Governor: Arkansas ‘in the middle of the action’ for aerospace and defense industry growth

Arkansas is the right place for the aerospace and defense industry, Gov. Asa Hutchinson told attendees of the 2021 Mid America Aerospace and Defense Summit in Fort Smith on Wednesday (June 9). The reasons why are many and the focus on keeping and growing it is strong, he said.

“There is pride in every Arkansan for this industry,” Hutchinson said. “We have a certain affinity for (the industry). Our patriotic spirit comes out — red, white and blue — and says, ‘We value the aerospace and defense industry here in Arkansas.’”

The aerospace and defense industry continues to be a driving force for the economy of Arkansas, said Arkansas Secretary of Commerce Mike Preston.

“This is a key driver for any state that really digs in and says aerospace-defense is going to be a leader in our state. We have been able to do that in Arkansas. It is the No. 1 export that we have, accounting for a nearly $800 million impact in exports, 10,000 plus jobs and $2 billion plus total economic impact in our state,” he said.

Arkansas is home to 180 aviation and aerospace companies, which represent and touch about every corner of the state. The summit in Fort Smith was provided by the Arkansas Aerospace and Defense Alliance.

“As a state, there is not a community that is not impacted by the aerospace-defense industry,” said Preston, adding that the sector has been a major target for marketing businesses to Arkansas.

The governor used the announcement of the new F-35 and F-16 military mission at Ebbing Air National Guard Base in Fort Smith as an example of how committed the state is to attracting and keeping aerospace and defense industry companies and projects. Hutchinson announced Tuesday (June 8) that Arkansas will put up $17 million to extend the runway at the base by 1,300 additional feet. The city of Fort Smith has committed $5 million to the runway extension. The extension was needed to “seal the deal” for the project, Hutchinson said.

“What we did in that project is not any different than what we will do in supporting (other projects) because we want to see success. We want to see (this industry) be able to expand,” Hutchinson said.

Arkansas’ workforce also sets it apart from the competition when it comes to attracting the industry, both Hutchinson and Preston said.

“The workforce is skilled in manufacturing historically. We rank sixth in the nation in the percentage of our workforce that has a background in manufacturing. That’s a background many states are envious of, and that skilled workforce is right for the aerospace and defense industry,” Hutchinson said.

Preston said that doesn’t mean communities can relax because the competition for workers is intense.

“Everyone out there, this industry included, is in a competition for workers. Coming out of this pandemic, we’ve seen a lot of dynamics shift and change,” Preston said. “It has shifted our labor pull. We saw the labor pool shrink over the course of this pandemic. What’s going to make a difference with these jobs in the aerospace-defense industry is that they pay a much higher rate than other industries around them. I think that is going to entice people back into the workforce.”

The key to growing the industry in the state is continuing to look at the future of the workforce through the education system. Hutchinson said computer science education expansion in the high schools is one key component.

Preston said a clear delivery system between education — universities, colleges, technical schools, vocational schools and high schools — and industry is key. He noted that what Fort Smith industry has accomplished with Fort Smith Public Schools and the University of Arkansas at Fort Smith through the Peak Innovation Center, a regional career and technology center, is a shining example of what can and needs to be done throughout the state.

“That is what is going to set us apart in the future going forward,” Preston said. “If we can replicate what is happening here in Fort Smith across the state, I think we’re going to do well.”

Geographically, Arkansas is right for the industry, Hutchinson said, noting it is located “right in the middle of the action.”

The state’s commitment to investing in infrastructure is also a draw. Hutchinson said he hopes there will be an infrastructure package coming out of Washington that will be the right size and focus on the right areas, but regardless the people of Arkansas recognized the need for investing in infrastructure by passing the largest investment of infrastructure in state history when it passed Issue One in 2020, the permanent half-cent sales tax for roads.

“Our citizens realize getting our product to market is important to our farmers, but it is also important to attract and grow industry,” Hutchinson said.

Creating a pro-growth business environment has also helped the state, Preston said, noting the state’s balanced budget and growing surplus are attractive to recruiting companies.

“That gives us the tools to go in and sell to industry that Arkansas is a viable, safe place for their investment. They can come here and realize we are going to continue to balance our budget. We are not going to have to turn around and raise taxes on individuals and businesses,” Preston said. “We are positioned very well for the future.”

The state currently has a budget surplus of nearly $1 billion, Hutchinson said, which will keep taxes lower. Also, military retirees pay no state income tax.

Col. David Allen, 189th Airlift Wing commander, said military retirees and members of the Air National Guard can be key components to filling workforce needs of the aerospace and defense industry.

“Workforce is an issue in every industry, members of the 188th and 189th are an answer to the workforce issues of the future,” Allen said. “We are constantly seeking ways to share talent, for ideas to help both our needs.”