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 Fall 2015


Aerospace Industry Takes Off in the American South

By Mike Randle

We all know of the success of the Southern Automotive Corridor. It's the preferred location in the U.S. for foreign automakers. Why? The South is the least expensive place to manufacture a product in the world's largest economy. Not only that, the South is by far the largest -- by population -- of the four U.S. regions. In fact, within a couple of years, the South will have a larger population than the Midwest and Northeast combined if migration patterns remain as they've been the last three years.

As a bonus, the automotive industry's growth in the South has done something for another industry sector; it has paved the way with a successful blueprint for those in the aerospace industry to copy, and that's exactly what is occurring. Aerospace activity in the South has never been greater and it is expected to grow by leaps and bounds in coming years.

The South now has its own "Big 3" in industry sectors that call the region home. Automotive, aerospace and petrochemicals drive this region's economy like no other sectors. In fact, only four Southern states are not led in exports by either automotive, aerospace or petrochemicals and those are Florida (gold, but aerospace is second); Tennessee (medical devices, but automotive is second); Virginia (electronics); and West Virginia (coal, but automotive is second).

Interestingly enough, here is the breakdown on Southern state exports based on value. Auto leads in three states, petrochemicals in three states, but aerospace leads in five. Chart No. 1 shows the leading export product of each Southern state in 2013.

Chart No. 1

State No. 1 Export 2013
Alabama Automotive
Arkansas Aerospace
Florida Gold
Georgia Aerospace
Kentucky Aerospace
Louisiana Petrochemicals
Mississippi Petrochemicals
Missouri Automotive
North Carolina Aerospace
Oklahoma Aerospace
South Carolina Automotive
Tennessee Medical Devices
Texas Petrochemicals
Virginia Electronics
West Virginia Coal

Source: Census Bureau

The automotive industry has been the South's most active manufacturing category, posting more projects meeting or exceeding 200 jobs or $30 million in investment than any other sector every year for the past 21 years. No manufacturing sector has even come close to challenging automotive until the fracking frenzy began five years ago.

While oil and gas and the chemical sectors are moving on up as challengers, automotive still rules the roost. Since widespread fracking began in 2010, the automotive industry has announced 306 projects of 200 jobs or more and/or $30 million or more in investment from January 1, 2010, to July 1, 2014. Oil and gas accounted for 226 and chemical manufacturing posted 172 deals meeting or exceeding those thresholds, making them the second and third most active manufacturing sectors respectively in the South since 2010.

The aerospace industry is no slouch either, as it is the fourth largest industry sector in the South with 144 large projects announced from January 1, 2010, to July 1, 2014. The total trails only automotive, oil and gas and chemicals, and aerospace leads fifth place food and beverage (163) and sixth place general manufacturing (121).

While automotive remains at the top of the manufacturing heap in the region in deal counts every year and petrochemical projects are at all-time highs, the aerospace sector is catching up. Exports of U.S.-made vehicles (including parts) are at record rates and the Southern Auto Corridor's contributions are significant since it is home to more foreign-owned assembly plants (11) than any other U.S. region, while also home to eight domestic plants. 

In 2013, U.S. auto exports (including engines and parts) were valued at $152 billion according to the Foreign Trade Division of the U.S. Department of Commerce. Almost two million U.S.-made vehicles were shipped to other countries in 2013 — a record year. Foreign and domestic plants in the U.S. exported about the same number of vehicles last year.

One problem we have, however, with automotive exports is the trade gap we see in the sector from the import side. While that trade gap is shrinking, it still topped $100 billion in 2013. While many of the U.S. auto exports are shipped to Mexico and Canada, the share of exports to those two North American countries has dropped below 50 percent of total automotive exports for the first time. One reason is the China effect. In 2013, one in nine U.S.-built automobile and light truck exports were shipped to China.

So automotive is absolutely rolling on the export front here in the Southern Automotive Corridor (for more information, go to But that $152 billion in export values from the automotive sector is being challenged by aerospace exports. And increasingly those exports are coming from the new Southern Aerospace Corridor.

