Still climbing: Aerospace employment grows

Published: Wednesday, June 15, 2016 Source: The Journal Record

OKLAHOMA CITY – Employment in Oklahoma’s aerospace and defense industries is rising, according to state data. Long-term demand from government and commercial clients will grow over the next decade, said Acorn Growth Cos. CEO and Managing Partner Rick Nagel.

 The state must improve its education system so that aerospace and defense businesses can recruit and retain the best workers, said Philip Busey Jr., senior vice president and spokesman at Delaware Resource Group.

There were about 7,100 people working in aerospace products and parts manufacturing businesses in April, according to Oklahoma Employment Securities Commission data. That number stayed the same from the previous month, but rose by 300 workers from April 2015.

Air transportation, which includes airlines and charter planes, employed 5,800 people in April 2016, about 100 more than the previous month. However, 5,900 Oklahomans worked in air transportation in April 2015.

Nagel’s private equity fund manages several companies that build parts for airlines and maintain airplanes, including Valair Aviation and Commuter Air Technology Inc. Valair provides fuel and mechanical services for small planes and also builds equipment used in defense surveillance.

“There’s an insatiable demand for that: border protection, maritime patrol and protection, anti-piracy and tracking the movement of known combatants in war theater,” he said.

He bought Commuter Air Technology in 2006 and moved the company from Arizona to Oklahoma. Fewer than 10 people worked there at the time; it now employs about 150 workers and contractors.

The business’s revenue has grown 20 percent annually for the last five years. Nagel said revenue could grow by 25 percent in 2016. The increase is directly attributable to federal government spending and contracts, he said.

Nagel bought Aerospheres, a British-based hazardous materials distribution company, in 2015. Sales have increased by 15 percent since then.

Busey said his company has hired two employees recently that were laid off from the oil and gas industry. Those managers had enough experience working in a highly regulated and demanding sector that it was easy to train them, he said.

Busey said revenue increased in the millions of dollars compared to the previous year. He declined to provide precise figures.

Delaware Resource Group also provides staffing services for aerospace companies locally and nationwide. Demand for qualified workers shows the sector is strong and growing, he said.

But it can be a challenge to find engineers who want to move to Oklahoma, he said. The state is near the lowest nationwide for funding secondary education. He said some potential workers who left the military and looked for civilian defense jobs told his staff they didn’t want to put their children in Sooner State schools.

“It’s becoming a growing concern because we don’t want general education issues to stagnate the growth or hurt businesses,” Busey said.

Busey said the state’s career technical schools do a great job of finding, training and placing airplane mechanics. But he said found there aren’t enough aerospace engineers graduating from Oklahoma universities.

Oklahoma City University Economics Chairman Jonathan Willner said the state has a well-deserved bad reputation for cutting education spending. State leaders persistently cut funding for schools and don’t keep up with the inflation rate, he said.

Another way to recruit engineers to Oklahoma is to pay them more than they would earn in places such as Seattle.

“It goes against business principles, and it will show up in a slightly lower return on investment or fewer corporate perks,” Willner said. “That also will provide a signal to students as to what they should study.”

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