AEROSPACE • DEFENSE

AEROSPACE AND DEFENSE INDUSTRY AEROSPACE • DEFENSE

ARIZONA IS AT THE FOREFRONT OF THE AEROSPACE & DEFENSE INDUSTRY

From cybersecurity to maintenance, repair and overhaul, the Aerospace & Defense industry flourishes in Arizona. BAE Systems manufactures body builds and General Dynamics Mission Systems armor at its Phoenix facility. refurbishes the innovates in the fields of secure U.S. Army’s Apache communications networks, radios, Sustaining and expanding helicopters in Mesa. and cybersecurity at its Scottsdale facility. the state’s industry are: • Specialized manufacturing capabilities • Pro-business regulatory climate • Culture of is Raytheon’s guided Orbital ATK produces Robertson Fuel Systems • A dry, sunny climate developing unmanned missiles division is and launch fabricates fuel aerial systems in headquartered in vehicles at facilities in tanks in Tempe. • Miles of wide open space Sierra Vista. Tucson. Chandler and Gilbert. • A strong commitment to America’s military

Arizona’s expertise ensures the state will remain at the leading edge of the Aerospace is L3 Communications builds MD Helicopters is headquartered Aerospace & Defense industry’s most headquartered in Phoenix and avionics systems at its Phoenix in Phoenix and manufactures manufactures propulsion engines facility. several of its helicopter models in critical advances. and auxiliary power units. Arizona.

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ARIZONA IS A TOP THREE STATE FOR AEROSPACE MANUFACTURING ATTRACTIVENESS

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INDUSTRY HIGHLIGHTS AND RANKINGS

Federal Spending Aerospace & Defense Exports The aerospace industry • $11.8 billion in total federal contracts in • $3.99 billion total Aerospace & Defense in the region includes fiscal year 2016 exports in 2016 • $9.1 billion in Department of Defense • $983 million nominal growth in contracts in fiscal year 2016 and launch vehicle exports 1,860 from 2015–2016 companies • Top 10 state for Aerospace & Defense Labor Market export products in the nation responsible for over • 54,112 employees • Aerospace & Defense products made up • $4.75 billion total annual payroll 18% of Arizona’s total exports for 2016 • 1,200+ establishments 62,000 jobs

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3RD LARGEST MAINTENANCE, REPAIR AND OVERHAUL ECONOMIC IMPACT AT $4 BILLION

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ARIZONA IS STRONG ACROSS AEROSPACE & DEFENSE INDUSTRY SEGMENTS

Maintenance, Repair and Overhaul Cybersecurity Total economic output for Arizona is home to many MRO facilities, Arizona’s cybersecurity professionals aircraft, aircraft engine, and parts manufacturing: including 139 FAA-certified operations. protect many of America’s top companies. Among these is Marana Aerospace Large companies such as Honeywell, Solutions near Tucson. One of the largest Charles Schwab, American Express and $11.8 MRO facilities in the world, the 1,200- Securosis have some or all their security acre complex can accommodate up to teams based in the Valley, while other 400 aircraft. Per the Aeronautical Repair Arizona research firms such as ARTIS work billion Station Association’s 2017 report “U.S. to understand human and state behavior (Top Five State) Employment & Economic Impact,” Arizona’s related to cyber warfare. Many of the top total aviation maintenance employment cybersecurity companies in the world have is 16,673, the sixth highest in the nation. operations in Arizona including: Arizona’s MRO operations have a total • BAE Systems • Cisco economic activity of $4.0 billion, the third • EY • IBM highest in the nation. • LifeLock • • Raytheon • root9b

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4TH LARGEST EMPLOYMENT IN AEROSPACE & DEFENSE MANUFACTURING WITH 32,546 WORKERS

