Charlotte — A Defense Industry Magnet

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CLEARLY, CHARLOTTE HAS BECOME A MAGNET for defense related industries. In recent years several new defense related companies have moved to Charlotte and the surrounding area. This new growth, along with a focus by traditional industries on defense contracts, has created an emerging defense related cluster in Charlotte.

Four of the nation’s top ten defense contractors have facilities in Charlotte. Locally, 781 contracts were awarded in 2008 totaling almost $455 million. In the past three years alone, $1.1 billion in defense contracts have been issued to Mecklenburg County firms.

Companies receiving these contracts include Bank of America, Barrday, Curtiss-Wright Controls, General Dynamics, Goodrich Corporation,  Ingersoll-Rand,  Michelin Aircraft, Microsoft Corporation, Northrop Grumman Space & Technology and Tessera Digital Optics. These operations include headquarters, manufacturing and research and development facilities within the area.

Success Breeds Success
In the past ten years, Charlotte has attracted 7,309 new companies which have added 65,214 new jobs to this market. In addition, they have invested almost $12 billion in new facilities. Along with these new companies, an additional 4,244 local companies have expanded their operation by adding 87,438 new employees and invested $9.7 billion in new facilities. During 2008, 1,337 firms created 12,165 new jobs.

Charlotte’s economic growth successes are due in part to the diversity of the local economy. Of the nearly 25,000 businesses located here, they represent virtually every major business sector. Charlotte has seven of the nation’s Fortune 500 companies headquartered here, more than all but seven other U.S. cities. In total, 326 of the Fortune 500 companies have facilities in Charlotte. In addition, 957 Dun & Bradstreet Million Dollar companies have major facilities in Charlotte. Of these, 31 reported sales exceeding $1 billion.

Defense Contractors Choose Charlotte

• Growing concentration of defense related companies call Charlotte home including Curtiss-Wright Controls, General Dynamics, Goodrich and Northrop Grumman.
• A national university that focuses on precision metrology, optoelectronics, microelectronics and information technology.
• Ranked third nationally in its ability to attract young educated workers — with over 6,270 engineers employed locally.
• Center of nation’s fourth largest manufacturing concentration with more than 1,900 manufacturers employing 70,489 productive workers in the Charlotte MSA, yet the lowest unionization rate in the nation.
• Pro-business state and local and federal government officials.
• High quality of life with below average cost of living.
• Seventh nationally in number of headquartered Fortune 500 companies — 26 additional companies exceed $1 billion in annual sales.

Partnering for R&D
Boeing Aerospace, Caterpillar, General Dynamics and Tessera Digital Optics have all formed successful partnerships in the past with the University of North Carolina Charlotte to research and develop a new product — the recently formed Charlotte Research Institute — as an umbrella organization to accelerate research, commercialize technology innovations and foster economic development in the Charlotte region. The Institute focuses on three major research areas: e-business, precision metrology and optoelectronics. Already these areas have become recognized leaders in their industries.

A new multi-million dollar facility will house the Institute, funded in part by a $92 million state bond referendum, and will occupy 100 acres on the UNC Charlotte campus. Included will be three technology centers.

Strategic Location
Charlotte offers convenient access to major national and international markets. Charlotte is the largest city in the nation’s sixth largest urban region and the center of the nation’s fourth largest manufacturing region. Charlotte itself is a midsize city with a population of 716,874. It is servicing a regional population of over 7.1 million within a 100 mile radius. As a result, Charlotte has emerged as a financial, distribution, transportation and cultural hub of the southeast.

A Growing Productive Workforce
Since 2000, Charlotte has experienced a 16 percent increase in its labor force. During the same period, employment has grown by 6 percent compared to a U.S. growth of 3 percent. The U.S. Census has ranked the Charlotte metro area as having the seventh fastest growing rate in the nation and third highest in-migration of young, educated professionals — the population between 25 to 39 years of age. This in-migration is fueling the demand for future productive workers. Annually more than 50,000 people move to Charlotte.

Of the top 20 industrialized states, North Carolina ranks fourth most productive. For each dollar of labor cost, $5.56 of value added is produced by North Carolina labor. As a right-to-work state, North Carolina has the lowest union membership in the nation at 3.0 percent. Cost of labor has historically been a factor for economic growth in the region. The region continues to have a labor cost below the national average.

Affordable Location
Lower living cost, lower construction cost, lower labor cost and lower rental cost all add up to a more affordable location. With a construction cost of 80 percent of the national average, buildings are less expensive. With cost of living at 93 percent of the national average, and the 20th lowest tax rate in the country, the cost of doing business is less.

Available Incentives
Both Charlotte and the State of North Carolina have financial programs to assist defense-related industries in relocating or expanding in the area. The City of Charlotte and Mecklenburg County have incentive grant policies that award companies a cash grant over a five year period based on the project’s net new capital investment and job creation. Larger projects may be extended for up to eight years. The State of North Carolina offers cash incentives to larger impact projects as well as customized workforce training for new and expanding companies.