Boom Supersonic’s announcement could ‘set off a new manufacturing investment boom’ in Triad

GREENSBORO – Boom Supersonic will invest some $500 million to construct the company’s first manufacturing facility for its flagship supersonic passenger plane, the Overture, at the Piedmont Triad Airport, the company announced today at a press event.

“Winning the Toyota and now the Thunderbird project will draw attention to the Triad as a place to look at for investment by other manufacturing companies,” said Dr. Jeff Sarbaum, Senior Lecturer at University of North Carolina Greensboro, in an interview this week with WRAL TechWire.  “The two projects could set off a new manufacturing investment boom that could create thousands of high paying jobs beyond those that will already be created by Toyota and the Thunderbird project.”

These two projects, along with the existing manufacturing roles in high-skill, high-tech industries, said Sarbaum, position the Triad as a region that has the potential to become “one of the nation’s go to manufacturing hubs.”

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“Can’t do that overnight”

The announcement from Boom Supersonic is further validation that the vision of local and regional officials to prepare the Piedmont Triad for future manufacturing sites is warranted, said Christopher Chung, the CEO of the Economic Development Partnership of North Carolina (EDPNC), in an interview with WRAL TechWire on Wednesday.

“The folks in Greensboro deserve a lot of the credit,” said Chung.  “There are lots of airports in the country, but there are not that many airports that have designated, approved land for industrial development.”

While all airports play a role in economic development, not every airport plays a role in industrial development, but PTI does, said Chung, noting that the airport made this a core part of its mission for the better part of the prior decade.

The region, and therefore, the state of North Carolina, got on the radar of Boom Supersonic, noted Chung, because of the airport’s work to make the site ready for this type of end user.

“It takes long-term planning, public-private partnerships,” said Chung.  “You don’t do that overnight.”

The company began discussing the site with officials in April 2021.

Now, said Chung, “there’s going to be some excellent opportunities for well-known North Carolina aerospace companies.”

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Cultivating a cluster of businesses

According to the North Carolina state budget technical corrections bill passed last year, known as House Bill 334, $106.75 million was allocated for infrastructure investments for the Piedmont Triad Airport, but was contingent on the awarding of a high-yield Job Development Investment Grant (JDIG) to an airplane manufacturer in Guilford County.

That JDIG award has now been approved, and the state incentives package is worth nearly $100 million.

“The aerospace sector has been a high-level target for state and regional economic development officials for years, and the Boom Supersonic project, should it come to pass, fits with that strategy,” said John Quinterno, a professor at the Sanford School of Public Policy at Duke University.  “The general idea from the perspective of economic developers appears to be the cultivation of a cluster of specialized, linked businesses that can benefit from certain shared resources such as a specialized labor force trained by local institutions like community colleges.”

“A lot of well-known established companies that perhaps could play a role in whatever is onboard the Overture,” said Chung, adding that while the Boom Supersonic announcement underscores the state’s position in aerospace, “this is not a new industry for us.”

“With HondaJet, and now with Boom, at PTI, the very few people who don’t yet have us on the aerospace map, well, they got a wakeup call today,” said Chung.

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Talent is top of mind

“Greensboro has some outstanding colleges and universities,” said Sarbaum. “That will be able to train workers for the skills they need  — whether it be managerial, financial, or scientific.  There are excellent educational opportunities in the Triad that will create win-win synergies with the training and employment needs of the companies that choose to locate in the Triad.”

The access to a talented, skilled workforce was almost certainly a leading factor for the Triad landing a $1.29 billion investment from Toyota in December 2021, said Dr. Henry C. McKoy, Jr., the lead entrepreneurship faculty and Director of Entrepreneurship at NC Central University in the School of Business, and a former assistant secretary of commerce at the North Carolina Department of Commerce from 2010-2012, in a conversation with WRAL TechWire in December.

Of the Toyota facility, McKoy noted that there was “a good chance that the workforce will be available by the time the factory would open.”

That’s because, McKoy noted, it is a “certainty” that the community college system is involved in discussions between economic development officials and the companies considering sites in the region for potential investment.

The “Project Thunderbird” incentives package included some $4.7 million in community college grants, according to state officials.

These “back-to-back wins sends a signal to the rest of the manufacturing community that there is something good, and something with momentum, happening in the region,” said Sarbaum.  “Think about what has happened in Charlotte as a result of a few banks choosing to locate there many years ago.”

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Additional benefits

The clustering of new manufacturing jobs in the region could provide additional benefits, in theory, noted Quinterno.

“In theory, businesses in the cluster benefit from not having to recreate all their needed inputs from scratch, while the community benefits from the new jobs and enhanced economic activities,” said Quinterno.  “Additionally, investments in the city’s built environment can benefit a much broader cross-section of local businesses and residents, with those improvements remaining even if the original business closes.”

House Bill 334 requires the average wage for any project to “a high-yield project for an airplane manufacturer in Guilford County” be “at least sixty thousand dollars” and that the allocated funds will be used for improvements at the Piedmont Triad International Airport with $15 million for site work, $35 million for road work, and $56.75 million for the construction of one or more hangars at the airport.

The land upon which such a facility would be based would remain owned by the airport, said Brent Christensen, president and CEO of the Greensboro Chamber of Commerce, at a scheduled meeting of the Guilford County Board of Commissioners on Wednesday morning, at which an economic incentive package was approved.

And that expansion of the airport is meaningful, said Sarbaum.  “The increased regional economic activity may bring more daily flights and give travelers additional alternatives to CLT.”

“The region is in transition with new job opportunities emerging to replace some of the job opportunities that were lost over the last number of decades in the textile, tobacco, and furniture industries,” said Sarbaum.  “For the regional labor force it goes beyond just the jobs that will be created by the Thunderbird project due to the job-creating multiplier effects that will result due to new economic activity and expenditure brought on by those jobs.”

The state is expecting the Boom Supersonic plant to bring in $1.1 billion in net state revenue, according to an economic model completed in conjunction with the project’s consideration.

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But also potential challenges

The project is expected to create 1,761 jobs that pay an average wage of $69,000, with no roles paying a wage of below $15 per hour, according to documents considered by the Greensboro City Council in approving an economic incentive to help land the project.

Those jobs may well contribute to the economic growth and vitality of the region, said Quinterno, as would any addition of skilled, higher-paying jobs across a number of occupations and industries.

“As of the middle of 2021, the average weekly wage in the broad Triad region was $976 per week, which annualizes to a salary of just under $51,000,” Quinterno noted.  “In the broad manufacturing sector, the average regional weekly wage was $1,122, which annualizes to a salary of roughly $58,000.  Seen that way, the minimum salary being touted for this project is not that much more than the region’s existing manufacturing wages.”

That’s why it’s important to know exactly what is promised by all parties involved in the project, said Quinterno, as there is some significant business risk involved in the aerospace manufacturer’s plans.  “There also is some significant business risk since Boom Supersonic is attempting to modernize a technology that has struggled mightily with commercial viability in the past,” said Quinterno.  “Will the envisioned market for these supersonic transports actually be there in a post-COVID world, assuming the firm can handle all the technological challenges related to the development of the new aircrafts?”

If not, said Quinterno, the “firm’s promises about jobs and economic impact will be moot.”

Boom Supersonic’s announcement could ‘set off a new manufacturing investment boom’ in Triad