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ARIZONA IS STRONG ACROSS AEROSPACE & DEFENSE INDUSTRY SEGMENTS

Arizona Airport System Unmanned Aerial Systems and moving 800 tons of air cargo every o o ¦¨§15 o o Arizona serves as a hub for in day. Tucson International Airport offers o o o o (UAV)/Unmanned 19 nonstop destinations and serves an o o o o o o Aerial Systems (UAS) technology. Four of average of 3.2 million passengers annually. o o o Flagstaff the state’s prominent universities – In total, there are 83 airports in Arizona. o o o o ¦¨§40 o o o o University of Arizona, Arizona State o o o o Yuma’s airport has unparalleled military o o ¦¨§17 University, Northern Arizona University and o o ties and is home to one of the country’s o o Embry-Riddle Aeronautical University – are o o Luke AFB o o o most prestigious defense aviation parks, 10 o ¦¨§ o engaged in UAS-related research projects. opoo o o o o o Yuma Proving Phoenix o o the 120-acre Defense Contractor Complex Ground In addition, Arizona State University, o o Marine Corps o o o o p ¦¨§8 p o o (DCC). The DCC is located near the airport Air Station Yuma o Embry-Riddle Aeronautical University and o Barry Goldwater ¦¨§10 o o Yuma Range o o o Davis-Monthan AFB and Yuma Proving Grounds, and supports Tucson the Unmanned Vehicle University offer o o p o o defense contractors such as Boeing and o Ft. Huachuca Libby AAF 19 degrees in UAS. o ¦¨§ o o other firms by providing a secure space to Commercial Service - Major o o o o o o Commercial Service - Primary

Top-Ranked Aviation Facilities and complete technical testing. o Commercial Service - Secondary Military Installations p State Trust Land Strategic U.S. Military Installations Military Bureau of Land Management o Reliever Airports In addition, the Department of Defense National Parks and Forests Phoenix Sky Harbor, Arizona’s largest o General Aviation Tribal Lands has several military installations across the Highways airport, is ranked among the busiest Bureau of Reclamation 0 25 50 100 Miles state including Davis-Monthan Air Force Fish and Wildlife Service ± 10 commercial airports in the United Base in Tucson, Fort Huachuca in Sierra States offering nonstop service to 80 Vista, and Luke Air Force Base in Glendale. destinations, with more than 1,200 flights serving more than 120,000 passengers

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6TH LARGEST EMPLOYMENT IN MAINTENANCE, REPAIR AND OVERHAUL WITH 16,673 WORKERS

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ARIZONA IS STRONG ACROSS AEROSPACE & DEFENSE INDUSTRY SEGMENTS

Space Optics Steward Observatory Orbital ATK produces satellites in the Optics and photonics have long been a key Mirror Lab greater Phoenix area while scientists from piece of modern innovation and the Tucson Located underneath the around the world visit Arizona’s Mount region, sometimes referred to as Optics campus of the University Graham International Observatory and the Valley, is a leader in the state’s $3 billion of Arizona in Tucson, Lowell Observatory to conduct research optics industry. The University of Arizona which offers the largest on submillimeter wavelengths, galactic serves as a hub for these innovations astronomy graduate astronomy and star positioning. Both and is currently producing some of the program in the country, Arizona State University and the University largest and most advanced telescope the Mirror Lab is helping of Arizona have been instrumental in mirrors for use in the Magellan Telescope. astronomers capture the furthering research about Mars, including Southern Arizona manufacturers offer a most miraculous images developing instruments used on the Mars wide range of precision-machined optical of the universe to better rovers Spirit, Opportunity and Curiosity. products and instruments as well as optical understand the secrets of Travel to space, once the exclusive purview services. our galaxy. of elite astronauts, is now being marketed to tourists and adventurers. In Tucson, World View Enterprises has developed a high-altitude balloon capsule capable of taking travelers and payloads more than 19 miles above the earth.

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8TH LARGEST IN AVIATION AND AEROSPACE SERVICES WITH 21,566 WORKERS

2ND LARGEST EMPLOYMENT IN GUIDED MISSILE AND SPACE VEHICLE MANUFACTURING WITH 11,239 WORKERS

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ARIZONA IS EDUCATING THE FUTURE AEROSPACE & DEFENSE WORKFORCE

Arizona’s Aerospace & Defense research initiatives abound at the university level, demonstrating both the state’s commitment to the industry’s growth and strong cooperation between Arizona’s businesses, universities, community colleges and K–12 schools.