In 2013, U.S. aerospace exports (including aircraft, engines, parts and spacecraft) topped $115 billion and in 2012 that figure was $118.5 billion. In terms of value, automotive and aerospace exports rank third and fifth behind No. 1 machinery ($213 billion), No. 2 electronic equipment ($165 billion), and oil and gas ($148 billion) is the fourth largest export.

But the difference between the aerospace industry's export totals and the other aforementioned industry sectors is significant when it comes to trade gaps. The U.S. aerospace industry continues to lead all other industries in net export of manufactured goods. Aerospace exports enjoyed a favorable balance of trade in 2013 of a net plus of $73.5 billion, the highest value of export to import of any U.S. manufacturing sector.

That means when it comes to the aerospace industry, business is being done for the most part on American terms on a global basis. The U.S. is the center of the world's aerospace universe.

Commercial aircraft: Taking a cue from the automotive sector

In an article published by the Pew Charitable Trusts in April titled, "Aerospace Manufacturing Takes Off in Southern States," writer Pamela Prah wrote, "Aerospace companies are taking a cue from the auto industry and moving their manufacturing operations to Southern states. The region's lower costs, generous state incentive packages and right to work laws that make it hard for unions to organize are motivating these companies to choose the South."

Indeed, large aerospace projects -- those meeting or exceeding 200 jobs and/or $30 million in investment -- have risen steadily since the end of the recession. Chart No. 2 shows the number of aerospace projects meeting or exceeding those thresholds announced in the South since the recession ended in 2009.

Chart No. 2

Aerospace Projects Announced in the South 200-Plus Jobs/$30 million investment

Year # of Projects
2009 18
2010 25
2011 23
2012 18
2013 30
2014 52

Source: SB&D

The Boeing Dreamlifter (interior of the plane shown here) is a modified 747 passenger airplane that can haul more cargo by volume than any airplane in the world. It is the primary means of transporting major assemblies of the Boeing 787 Dreamliner from suppliers around the world to the 787 final assembly sites in South Carolina and Washington. This reduces delivery times to as little as one day from as many as 30 days.With 30 large aerospace projects announced in the South in 2013 and a  record 52 announced in 2014 meeting our thresholds, the momentum for aerospace-related job generation post recession has never been higher. Expect that momentum to increase fairly dramatically as demand for commercial aircraft is expected to grow exponentially in the next 20 years.

In a report published by Chicago-based Boeing, the aerospace giant forecasts that long-term demand for new commercial airplanes will top 36,000 aircraft of various sizes valued at $5.2 trillion. Boeing projects that 15,500 of the new planes (42 percent of all new deliveries) will replace older, less efficient planes. The remaining 21,270 airplanes will account for fleet growth, which stimulates expansion in emerging markets.

The report states, "Single-aisle airplanes continue to command the largest share of the market. Approximately 25,680 new single-aisle airplanes will be needed over the next 20 years. Fast-growing low-cost carriers and network carriers pressed to replace aging airplanes drive single-aisle demand. The widebody fleet will need 8,600 new airplanes. The new generation of efficient wide body airplanes is helping airlines open new markets that would not have been economically viable in the past," the report stated.

Chart No. 3

Commercial Jetliners in Service 2013-2033

Size 2013 2033
Large widebody 740 790
Medium widebody 1,580 3,680
Small widebody 2,390 5,570
Single aisle 13,580 29,500
Regional jets 2,620 2,640
Total 20,910 42,180

Source: Boeing

Chart No. 4

Jetliner Demand by Region 2014-2033

Region New Airplanes Value ($B)
Asia Pacific 13,460 $2,020
Europe 7,450 $1,040
North America 7,550 $870
Middle East 2,950 $640
Latin America 2,950 $340
CIS* 1,330 $150
Africa 1,080 $140
Total 36,770 $5,200

*Commonwealth of Independent States.
Source: Boeing

Boeing's projection of almost 37,000 new commercial aircraft to be delivered by 2033 worldwide with a value exceeding $5 trillion is mind-boggling. There is no possible way that Boeing and Airbus, the two major players in the global marketplace, can produce that many jetliners without creating more capacity by opening new assembly facilities. For example, Airbus delivered 4,824 jetliners worldwide in 10 years from 2004 to 2013 for an average of 482 a year. Boeing delivered 4,458 jetliners in that time frame for an average of 445 a year.

