After Dismal 2010, Aerospace Industry Starts to Stabilize

by Robert Bell  on Monday, Apr. 11, 2011 12:00 am  

2010 was a terrible year for the Arkansas aerospace industry. In terms of export dollars, the industry had grown at a rapid clip throughout the last decade. But it took a nosedive last year, with export values tumbling nearly 70 percent from the 2009 record of more than $1.67 billion.

(Click here to see the Largest Aerospace Companies list. A spreadsheet version is available.)

According to estimates from the Arkansas Economic Development Commission, about 10,000 people are currently employed in the aerospace industry in the state, down from a high of about 12,000 in 2007.

Two related factors are to blame for most of the decline, said Robin Pelton, existing business resource sector manager for the Arkansas Aerospace Alliance. The AAA is a division of the AEDC and is made up of aerospace and aviation companies, state and local government agencies and educational institutions.

The first factor, not surprisingly, is the Great Recession. The second cause for aerospace industry pain is related to the recession, although indirectly.

"There was quite a bit of less-than-desirable publicity from the federal level when the [automotive] executives flew to Washington, D.C.," Pelton said. "That really did create a backlash for corporate jet orders."

But it was not all bad news in 2010 for Arkansas aerospace companies. Some of the companies serving the defense industry saw increased revenue last year.

"Actually this was a record year for us as far as business," said Tony Johnson, president of two Triumph Fabrications manufacturing facilities, located in Hot Springs and in Fort Worth, Texas.

"We're pretty heavy into military rotorcraft, and some fixed-wing, but specifically rotorcraft," he said. "There's been high demand to replace existing rotorcraft fleet, because many were so old and getting worn out every day."

Triumph Group, the parent company of Triumph Fabrications and Triumph Airborne Structures, also located in Hot Springs, does not disclose revenue for individual segments of its business. The company hasn't reported full-year revenue for the fiscal year that ended March 31, but in the three quarters that ended Dec. 31 Triumph Group's revenue was nearly $2 billion - fully twice as much as in the same the previous year.

And while aerospace certainly took a major hit in 2010 in Arkansas, Pelton said many of those in the industry are telling her they're expecting significant recovery this year.

She many of the smaller aerospace companies were so busy with orders that they had a hard time breaking away to attend the third annual Governor's Aerospace Workforce Summit last month.



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