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Monday, Aug 15, 2022
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Taking Flight

Business groups in the South Bay have launched the South Bay Aerospace Industry Alliance to support the local aerospace sector and bolster efforts to prevent the closure of Los Angeles Air Force Base.

The South Bay Association of Chambers of Commerce, comprising 18 business groups representing communities from Los Angeles International Airport to Long Beach, formed the alliance this month, in large part as a response to repeated threats to close the base.

The El Segundo office complex that houses the base sits in a cluster of defense contractors and is considered an integral component of the region’s aerospace industry, which remains a key employment sector even after decades of steady decline.

About 6,300 administrators and engineers work at the base, overseeing billions of dollars in defense contracts to local aerospace firms as well as managing satellite and other space systems. The facility has been put forward as a target for closure or consolidation with other bases several times over the past 25 years, and the Trump administration’s most recent Defense Department budget proposal would cut $2 billion over 10 years through unspecified base closures.

The local effort aims to be ready in any case.

“When there are efforts in Washington, D.C., that threaten the LAAFB’s presence in El Segundo, the alliance will most definitely do all it can with its broad group of community partners to help keep the base here,” said Michael Jackson, a transportation project management consultant and former local aerospace executive who chairs the new organization.

Jackson said the alliance’s 11-member executive committee will meet monthly at the offices of the Redondo Beach Chamber of Commerce. The alliance will ensure the latest research on the base’s economic and industry impact is available and will rally local leaders to pressure federal officials and members of Congress to maintain the facility, he said.

The alliance also plans to address other issues, such as federal defense funding for fighter jets or potential relocation of aerospace company operations outside of the region.

This new venture is not the only group focusing on the local aerospace industry. The Los Angeles County Economic Development Corp. several years ago set up the Southern California Aerospace Council to promote and advocate for the industry. The council, through its partnership with the LAEDC, produces statistical research on the local sector and markets the region’s advantages on a national and international scale.

“We’re focused on branding and networking locally, nationally and internationally the assets for aerospace industry we have here in Southern California,” said Judy Kruger, industry cluster director for the LAEDC. “But we really haven’t had a permanent organization to target the (base closure) process and make sure the jobs at Los Angeles Air Force Base and the thousands more jobs that depend on the base are protected.”

Jobs magnet

A recent study by the Air Force said the base contributed $1.8 billion to the local economy in 2015 through 6,300 direct and 12,000 indirect payroll jobs, mostly at local defense contractors.

The base is nestled among companies including Aerospace Corp.; Boeing Co. of Chicago; Lockheed Martin Corp. of Bethesda, Md.; Northrop Grumman Corp. of Falls Church, Va.; Raytheon Co. of Waltham, Mass.; and, not far away in Hawthorne, Space Exploration Technologies Corp., or SpaceX.

All of these companies except Aerospace Corp. are among the top-ranked manufacturers in Los Angeles County, with a total of 42,000 employees in the area, according to the Business Journal’s recent list of largest manufacturers.

Aerospace Corp. is a nonprofit that operates the federally funded research and development center at the base and employs about 3,600 workers, including about 2,500 in the county, according to Business Journal data.

Overall, direct aerospace payroll employment has plummeted since the heyday of the Cold War. In 1990, the county had 189,000 jobs in the industry. By 2000, that number had fallen to 83,000, and to 61,000 by 2010, according to state Employment Development Department data provided by the LAEDC.

Since 2010, the rate of decline has slowed; as of June, the county had about 51,000 direct aerospace payroll jobs. While traditional defense and commercial airplane contracts have continued to drop, that decline has been offset by a rise in the manufacturing of commercial space vehicles and related components, according to a 2016 LAEDC report on the industry.

The most high profile of those manufacturers is SpaceX, which the Business Journal estimated has 4,000 employees in the county.

Repeated target

The L.A. base has been eyed for closure several times. The most serious threat came in 2003, when it was placed on the Base Realignment and Closure list to be consolidated with military facilities in Colorado. It was taken off the list at the last moment.

Base closings remain a threat nevertheless.

The Department of Defense since 2009 has said it has a significant amount of excess capacity that warrants at least one more round of base closures and consolidations.

The department as recently as last year said the various branches of the military services had a combined excess capacity of 22 percent; the Air Force excess capacity was 32 percent and Space Operations’ excess capacity was 54 percent.

Rep. Adam Smith, D-Wash., last year introduced a bill to move forward with another round of base closings and consolidations but withdrew that measure earlier this year amid intense pressure from other lawmakers concerned about the impact on jobs. The bill is expected to be reintroduced in some form in the next year or two.

The alliance’s Jackson said that rather than having to scramble to pull together government, civic and business leaders every time the base emerges as a closure or consolidation target, the decision was made to form a permanent group to monitor the situation and act earlier in the process to preempt the placement of the base on the closure/realignment list.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.
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