May 30, 2014 by John Guenther
Optimistic reaction to aerospace manufacturing win for Southern California
Machinist at metal fabricator company that supplies aerospace companies. (Photo Credit: John Guenther)
It's not every week you find those whose job it is to create more jobs almost all agreeing on the latest economic news. But when a Southern California consortium landed a federal award as a new "manufacturing community" this week, the prevailing opinion in economic development circles was, not only was it a big win for the region, but just the fact that government and industry are making a substantial go at supporting manufacturing felt like an important shift.
In a U.S. Commerce Department effort to give a boost to manufacturing, the designation was one of 12 made around the country. The Southern California group, focusing on the aerospace industry from Los Angeles to San Diego, proposed strategies such as creating a stronger pipeline for manufacturing workers at 2- and 4-year schools in the region.
"California is the target for all other states trying to attract aerospace companies," said said Ivan Rosenberg, executive director of the Aerospace and Defense Forum, a partner organization in the winning Southern California group. "And I think this has the potential to make California either continue to be an attractive place for aerospace companies or help existing ones grow. It could be the start of something really big that can help California regain some of that shine that once had."
The winning partnership, lead by the University of Southern California Center for Economic Development, is called AMP SoCal and is made of 86 organizations including schools, labs, public-private groups and economic development organizations (full list and more details).
No monies have been awarded yet, but these "communities" will have consultant support from 11 federal agencies and eventual access to a $1.3 billion fund for assistance in their goals. The California group seeks to, among other ideas, use the funds to create websites that provide one-stop help for manufacturers with supply chain issues, buying equipment and hiring.
The value of the collaboration to the Southern California regional economy is pretty clear given the history of a strong aerospace presence, but also given recent high-profile losses like the coming end of Boeing C-17 manufacturing in Long Beach. While story for the past 20 years has usually been about the industry's rapid decline in the state, California's aerospace companies still represent about 9 percent of the global market share, according to a recent report by the consultancy A.T. Kearney.
There's also value to statewide economy, and manufacturing in general, in this designation, if the partnership successfully brainstorms some new economic tools that create a model for government and industry interaction. Rosenberg said one of the biggest complaints in the industry is that there hasn't been as much government support for or engagement with aerospace and defense companies as compared to other states like South Carolina, Florida and Texas, which are actively vying for the sector's jobs.
"I think the biggest thing to come out of this collaboration, with those cities and organizations all in it, is how government and industry can work as partners so that there's an "and" rather than an "or," meaning you can take care of environment and the rules that government has to take care of and make sure these business can thrive here," said Rosenberg.
Out of 70 groups that applied nationally, only 12 were chosen after a panel reviewed the submitted plans and evaluated them on the potential impact in their regions and the depths of the public-private partnerships being fielded.
Unfortunately, three other California-based partnerships were not selected for the designation. This at least highlights the awareness of and need for these types of stem-to-stern, regional collaborations to support industries like manufacturing. And that's because supporting manufacturing seems something of a no-brainer for bolstering the middle class as those jobs can make an average of 39 percent more (PDF) than the overall California average wage.
There's a lot more the state collectively can do to support sectors that are regional strengths like manufacturing, but encouraging these public-private partnerships between industry and institutions is a big goal this year for the California Economic Summit's Advancing Manufacturing team. In April, the Summit co-chairs and Manufacturing team lead submitted a letter to Matt Erskine, acting U.S. Secretary of Commerce for Economic Development, expressing support for California regions' applications.
From his perspective, Rosenberg thinks the biggest value of the Amp SoCal strategy is the fact that the collaboration simply exists and the sense is that the local effort would have continued, award or no award.
"When was the last time that all the cities from Los Angeles to San Diego, all the universities and economic development councils, and quasi-government groups and educational institutions, down to the high school level, sat down together?" said Rosenberg. "It's also exciting to think about what's possible to come out of the collaboration that we haven't even thought of yet."
Update - Tuesday June 3
Chris Harrington, vice president of strategy and business development at Toshiba America Information Systems—and one of the leaders of the Summit’s Advancing Manufacturing Action Team reacts to the news:
"The U.S. Secretary of Commerce designation of Southern California as a Manufacturing Community not only opens the door for grants and support from 11 federal agencies, but makes a clear statement that California offers many benefits to manufacturers. The inter-agency panel which selected Southern California as one of the 12 manufacturing Communities (out of 70 applicants) looked at a wide range of factors, from current and future health of the workforce, to strength of public-private partnerships, community value-integration and regional strategic vision. In this type of broad and comprehensive evaluation, California can be highly competitive in manufacturing.
The Advancing Manufacturing Action Team within the California Economic Summit has this broad perspective, and has supporting the Investing in Manufacturing Communities Partnership (IMCP) program as one of its priorities. The University of Southern California Center for Economic Development team that led the Southern California application to success has provided a specific regional model based on the Aerospace and Defense industry sector, but its underlying approach and analysis can be replicated in other California regions focused on other manufacturing sectors. In particular, we need to be sure to consider the needs and contributions of small manufacturers."