Helena hoping Boeing expansion attracts more investment

2013-12-22T00:00:00Z Helena hoping Boeing expansion attracts more investmentBy DEREK BROUWER Independent Record The Billings Gazette
December 22, 2013 12:00 am  • 

HELENA — Helena is known as a stable government town, but will a growing aeronautics industry make the capital city’s economy soar?

Two industry milestones during the past six months have city officials hopeful that the expanding manufacturing sector will ripple through the local economy and attract further investment.

Boeing made state headlines in September when CEO Jim McNerney announced a $35 million expansion to the company’s Helena facility during the economic development summit in Butte.

The expansion will increase the manufacturing plant by about one-third, to 167,099 square feet, and add some 20 to 25 jobs to its 144-person workforce.

“It is a major increase in what we do here,” McNerney said at the time. “It is significant.”

Also this year, constructions crews broke ground on a facility for Pioneer Aerostructures — the latest venture by local industry entrepreneur Tom Hoffman.

Pioneer will manufacture high-end parts for commercial and military aircraft and employ between 12 and 24 people, Hoffman has said previously.

Together the two projects total $53 million and may add as many as 50 jobs. It’s the latest addition to a sector that has grown steadily in Helena over the past 16 years.

“It’s a growth industry for us,” said Ron Mercer, director of the Helena Regional Airport Authority, which leases the land for both facilities. “I’m really excited to see this expansion.”

He said Boeing and Pioneer offer good jobs with strong benefits in an industry that has proven to be successful in Helena.

Aircraft manufacturing took root here in 1997, when Hoffman started Summit Aeronautics in 1997.

Summit began with four employees and a 25,000-square-foot plant, Mercer said. By 2010 the company had 135 employees and caught the eye of Boeing, which purchased it. “There wouldn’t be aerospace in Helena if it wasn’t for Tom Hoffman,” Mercer said.

The Boeing plant manufactures precision hard-metal parts for the company’s commercial aircraft, including the new 787 Dreamliner.

Since acquiring the facility, Boeing has added a handful of jobs and invested more than $11 million in equipment.

Helena city manager Ron Alles called Boeing-Helena a core business that brings diversity to the area economy and injects money into the community.

“For us to be a part of a worldwide corporation, to have that little piece of the pie, I think is big for us,” he said.

Boeing purchased $5.9 million from 86 Montana suppliers in 2012, according to figures provided by the company. Its supplier purchases have increased $2.6 million since 2010, said public relations officer Bev Holland.

The aeronautics industry may be a large employer in the area, but it isn’t the largest. Boeing isn’t among the city of Helena’s top 10 employers, the only group for which comparison data is available. Summit was listed by the Department of Labor and Industry as one of the county’s top 20 private employers in 2011, though the agency doesn’t provide specific rankings.

In 2013 Boeing had the seventh highest taxable valuation in the city at $342,395.

The city and county, meanwhile, have invested in the industry through tax breaks, hoping it will continue to grow.

Commissioners granted a tax abatement for Summit in 2002, and another nearly $900,000 abatement in 2008, and last year Boeing was forgiven an estimated $811,860 in taxes during 10 years when it purchased new equipment.

With the latest projects, further tax abatement requests may be on the way. Holland said Boeing is working with staff and elected officials to see if the company qualifies for another one. Hoffman did not return a call for comment for this story.

City manager Alles said if he were in their position, he would apply. He said granting the abatements demonstrate to the corporate offices that the city is “open for business.”

“We want to work with these companies to continue to invest in Helena,” he said.

Through in-state purchases Boeing estimates it supports about 200 jobs in Montana in addition to its own employees.

That number doesn’t include the secondary economic benefits induced by employees into other sectors like real estate, retail and restaurants — the “trickle down” that Alles said adds to the economy in other ways.

One clear impact is the pipeline the industry has developed for graduates at Helena College.

Helena College CEO Daniel Bingham said many graduates in the school’s computer-aided manufacturing program go to work for Summit and now Boeing each year.

The college has been growing the program for several years, having projected the need for the skill set, he said. A Boeing representative sits on the program’s advisory board, which the college uses to adjust curricula to fit industry trends.

“There is a high demand for skilled workers and employers compete for them,” Bingham said, noting that all CAM graduates are employed.

He hopes Pioneer will also seek Helena College graduates, and that both companies “will attract industries to complement their work.”

Both Mercer and Alles said the economic promise of investments by Boeing and Pioneer is that they won’t be the last.

“To me, with two of these companies, there’s probably some good opportunity for spin-off businesses” in manufacturing, Mercer said.

Chris Shove, executive director for Montana Business Area Connection, said Helena has lacked an industrial base that creates chances for such spin offs. He said he hopes aeronautics can become an industrial cluster for the county.

Alles said he hopes the latest expansion is only “phase one.” Boeing “isn’t a fly-by-night company,” he said.

“Aerospace is a nice little niche that we’re going to have in Helena. The opportunity for that niche to grow is real,” he said.

Mercer said he is glad Helena can capture a piece of the industry, given that Montana doesn’t boast a lot of manufacturing.

And he’s very optimistic about the future.

“If I was going to project out in another 10 years, just doubling I don’t think is even adequate,” Mercer said. “The potential is only what you can imagine.”

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