How aerospace is making a comeback in Southern California
John Schneider is one of the rare people who came into aerospace in its heyday and is still employed.
“When I was first hired here in the 1980s everyone was in aerospace," said Schneider, a site manager for Aerojet Rocketdyne in Canoga Park. Thinking back to his former co-workers from that era, he said "Now everyone’s a graphic designer. This is not the vogue industry anymore.”
Since 1990, the number of people working in aerospace in Southern California has more than been chopped in half. When the Cold War was winding down, there were more than 270,000 local aerospace workers, according to the Los Angeles Economic Development Corporation. In 2014, there were 85,500 in 2014. It’s a big reason why ever since, the region has had some of the weakest job growth in the entire country.
"Southern California really paid the price for the peace dividend that the nation enjoyed," said Christine Cooper, an economist at the LAEDC.
In the last few years though, the region's aerospace industry has been making a comeback by focusing more on technology, though it is still considerably smaller than it once was.
Aerojet was founded by four Caltech colleagues in Southern California in the 1940s, and it has survived the industry's ups and downs. At the company's Canoga Park factory, Schneider explained how the space has changed, going from 300,000 square feet to now 100,000 square feet. He said the company has been simply "right sizing."
You don’t see a lot of people working on the factory floor. Machines do much of the work – like the ones that produce tiny sensors for other high-tech products that the company makes.
“This is a brand new manufacturing cell to make thrust chambers for missile defense systems,” Schneider explained.
But the machines that make those sensors can’t operate completely alone. It takes two highly-skilled technicians to make sure everything keeps running smoothly. After years of cutbacks, Schneider says the factory is now expanding its workforce by almost 10 percent thanks to lucrative new contracts for missile defense and manned spaceflight.
“This year at this site, we’ll add over a 100 new jobs, between manufacturing and engineering jobs,” said Schneider.
Fewer airplane parts, more space vehicles and missile defense
Just like other kinds of U.S. manufacturing, aerospace has become more "capital intensive", according to Cooper.
“Which means higher levels of automation and fewer levels of employees, and the employees are more productive," she said.
In the Los Angeles area, that means companies make far fewer airplane parts. Those can be made more cheaply overseas. The manufacturing of airplane parts has seen a 40 percent loss of jobs since 2004. Instead, the area is seeing growth in the production of guided missiles and space vehicles.
More than 6,000 jobs have been added in those areas since 2004, a 64 percent increase, according to a recent LAEDC study. The pay is good, averaging $105,715 a year, almost twice the median wage in the region.
“We’re retaining the higher level of manufacturing here in this area,” Cooper said. "Although it's small, it's growing quickly."
A lot of demand is being driven by companies that want to get satellites into space to provide services like high-speed internet access and GPS. Someone has to launch those satellites up, and Virgin Galactic wants to be the one.
“We thought there was a real niche for us to come and say, 'If you’re a satellite operator and your value proposition to your customers is that you’re fast and small and cheap then you need a rocket that’s just like you are,' and that’s what we’re seeking to build," said William Pomerantz, vice-president of special projects at Virgin Galactic.
"What has happened in just the past five or ten years is that people have realized that by taking advantage of a lot of the revolution in consumer electronics, you could start to build satellites very cheaply that aren’t quite as capable as the top-of-the-line spy satellites, but that don’t need to be,” said Pomerantz.
Like many of his co-workers, Pomerantz started his career working at NASA. He said he thought he’d always stay in the government, but the industry has changed.
“We really see ourselves as a commercial effort that is primarily targeted at a commercial market,” said Pomerantz.
Virgin Galactic is hiring more than 100 people for its new Long Beach plant. It is a positive boost for the city, but the numbers pale in comparison to aerospace's heyday; The factory is just down the road from where Boeing made C-17 cargo planes until last year. That plant used to employ thousands of people – sometimes tens of thousands.
“The impact that the defense downturn took in the early 90s was unprecedented, and I don’t think we’ll ever recover from that," said Jim Adams, an aerospace consultant at PricewaterhouseCoopers.
However, at least the new kinds of aerospace jobs are starting to make a dent.
"I think we have a huge amount to be excited about here in Southern California," said Pomerantz.