Arizona State University has Northern Arizona University Riddle 13th in the country for Western Maricopa Education approximately 20,000 students has developed a curriculum that its undergraduate engineering Center offers high school students enrolled in engineering programs, aligns perfectly with the state’s programs at schools where no opportunities to train for jobs including nearly 750 aerospace aerospace and defense initiatives. doctorate is offered. in growing industries, including engineering students. U.S. News This includes diverse astrophysics aerospace and defense. West- The Maricopa County Community and World Report 2017 ranked programs, mechanical MEC students can complete a College District has 206,000 ASU #1 in the U.S. for innovation. engineering, aerospace studies, two-year program in aviation students enrolled. Many adaptive research and materials, technology which prepares them The University of Arizona offers of the community colleges composites, and optics. for a career in aircraft repair and a wide range of activities and offer specialized programs maintenance. After completing academic opportunities to more Embry-Riddle Aeronautical in automation, welding, and the program, the students than 2,600 engineering students. University is the only fully advanced manufacturing, each can test for FAA airframe and U.S. News and World Report 2017 accredited, aviation-oriented based on local employer input. powerplant certification. West- ranked UA third nationwide for its university in the world. It has a The system also offers specialized MEC also offers a two-year management information systems total undergraduate enrollment programs for employers, including avionics and electronics program program. of 2,205. U.S. News and World Boeing and Caterpillar. that allows students to test for Report 2017 ranked Embry-

12 the Federal Communications The East Valley Institute of Commission certification. Technology prepares high school students for careers in Pima Community College’s Aerospace & Defense through its Aviation Technology Programs are aviation program. The program commercial aviation-oriented and has several tracks including provide pathways to the aviation flight operations, flight service, maintenance field. Specifically, unmanned aerospace vehicles, Pima Community College air traffic control, maintenance, provides a structural repair air transportation, and flight program, an avionics technician operations. The program varies program, and an airframe and in length of time to complete powerplant certification program. depending on which area of All programs award students focus a student chooses, but certificates or associate degrees, some courses qualify for dual and several programs also provide enrollment with the Maricopa federal licensure opportunities. County Community College System.

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ARIZONA OFFERS PROGRAMS DESIGNED TO ENHANCE THE SUCCESS OF AEROSPACE & DEFENSE COMPANIES.

Arizona has lowered taxes, streamlined regulations, and established a suite of programs to support corporate growth and expansion.

Quality Jobs Tax Credit Program Research & Development Tax Credit Program Foreign Trade Zone Tax Credit Program Provides tax credits to employers creating new Provides income tax credits for increased Provides up to an 80 percent reduction in state jobs and making capital investments in Arizona. research and development activities conducted real and personal property taxes for businesses in Arizona. located in a foreign trade zone or sub-zone.

Qualified Facility Tax Credit Program Offers a refundable income tax credit to eligible Military Reuse Zone Tax Credit Program Job Training Grant Program manufacturing companies making a capital Provides a transaction privilege tax (sales tax) Provides up to a 75 percent reimbursement of investment to establish production facilities or exemption or property tax reclassification for eligible training expenses to employers creating manufacturing-related research & development aerospace & aviation companies or airport new jobs. or headquarters operations. authorities located in a military reuse zone.

14 Additional Depreciation Program Accelerates depreciation schedules for prospective acquisitions of commercial personal property.

Public Infrastructure Funding Program for Manufacturing Provides manufacturers a means of mitigating infrastructure costs by allowing construction sales tax dollars to be redirected toward public infrastructure costs.

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For further information:

Sandra Watson, President & CEO 118 N. 7th Avenue, Suite 400 Phoenix, AZ 85007

Phone 602.845.1200 • Fax 602.845.1201

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