To meet the projected demand over the next 20 years, both would have to average 925 deliveries a year, or more than double what they are producing today. That cannot happen without breaking ground on more assembly plants. And officials in the Southern Aerospace Corridor are banking on the region becoming the aerospace capital of the world.

The Airbus A320neo, which went airborne for the first time on September 25, 2014, is clearly recognizable with the The fact that the Southern Aerospace Corridor is the only place in North America where both Airbus and Boeing -- the two commercial aircraft manufacturers that essentially have a duopoly on the large jet airliner market -- have assembly plants, is a major advantage for the South. And even more important is this: until April 2012 when Boeing rolled out its first 787 at its growing facility at the Charleston, S.C. International Airport, large commercial jetliners had never been fully assembled in the South. Airbus' A320neo assembly plant will open next year in Mobile, Ala. So there are only three places in North America where large jetliners are fully assembled, and two of those places are in the Southern Aerospace Corridor. The other, of course, is Boeing's massive facilities in Everett and Renton, Wash.

But there's one big difference between Boeing's two North American jetliner facilities and Airbus' new facility that's prepping for opening in Alabama. The two plants in the South are non-unionized. The ones in Washington State are unionized and Boeing has had a contentious relationship with its union workforce in the Puget Sound.

On September 7, 2008, about 27,000 members of the International Association of Machinists walked off their jobs in a strike over outsourcing, job security, pay and benefits. On November 1, 2008, members of the machinists union agreed to some concessions by Boeing and ended the eight-week strike. It was the longest strike against Boeing by the union since 1995 and the fourth walk off in two decades. But the strike only cost union members on average $7,000 in base pay. The strike cost Boeing, the employer, $100 million per day in revenues and penalties with the postponement of 3,700 jetliners on back order.

Like many large U.S. manufacturers that have endured expensive labor stoppages over the decades, such as Illinois-based Caterpillar, Boeing made the decision in July of 2009 to place its only other full assembly plant in the U.S. at a site adjacent to the Charleston (S.C.) International Airport. South Carolina is a right to work state and the Boeing facility there, which currently assembles only the 787 Dreamliner, is non-union.

The decision to locate in South Carolina prompted a case against Boeing by the National Labor Relations Board, which argued that the Charleston plant decision was in retaliation for the 2008 strike by the machinists. The NLRB dropped its controversial case against Boeing after the company reached a deal with the union to build the new 737 MAX in Washington State. Regardless, Boeing officials are not exactly pleased with the labor environment at its largest facilities in the Puget Sound.

As for Airbus -- Boeing's global rival -- the European aircraft manufacturer made its first move into North America and the U.S. with its plant that is being completed in Mobile, Ala. That facility, as mentioned, will fully assemble the A320neo, Airbus' counter to Boeing's 737 Max single-aisle aircraft. The $600 million facility will house about 1,000 workers and produce four aircraft a month to start off. That production schedule is expected to ramp up quickly if the labor force meets quality issues. 

In 2013, Airbus delivered 626 jetliners while Boeing delivered 648 worldwide. According to reports, though, Boeing's revenue of $38 billion in 2013 was $13 billion more than Airbus' revenue last year. That, despite the fact that Airbus' net aircraft orders last year topped Boeing's by 1,503 to 1,355.

But what seems to be occurring in this global competition is that Boeing is beating Airbus in the larger, widebody aircraft, such as the 787 and the 777, while Airbus is besting Boeing in smaller aircraft, such as the competition between the A320 and the 737 models. Last year, the A320neo, the same plane that will be built in Mobile, outsold the 737 MAX 876 to 699. On the other hand, Boeing delivered 208 widebody jets in 2013 compared to Airbus' 133, giving the U.S. aerospace giant a bigger lead in revenues since widebody aircraft cost substantially more than smaller, single-aisle jets.

The Boeing plant in South Carolina fully assembles just one aircraft and that's the 787 Dreamliner, even though the Charleston plant was designed to run two lines. In the summer of 2014, the South Carolina plant (which is undergoing an expansion that will add facilities and jobs to the roughly 7,500 that work there now) won the right over Boeing's Washington facilities to be the exclusive builder of the 787-10. The 787-10's fuselage is 18 feet longer than the 787-9.

