April 26, 2011
By: Molly McMillin
Gov. Sam Brownback held his first economic summit in Wichita on Monday, focusing on the aviation industry and what Kansas can do to maintain and grow the sector.
The summit – “Kansas Aviation: Soaring into the Future” – was attended by about 160 leaders from large and small aviation companies, the state’s colleges and universities, unions, and local and state government.
The governor and aviation leaders gave prepared remarks to open the summit, which was followed by a roundtable discussion of issues affecting the industry and a question-and-answer session.
Brownback asked aviation leaders gathered at the National Center for Aviation Training for input on what the state’s role should be.
Many business leaders said that the state must continue to fund research and training, such as the National Institute for Aviation Research and NCAT.
A business needs three things – “people, product and capital” – said Spirit AeroSystems CEO Jeff Turner.
The state must also have a friendly, stable tax environment, business leaders said.
And it must work to get engineers graduating from colleges in Kansas to stay here, they said. A shortage of engineers is a problem.
“We need engineers,” Turner said. “We’re going global to get it.”
Officials also talked about how they receive calls from other states wanting to lure aviation businesses away from Kansas with lucrative incentives.
Some offer free land, buildings, loans with interest rates as low as 1 percent and cash in exchange for jobs, said Lynn Nichols, president of Yingling Aviation.
Kansas doesn’t have to offer everything other states do because it’s not building an aviation cluster from scratch, Turner said. It already has a strong supply chain and workforce in place.
But it must offer compelling reasons for business to move to or stay in the state.
The state must focus not on the short term, but on how it can grow the industry over the next 10, 20 and 25 years, Turner said.
Cessna Aircraft CEO Jack Pelton offered a suggestion for a tag line that would recruit business to Kansas: “Government getting the heck out of your way.”
There are a lot of redundancies in state and federal regulations, he said. Streamlining them would lower costs.
More also should be done to help foreign engineering students take jobs with Wichita companies after graduation, leaders said.
A large portion of engineering graduates are ethnically diverse, but companies have to battle bureaucratic obstacles to hire them.
“There has to be an effort to increase the number of visas to international professionals, Brownback said. “That’s where the bottleneck lies.”
Eighty percent of Wichita State University engineering undergraduates are domestic students, said WSU College of Engineering dean Zulma Toro-Ramos. However, 75 percent of the engineering master’s degree students are international students, while 80 percent of doctorate-level students are international.
They come here for their education, but take that training back home with them, leaders said.
Other ideas included:
* Incentives to companies using Kansas suppliers.
* Government presence at trade shows.
* Trade agreements with the countries where it’s difficult to do business.
* The marketing of Kansas suppliers to the world.
* Trade missions to other countries, such as China, to promote the sale of aircraft.
Brownback said he will consider whether a trade mission to China would benefit the industry.
Building a relationship with China to make sure it’s a consumer of products is important, Pelton said.
China’s focus is on “building an industry that replaces us,” Pelton said.
In addition to competitive tax policies, Pelton said the state must make sure current tax policies don’t go away.
For example, operators who bring their Citations to Wichita for repair and inspections don’t pay sales tax on parts or labor.
Brownback said he will look at regulations that could be less intrusive for companies, marketing opportunities and the tax structure.
Most importantly, he said, the state must get out of its “defensive posture in aviation and get on the offensive position.”
“We’ve got all of the assets.”
Now, the state must come up with the “message and the tactics” to grow the industry, Brownback said. His administration will develop ideas arising from the summit into an “action plan” for the industry.
The governor will hold additional summits in the future that focus on growing the state’s economy and creating jobs.
Pelton said he thinks good things will come from Monday’s forum.
“We haven’t done anything like this in the state in the 11 years I’ve been here,” he said.
Source: THE WICHITA EAGLE