A nationwide demand for passenger airplanes could thrust Utah near the top of the aerospace industry within a few years, officials say. But first the state has to overcome economic and recruiting hurdles that threaten to keep companies away from Utah.
Anxious to take advantage of an opportunity to strengthen the economy, state officials are forming a committee composed of local business leaders, including aerospace executives, to study the problem. Utah Power & Light Co. has loaned the state one of its top executives, Val Finlayson, for a year to lead the committee."What we've been told, and what the market shows with the growth of the commercial aircraft industry, is there are many companies making decisions right now," said Lynn Blake, director of the state's Center For Excellence, which promotes cooperation between government, business and education to develop and attract new businesses.
"There are some unique opportunities for growth right now."
Because many common passenger planes are rapidly becoming old and unsafe, manufacturers say they are building new ones as quickly as possible.
"We are on the verge of a big boom in aerospace. There will be a large expansion beyond what is on the West Coast," said Dick Thomas, general manager of Salt Lake City's McDonnell Douglas Corp. plant, which manufactures floor sections for passenger planes. "Aircraft are aging. World flight patterns are expanding. We're building aircraft as fast as we can. The consumption curves are huge."
Utah's low real estate prices and industrious work force make it attractive to companies expanding to meet the demand for new airplane parts, state officials said. The state already has a strong base of aerospace industries, including McDonnell Douglas, SPS Technologies, Western Gear, Hill Air Force Base, Morton Thiokol and Hercules.
But Utah may have difficulty attracting more aerospace firms because it lacks smaller companies to support the industry - companies that apply high-tech finishing touches to parts, plating them and treating them to resist heat, among other things. Firms in Utah must send parts to other states for those services.
"There is a need for anodizing operations here," Thomas said, referring to a chemical process whereby a protective film is put on metals. "None of that is available here."
However, support companies are reluctant to come to Utah because the state has too few aerospace firms to serve.
State officials are trying to encourage local entrepreneurs to start some of the support businesses, assuring them there are millions of dollars to be earned. Local companies would almost surely be more competitive than out-of-state companies because transportation costs would be eliminated and because labor costs would be cheaper.
As an example, state officials point to a vacant building in North Ogden they say would be perfect for an anodizing company.
But local entrepreneurs face one crucial problem - a lack of money. Firms that specialize in providing venture capital - money loaned to new businesses - are located mainly in other states. Most are reluctant to invest in Utah companies without becoming owners.
State officials also hope successful local industries will expand to handle aerospace needs.
UP&L's Finlayson, who began forming the committee last month, said it plans to study whether new state laws or other attractions would help companies decide to move to Utah.
"We could have an even better aerospace image than Seattle," Finlayson said. "We have the opportunity to have the industry more diversified. There is enthusiasm in the aerospace industry here. They (aerospace companies) have had a good experiences here in Utah."
He said the power company decided to become involved because "economic development is the best marketing the company has."
State officials hope the committee will help by enhancing the state's image as an aerospace center.
"There still isn't a widespread understanding that this is a market growth area in the state. If people did understand this, they would be willing to look more seriously at investments," Blake said.