The decision was a blow to Washington State because it means that the South Carolina facility will be able to build all three models of the 787, while the Everett, Wash., facility will only build 787-9s and 787-8s. The decision in the long run probably means that Boeing will operate just one 787 line in the Puget Sound and two in North Charleston. Currently Boeing assembles seven 787s a month in Everett, Wash., and three a month in North Charleston, S.C. But Boeing projects that its South Carolina facility will build seven a month by the end of the decade.

This year, Alabama will join South Carolina and Washington State as the only states in the nation where large passenger aircraft are assembled. "Once that begins, Alabama will be involved in practically every aspect of the aerospace industry, from research and engineering to advanced materials and fabrication and assembly," said Alabama's Commerce Secretary Greg Canfield.

Aerospace exports: A Southern stalwart

Aviation and aerospace products including aircraft, engines and parts manufactured and assembled in the South dot the map throughout the region and are so numerous they can't be given justice here. Many MRO facilities (maintenance, repair and overhaul of aircraft) are also located in every Southern state. In this issue we have state profiles that point out the aerospace industry's strength in each state.

Collectively, the South is home to four of the top 10 states in aerospace job growth from 2007 to 2012, and when Airbus opens its facility this year, Alabama will certainly become the fifth. The strength of the aerospace industry in the Southern Aerospace Corridor can be easily appreciated by looking at the value of aerospace exports in each Southern state. Chart No. 5 breaks down the value of aerospace exports and shows how aerospace exports rank by value compared to other export industries.

Chart No. 5

State 2013 Aero Export Value Ranking in State*
ALABAMA $590,000,000 5th
ARKANSAS $1,862,000,000 1st
FLORIDA $4,769,000,000 2nd
GEORGIA $5,993,000,000 1st
KENTUCKY $5,625,000,000 1st
LOUISIANA $304,000,000 24th
MISSISSIPPI $144,000,000 13th
MISSOURI $439,000,000 3rd
NORTH CAROLINA $1,056,000,000 1st
OKLAHOMA $596,000,000 1st
SOUTH CAROLINA $1,006,000,000 4th
TENNESSEE $1,255,000,000 3rd
TEXAS $4,981,000,000 4th
VIRGINIA $564,000,000 3rd
WEST VIRGINIA $196,000,000 5th

Source: United States Census Bureau, Foreign Trade

As you can see, Chart No. 4 clearly shows the importance of the aerospace industry to almost every Southern state in regard to export values. Aerospace represents the No. 1 export in five Southern states and a top 5 export in all but two Southern states. In some, such as Alabama and South Carolina (where Airbus and Boeing are located), the automotive industry still rules over aerospace in export value.

Transitioning from defense to civil aerospace

Over the last two years, the U.S. exported over $233 billion in an array of aerospace products. Some sectors include civilian aircraft, rotorcraft, commercial space, general aviation, engines, parts, unmanned aircraft systems and alternative aviation fuels.

In terms of trade, things are changing in the industry and fast. In 2009, 41 percent of all exports were defense-related and 59 percent were from the civil sector. Today, defense-related exports have dropped below 30 percent of total U.S. aerospace exports, with the civil sector dominating the market, according to the U.S. Department of Commerce.

Military sales in aerospace are down across the board, with aircraft sales dropping from $70 billion in 2010 to $56 billion in 2013. Missile sales are also down, from $23.5 billion in 2010 to $21.4 billion in 2013. In contrast, civil aircraft sales are on a great roll growing from $48.2 billion in 2010 to an estimated $72.1 billion this year.

In the fall of 2009, in the depths of the recession, I took a visit to North Carolina. One of the places I stopped was in New Bern, N.C., to check out one of several military bases in that area. I was a passenger in the car with the mayor of New Bern and the economic developer of Craven County. As we approached the base at Cherry Point, I looked out at the long runway and saw hundreds of shiny new MRAP (Mine Resistant Ambush Protected) vehicles parked on the tarmac. Most of those MRAPs were made in the South at facilities in Mississippi and Arkansas. In the distance, on the other side of the runway, were several massive C-5 airplanes and other transport aircraft.

