Conference Presentation, Panel, Fireside Chat
The Future of Aerospace in California
- California holds approximately 25% of the U.S. aerospace development market and $23 billion in defense spending concentrated between Los Angeles and San Diego.
- The state hosts roughly 70,000 aerospace engineers in the Los Angeles area and 40,000 in the Bay Area, creating a bimodal workforce with a significant population aged 50–65 and a new generation of young engineers.
- Virgin Galactic is constructing a spaceship in Mojave and a satellite launch vehicle (LauncherOne) in Long Beach, with test flights targeted for 2017.
- George Whitesides (Virgin Galactic CEO) anticipates launching dozens to hundreds of small satellites from the California coast, specifically launching over the Pacific from Mojave to reach polar orbits.
- Virgin Galactic currently has approximately 700 customers for space tourism; following a fatality, about two dozen customers requested refunds, but loyalty has largely restored pre-tragedy numbers.
- JPL is developing the 2020 Mars rover mission, which aims to detect signs of past life on Mars, building on previous discoveries of historical water presence by the Curiosity rover.
- JPL operates as a federally funded research and development center that contracts over 50% of its NASA funding to external industry suppliers rather than building all components internally.
- Ace Clearwater Enterprises, a 200-person family-owned manufacturer in Torrance, faces a workforce challenge where 75 of its 200 employees are aged 50–65, predicting a significant "brain drain."
- Ace Clearwater spent roughly $5,000 per hire and filled 14 positions this year but retained only five of them, attributing losses to candidates failing drug tests or lacking trainability.
- Regulatory compliance costs Aerojet Rocketdyne and manufacturers like Ace Clearwater approximately $9,000 per employee annually, involving adherence to over 43 labor laws and significant environmental legal counsel.
- Aerojet Rocketdyne received $536 million in funding for the new AR-1 rocket program, split between government partnerships and internal investment, to lower launch costs via additive manufacturing.
- Additive manufacturing (3D printing) has reduced engine costs for Aerojet Rocketdyne by 50% in certain areas, enabling new capabilities in hypersonics and supersonics.
- The U.S. aerospace industry faces a 17% structural cost disadvantage compared to major trading partners, driven by high corporate taxes and regulatory burdens that competitors in other nations do not face.
- California lacks robust state-level liability protection laws for space manufacturers compared to New Mexico, Florida, and Virginia, a gap that Virgin Galactic suggests influences investment decisions.
- Direct airship manufacturer Straight Line Aviation, partnering with Lockheed Martin Skunk Works, is developing hybrid airships capable of carrying 22 tons immediately, with plans for 500-ton variants to transport cargo across the Pacific in 2.5 days.
- JPL's 2020 Mars mission will carry instruments to look for signs of past life, following the 2004 rovers' confirmation of water and Curiosity's 2012 confirmation that conditions once supported life.
- Kelly Johnson (Ace Clearwater) estimates regulatory costs at $9,000 per employee, necessitating a dedicated HR team of 2.5 people and external environmental and labor attorneys to manage compliance.
- The "New Space" model involves NASA providing seed money for commercial entities to develop reusable technologies (e.g., Commercial Crew), shifting from the traditional model where NASA owns the hardware.
- Competition is identified as a primary driver for innovation and cost reduction, with multiple entities encouraged to maintain market dynamics for reusability and efficiency.
- Solar electric propulsion stages are being developed as "transfer states" to enable reusability in space, moving payloads between orbits rather than just returning to Earth.
- JPL reports an annual employee attrition rate of 2–3%, with higher turnover occurring early in careers when employees relocate due to the high cost of living in California.
- Lockheed Martin Skunk Works has contracted to build the first 12 hybrid airships, with final assembly occurring at their facility in Palmdale, while future production for larger 500-ton models would require a new facility.
- Future outlooks from panelists include: Virgin Galactic flying customers weekly and launching satellites monthly by the mid-2020s; JPL exploring Europa and Earth observation via small satellite constellations; and Aerojet Rocketdyne producing AR-1 rockets and nuclear propulsion for Mars.
- SpaceX's headquarters in Hawthorne are cited as a key factor in retaining the aerospace ecosystem in Southern California, repurposing old Boeing facilities and utilizing the existing skilled labor pool.
- The industry is shifting from a process-based, requirement-heavy model to a product-based approach leveraging Commercial Off-The-Shelf (COTS) technology and Moore's Law for rapid innovation cycles.
- Defense strategy is evolving toward a "Third Offset" to counter emerging threats from China and Russia by integrating Silicon Valley speeds of innovation and small satellite fleets into military applications.
- Panelists emphasized that while some corporate headquarters for aerospace giants have left California, significant operational business units (e.g., Northrop Grumman's $8 billion, Boeing Space & Communications' $8.5 billion) remain in Southern California.
- The "Make in L.A." initiative and the broader "Makers Movement" are cited as local efforts to support manufacturing, though panelists argue further legislative action is needed to reduce regulatory burdens and attract new businesses.
- Jen Simpson (Aerojet Rocketdyne) noted that the company is investing in "green propellants" (high energy, environmentally friendly) alongside nuclear propulsion to facilitate faster, safer Mars missions.
- Jacob Anziel (JPL) confirmed that JPL has roughly a dozen employees collaborating with SpaceX on navigation for their Mars landing programs, transferring government know-how to industry partners.
- The panel concluded that California's future in aerospace depends on retaining the robust supply chain ecosystem (anodizing, heat treating, painting) that cannot be easily replicated elsewhere.