Delta’s massive maintenance operation at Hartsfield-Jackson International Airport helps local aerospace suppliers make inroads overseas, contributing to Georgia’s nearly $8 billion in annual exports of planes and parts, the director of the Georgia Center of Innovation for Aerospace told Global Atlanta.
Georgia ranks No. 3 in the nation for employment in the maintenance, repair and overhaul (MRO) industry, the business of servicing and fixing planes, according to the Georgia Department of Economic Development.
Where there is an airport, there is a built-in need for MRO activity. With its base at the world’s busiest airport in Atlanta, Delta Air Lines has become a behemoth in the industry, selling maintenance services to partners in Brazil, Mexico, Korea and beyond. Delta TechOps reportedly brought in about $600 million in 2012 and has voiced ambitions of reaching $1 billion in contract work.
All that trickles down to smaller companies, said Steve Justice at the Center for Innovation, who has worked for Gulfstream, Delta and Lockheed Martin.
“When you get that much work being done in Atlanta on literally almost thousands of aircraft, you’re going to have a multitude of U.S. and international companies that locate nearby to provide all the parts, all the components, all the services that need to be done there,” he said. “When you have Delta as one of your customers, that is a good selling point in reaching out to other international customers.”
Georgia is known for selling pecans, poultry, peanuts and pine trees around the world, but planes and their parts are the ones really bringing home the cash for the state.
While filling up more shipping containers, agricultural products (excluding pulp and paper) accounted for less than 10 percent of the value of the state’s record $37.6 billion in exports last year.
“Transportation equipment”, mostly made up of aircraft and their components, brought in nearly $10 billion – or about 25 percent. That underscores how the state has quietly taken off as an international aerospace powerhouse, with products being sent to nearly every country.
“There are very few places where something that was made and developed in Georgia is not (sold),” said Mr. Justice.
He cited fuel bladders for Boeing and Airbus made by Meggitt Technologies in Rockmart, spacecraft products made by EMS Technologies in Norcross and Triumph Aerostructures in Milledgeville, whose parts are shipped all over the world. There’s also Pratt & Whitney, which makes engine components at a huge plant in Columbus, Ga., and Albany-based Thrush Aircraft, which has sold crop dusters in 80 countries.
The innovation center is dedicated to making Georgia companies more competitive. While that often means connecting them with the latest research and the best-trained workers, it also means requires helping them spread their wings abroad through global trade shows and partnerships with the Georgia Department of Economic Development.
“Our companies have done a very, very good job of recognizing that aerospace is truly a global industry,” Mr. Justice told Global Atlanta.
Gulfstream’s International Flight
For some of Georgia’s bigger players, sky-high exports have meant billions of dollars in sales and thousands of jobs created.
Gulfstream Aerospace Corp. was likely a big reason the state’s aerospace exports to the United Kingdom more than tripled to $639 million and to the United Arab Emirates jumped more than 400 percent to $191.3 million, according to the U.S. Commerce Department.
While Gulfstream doesn’t break out its sales into specific markets at home or abroad, it sold 144 business jets in 2013 – 50 more than the previous year – and its $14 billion order backlog extends to 2017, with half of those buyers hailing from overseas, according to Steve Cass, vice president for communications.
Last year saw the introduction of Gulfstream’s newest and most expensive model, the G650, along with a new mid-size model, the G280. Prices on its jet lineup range from $15 million to $64.5 million, meaning even a few foreign sales could bump up Georgia’s export figures dramatically.
Gulfstream commands nearly 50 percent of the market in the Middle East, and many customers there service their Georgia-made jets at the company’s service closest center at Luton Airport outside of London. Many wealthy Russians also spend time in London, which Mr. Cass said could have aided Gulfstream sales there. China, where Georgia’s exports of planes and parts were worth $800 million, is also a growing market for Gulfstream.
These sales support jobs back home in Savannah, where Gulfstream has hired more than 2,500 new workers in the last three years through a massive expansion of its main factory. It also announced plans recently to spend $100 million beefing up its maintenance center in Brunswick.
The company, a subsidiary of General Dynamics, set up in Georgia in the 1960s and is here for the long haul, Mr. Cass said.
“I think we have a recipe for success, so we have no plans to try to mess that up,” he said.
Lockheed’s India Deals
While smaller overall, Georgia’s exports of transportation equipment to India – nearly all of which are aerospace-related – more than tripled to $79 million in 2013. That represented a recovery to 2010 levels, when Lockheed Martin C130Js were starting to be delivered to the country.
Six of the Marietta-made transport planes were ordered in 2007 and delivered through 2011. After a lull in deliveries during the past two years, more are on the way: The Indian government in December exercised an option to purchase an additional six of the Super Hercules C130s for about $1 billion. Lockheed also provides parts and service for the planes, and those sales likely crept into the export numbers, said Abhay Paranjape, a Lockheed director who handles its dealings with India.
Mr. Paranjape noted that the main value of this most recent order is that it provides stability for a factory that has laid off and moved hundreds of workers over the past few years. Having six planes in the pipeline is key for a factory that makes 24 per year.
“Every time we get an order of that magnitude, it increases our security because our backlog builds and we can do more significant planning for the future,” he said, adding that the company has begun airframe components for the C130J near Hyderabad, India, through a joint venture with Tata Advanced Systems.
Ongoing Momentum
The momentum in exports during 2013 matched what Mr. Justice was hearing on the ground.
“We knew companies were very busy with orders and had a lot going on; the numbers just reflect what we were hearing on an individual basis,” he said, adding that 2014 should also be a good year. “We see no flattening of this.”
In February, parts suppliers Aventure Aviation and Custom Cable Assemblies were among 53 firms honored by Gov. Nathan Deal with GLOBE Awards for entering new markets during the previous year.
Aside from making introductions between companies, the Center of Innovation connects companies with research and resources including the Middle Georgia State College’s School of Aviation, which has 500 students from 16 countries are learning to fly planes, run airlines and manage airports.
The center has also worked with Paulding County to create a new aerospace cluster, the Paulding Aerospace Alliance.
More than 500 aerospace companies are located in Georgia, providing 86,000 jobs with $8.6 billion in payroll. The economic impact of the sector was estimated at $50.9 billion. Georgia hopes to gain even more suppliers when Airbus opens its $600 million plant in Mobile, Ala.
The state sent a representative to the Dubai Air Show in November, where a variety of Georgia companies were represented. Read more: Georgia Exporters Take Flight at Dubai Airshow
Click here for more about Georgia’s aerospace industry as a proportion of total exports.
Note: This is an adapted version of a report that first appeared on Global Atlanta.