As we drove around the airport, I also saw several Sikorsky-made Black Hawk helicopters, covered in shrink-wrapping. I was familiar with the Black Hawk, as I had visited the United Technologies plant in Palm Beach County, Fla., one of the locations in the U.S. where they are assembled. The Black Hawk is the meanest-looking defense mechanism I have ever seen.

The made-in-the-USA defense products were being flown to Afghanistan the next day by the giant planes on the other side of the runway. It was an amazing sight to see. As we were driving, the mayor said something so profound that I will never forget it. He said, "Craven County's economy will continue to grow as long as peace doesn't break out." That comment got me thinking. Don't we want peace? So, the cover of the next issue of SB&D bore the title "What if Peace Breaks Out? The Economic Impact of the Defense Industry in the South." The story was essentially a debate on what would be the inevitable; that when "peace does break out," how will it affect the South's economy?

While we are not totally at peace, the U.S. and the American South are feeling the effects of defense cuts as a result of the withdrawal of forces from Iraq and Afghanistan and government's cutbacks in defense that have occurred since I made that visit to Cherry Point in 2009. Cool thing about the timing is this: almost exactly when "peace broke out" and the wars drew down, the economy got legs in 2010 and the civilian sector of the aerospace industry began growing dramatically, filling the void of defense cutbacks in the South.

That doesn't mean that the defense industry doesn't have a huge presence in the American South as it relates to the aerospace industry. In fact, nine of the 10 largest military bases in the U.S. are located in the South along with 33 Air Force bases. There are only 43 Air Force bases located outside the South in the U.S. As for defense expenditures by U.S. region, more is still spent in the South than the three other U.S. regions combined.

The U.S. space program is a "Southern thing"

The American South has been the heart of the U.S. space program since its implementation decades ago, and will also be the center of space exploration activity in the future. The U.S. space program, including NASA and several private space programs such as SpaceX, are in the midst of the biggest transition the nation has seen. Major National Aeronautics and Space Administration (NASA) centers in the South include Kennedy Space Center (Cape Canaveral, Fla.), Johnson Space Center (Houston), Langley Research Center (Hampton, Va.) and Marshall Space Flight Center (Huntsville, Ala.).

The mission of NASA is to pioneer the future in space exploration, scientific discovery and aeronautics research. The agency carries out its work in four mission directorates: aeronautics, exploration systems, and science and space operations. NASA also operates multiple Earth-observing and remote sensing scientific satellites. There are several agencies that NASA works with in the space program including the Department of Defense, National Geospatial-Intelligence Agency, Missile Defense Agency and the U.S. Strategic Command, among others.

As for manned space flight, since the retirement of the space shuttle program in July 2011, NASA has had to pay the Russians $70 million a seat to fly American astronauts to the International Space Station. Charles Bolden, head of NASA, has called the arrangement "unacceptable" considering the tensions between the two countries over the situation in Ukraine.

The Space Launch System, or SLS, will be designed to carry the Orion Multi-Purpose Crew Vehicle, as well as cargo, equipment and science experiments to Earth's orbit and beyond. Parts for the SLS are being built at various places throughout the country and in the Southern Aerospace Currently, NASA is developing its Space Launch System, a $12 billion program that might see its first manned test flight in late 2017. In August, NASA announced it had approved moving the Space Launch System (SLS) from formulation to development and most of the work on the project is being done in the South. The last exploration-class system that was approved for the development stage was the Space Shuttle, and before that were the Apollo missions.

The SLS will be the largest rocket ever built and more powerful than the Saturn V, which launched astronauts on Apollo moon missions. The SLS uses components from the Space Shuttle and the cancelled Constellation program. Sitting on top of the giant SLS rocket will be the manned and unmanned versions of the Orion Multi-Purpose Crew Vehicle. A manned mission to Mars is the ultimate goal of the SLS.

The core stage of the SLS, which holds the tanks that provide fuel to the rocket's engines, are being fabricated at the Michoud Assembly Facility in New Orleans. Michoud spokesperson Kimberly M. Henry said in a story published by The Advocate on September 2, that work on flight hardware on the SLS is being built "now as we speak."

