my next blog, I will tell you how the Oklahoma City has exhibited vision and will to build upon the foundation of its downtown and its neighboring environs. It’s quite a story.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. (Send us your RFPs.) Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com or at 972-890-3733.

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