Passengers may one day enjoy smoother flights in bumpy air with computer-operated seamless wings, and the military sees smooth, seamless control surfaces as a way to enhance radar-defeating stealth qualities. NASA is working with Boeing and the U.S. Air Force on the AAW project. The quest for a morphing aircraft that changes its shape in flight to meet requirements is ongoing at several NASA aeronautical centers. NASA is spending about $250 million on the SLS system at Michoud and about 690 workers are supporting the program. Michoud is also producing the Orion module that will hold a crew of four. The Orion is also being made at the Kennedy Space Center in Brevard County, Fla. One model successfully completed its first unmanned test mission in December.

Other parts of the SLS are being built at various places throughout the country and in the Southern Aerospace Corridor. For example, the companies selected for SLS Advanced Booster contracts are ATK Launch System of Promontory, Utah; Dynetics of Huntsville, Ala.; and Northrop Grumman Aerospace Systems in Redondo Beach, Calif.

The rocket used for initial test flights of the Orion that start in December will be the Delta IV heavy-lift rocket made by the United Launch Alliance in Decatur, Ala. The RS-25 engines that will be used are being tested in Huntsville and at the Stennis Space Center in Mississippi. The rocket's avionics computer software is being developed at NASA's Marshall Flight Center and the entire SLS program is being managed by the Marshall Space Flight Center in Huntsville. SLS launches will be conducted at the Kennedy Space Center in Florida.

Yet, since manned missions on the SLS are still a minimum of about five years away, all this does nothing about the current situation of being forced to hitch rides on Russian Soyuz spacecraft to launch American astronauts to the International Space Station at $70 million a pop. 

NASA solved that problem in the fall quarter when it selected Boeing and SpaceX to transport U.S. astronauts to and from the International Space Station using their CST-100 and Crew Dragon spacecrafts. The U.S.-based, privately-owned space vehicles will essentially be rentals until the SLS can begin manned flights in 2018. The decision by NASA to use private companies should enable the U.S. to launch astronauts from American soil to the International Space Station sooner than 2018, and the cost is expected to be about $20 million a seat compared to $70 million per seat the Russians are charging.
In August, Elon Musk's SpaceX chose a site east of Brownsville, Texas near Boca Chica Beach for a commercial launchpad. The $100 million project is expected to create 500 jobs in 10 years. The project includes a ground-tracking facility, control center and launchpad. The facility is designed to launch about one satellite a month. The company also has a rocket development and testing center in central Texas near Waco.

SpaceX also launches its rockets at California's Vandenberg Air Force Base and from historic Launch Complex 39A at the Kennedy Space Center. Numerous Apollo missions and Space Shuttle missions have launched from pad 39A, which is now under the management of SpaceX. 

Aerospace R&D advances in the region

Boeing Defense, Space & Security is based outside St. Louis, Mo., and is the second-largest defense contractor in the world. The company's EA-18G Growler is the cornerstone of the naval Airborne Electronic Attack mission.In addition to being the heart of the space program and a leader in aerospace manufacturing and MRO, the Southern Aerospace Corridor is increasing its knowledge base as research and development in the field is surging. Last year, Boeing announced it was relocating 2,000 research jobs out of Washington State to new research and development centers being built in Huntsville, St. Louis, North Charleston, S.C., and Southern California. Ultimately, the centers will house up to 4,000 workers.

Virginia-based Northrop Grumman just opened its Aircraft Center of Excellence in St. Augustine and has broken ground on another in Melbourne, Fla. The new centers will improve strategic alignment and solutions and house integration laboratories. Together they represent 1,400 new jobs and an investment by Northrop Grumman of over $170 million.  

Carpenter Technology is gearing up its $518 million premium metals plant in Athens, Ala. But the sexiest part of Carpenter's investments was the recent announcement that it is building a $20 million facility next to its metals plant that will produce superalloy powder for aircraft engines. The company recently won a contract with Pratt & Whitney to produce the superalloy powder for the jet engine manufacturer for up to 20 years.

The Space Launch System, or SLS, will be designed to carry the Orion Multi-Purpose Crew Vehicle, as well as cargo, equipment and science experiments to Earth's orbit and beyond. Parts for the SLS are being built at various places throughout the country and in the Southern Aerospace Corridor.Aerospace companies bidding and conducting federal R&D contracts are located in just about every Southern state. Companies such as GE Aviation, Lockheed Martin, Boeing, United Space Alliance, L-3 Communications, Raytheon, Textron, Bell Boeing, GKN, BAE, EADS and Finmeccanica and others have R&D facilities of some kind in the American South. 

The South rules in these mostly unreported aerospace sectors

When writing about the aerospace industry, most writers concentrate on advanced manufacturing such as engines, aircraft, missile assembly and advanced materials. But there is a huge contribution in the South from the white-collar side of the sector. Three of the four largest airlines in North America based on enplaned passengers are headquartered in the South -- American (1) in Fort Worth, Delta (2) in Atlanta, and Southwest (4) in Dallas.

An interesting side note, American Airlines relocated its headquarters from Midtown Manhattan to the Dallas-Fort Worth market in 1978. The move affected about 1,300 jobs and Ed Koch, the mayor of New York City at the time, called it a "betrayal" of the city. Today, American Airlines employs nearly 5,000 workers at its headquarters in Fort Worth, which is located adjacent to the Dallas-Fort Worth International Airport.

Delta operates its headquarters adjacent to the airport in Atlanta after being founded in Monroe, La., in 1925, thus the name "Delta." The airline has over 80,000 employees, with about 25,000 based in Atlanta.

Southwest Airlines maintains its headquarters on the grounds of Dallas Love Field. As of yearend 2013, the world's largest low-cost carrier had nearly 45,000 employees. 

As one of the two largest airfreight hubs in North America, the FedEx fleet awaits dispatch at the company's Memphis World Hub. Louisville, Ky., is home to the UPS hub.Also, the two largest airfreight hubs in North America are located in the South -- the FedEx hub in Memphis and the UPS hub in Louisville. DHL also operates a large hub in Louisville and UPS has one in Memphis. Both FedEx and UPS have their headquarters in the South, with UPS headquartered in Atlanta and FedEx in Memphis. UPS relocated its headquarters to Atlanta from Greenwich, Conn., in the fall of 1991.

The UPS hub in Louisville has over 20,000 employees and can handle 119 packages a second at its facility, which is the size of 80 football fields, at the Louisville International Airport. The FedEx hub in Memphis has a workforce of 11,000 at its facility at the Memphis International Airport. More than 10,000 arrival and departure flights pass through the Memphis World Hub each month and the facility handles on average 1.5 million packages daily.

The South is also home to the busiest airport in the U.S., Hartsfield-Jackson Atlanta International Airport, and the competition with other U.S. airports isn't even close. The airport in Atlanta handled over 45 million passenger enplanements in calendar year 2013. Los Angeles International Airport was second with 32.4 million.


I began this article by comparing the automotive industry and the aerospace industry in the South, and they are by far the most sought-after projects in just about every Southern state. Petrochemicals may be the hot topic in the region over the last several years, but no two industries top the export or gross state product generation charts more so than automotive and aerospace in almost all Southern states.

But the Southern Automotive Corridor hasn't seen a new assembly plant since Volkswagen announced its Chattanooga facility in 2008. And since then, Mexico has landed several automotive assembly plants. At least half of those would have landed in the South if the U.S. had trade pacts with Europe and Asia.

Yet the Southern Aerospace Corridor has captured both Boeing and Airbus OEM facilities, meaning large commercial aircraft will be fully assembled in two U.S. states outside of Washington State for the first time in decades. The automotive industry is not contracting in the South, as Tier 1, 2 and 3 suppliers continue to be attracted to the region and existing OEMs keep expanding. And the Southern Auto Corridor should see one or two new assembly plants soon.

In terms of potential, however, the aerospace sector might at some point challenge the automotive industry in the South for manufacturing supremacy. After all, the American South is the least expensive place to manufacture a product in the largest economy in the world. And since, historically, the aerospace industry has long been located in union strongholds in places such as California, Kansas, Connecticut and Washington State, that helps the region with companies looking to relocate out of those states. In fact, the aerospace migration to the Southern Aerospace Corridor is just now getting started. And it's a beautiful thing to watch.

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