By Henry Read

NC’s Big Bet  

In January 2022 NC Governor Roy Cooper, along with other political notables, announced that Boom Supersonic would be opening its “Overture Superfactory” at Piedmont Triad International Airport (PTI). This facility is intended to test and build supersonic airliners. Boom claims it will employ 1,750 people by 2030 and lead to over $0.5 billion in investment in Guilford County. Officials project that Boom’s presence in the state will expand GDP by $32.3 billion by 2035 [1]. This potential windfall won’t come cheap; to attract Boom NC and Guilford offered $236 million in incentives, including infrastructure improvements at PTI, tax abatements, expansion of aerospace-related community college programs, and the first-ever use of NC’s High-Yield Job Development Investment Grant (HYJDIG) [1]. These incentives were instrumental in outbidding Jacksonville, FL and Spartanburg, SC for the Superfactory [2].  

However, the deal has its detractors. Supersonic airliners have never made consistent profits or recouped their development costs, and no established aerospace firms are even attempting to build them [3]. Boom is a six-year-old startup headed by a CEO with no prior aerospace experience, who audaciously claims that the Overture airliner will be quieter, cheaper, and more environmentally friendly than older designs. Its functional scale model is five years late [4], and a similar startup abruptly declared bankruptcy after making an analogous deal in Florida last year [5]. Why and how then, did multiple levels of government make such a large and risky investment?   

Comprehensive Rational Model  

The first theory to consider in analyzing these decisions is the Comprehensive Rational Model (CRM). In this plan making conception, actors are assumed to use logic and investigation to define a problem, identify all possible solutions, categorize criteria to evaluate the solutions, judge each solution through the criteria, compare these judgments, and pick the solution that best satisfies the most important criteria. With sufficient care, this method guarantees a utility-maximizing conclusion. However, sufficient care is almost impossible to apply when dealing with complex problems. Analysis takes time and resources — the more factors to consider, the more likely an actor is to cut corners and end up with an inadequate result.  

In this case, the decision making process is obscured by the length of time involved, the number of actors, and a lack of insider sources. From the Governor’s perspective, the problem would likely have been defined as “how can NC be made more prosperous?” All potential answers would then have been considered and judged on various standards, like the potential for growth, cost, and cultural impact. It’s conceivable that all actors involved (who reportedly include every level of government, local universities, business organizations, and Duke Power [6]) collectively went through this convoluted process. But it’s unlikely that such an open-ended query would be answered with such a risky solution, particularly with so many different interest groups.  

Organizational Behavior Model  

A more illuminating theory is the Organizational Behavior Model. In this view, organizations’ actions are largely determined by their standard operating procedures (SOPs). Organizations are made up of many people who will make many different and conflicting decisions. To function as a collective their individual decision making is sublimated into rules and culture, establishing consistency at the expense of flexibility and creativity. “Outputs,” actions and their results, are considered appropriate when they mirror those made in the past rather than based on merit.  

The pursuit of Boom can be partially explained by the SOPs of NC’s government. The Department of Commerce, Economic Development Partnership, and significant portions of the state’s political class have long aimed to build up the aerospace industry. Many investments have been made over the years, including similar incentive packages to attract HondaJet and Spirit Aerosystems. When presented with the goal of “make NC more prosperous,” one of the SOPs is “recruit an aerospace company.” Additionally, there are specific advantages to locating in NC that these organizations promote; low taxes, low wages, quality logistics infrastructure, and a well-developed higher education system [7]. These appeal to particular kinds of companies, which further narrows the potential outcomes. By adhering to their SOPs, stakeholders in NC’s economic development sphere bounded the possible results of their efforts, leading to the recruitment of Boom.  

Stream of Opportunities Model  

There is a third theory of plan making that also explains the choice to incentivize Boom to locate in Guilford; the Stream of Opportunities Model (SOM). In this paradigm, decisions are made through a confluence of four factors – issues, solutions, decision makers, and choice opportunities. Issues are the problems that planning attempts to address. Solutions are the tools that exist to address problems. Decisionmakers are people with the authority to deploy resources and connect solutions to problems. Choice opportunities are situations that allow decision makers to act. All of these factors exist independently, floating in the metaphorical “stream of opportunities.” When plans are made and actualized factors combine without much discernment; what’s available gets used, regardless of its efficacy [8].  

Viewed through the SOM lens the recruitment of Boom makes considerably more sense. The issue of economic development is a core concern of state government – it will always seek to address it. Over the decades a consistent set of solutions has developed; infrastructure investments, tax abatements, and grants are always ready to be applied. PTI was recently expanded and upgraded at great expense through an initiative from the General Assembly, colorfully named “Project Thunderbird [2].” Consequentially the choice opportunity of making planes at PTI was highly attractive since this investment demanded justification. Solutions also aligned for the deal; the HYJDIG offered to Boom was designed by the legislature in 2016 but never used, becoming a hammer in search of nails [9]. And one of the most significant decisionmakers involved in the recruitment process is both a former Commerce Secretary and a consultant at a Raleigh-based firm hired by Boom [10]. The combination of these preexisting factors made the decision to court Boom far more likely, and diminished the possibility of any serious attempt at using CRM.  

The Die is Cast  

Time will tell if NC’s high-risk, high-reward bet on Boom’s prospects will pay off – this summer has seen positive and negative news for the company, including preorders from American Airlines [11] and a falling out with contracted engine designer Rolls Royce [12]. But if NC and its boosters’ move to back the startup does prove successful it will not be the result of calculations and analysis. Rather, it will be due to a combination of inertia, social relationships, and luck. Organizational Behavior filled the Stream of Opportunities, and the serendipity of the stream led to the decision that was made.   

Citations

[1] Associated Press. “Officials: Boom Aims to Build Supersonic Jets in North Carolina.” FOX40. FOX40, January 26, 2022. https://fox40.com/news/business/officials-boom-aims-to-build-supersonic-jets-in-north-carolina/ 

[2] Doyle, Steve. “It’s Official: Boom Supersonic Coming to Piedmont Triad International Airport.” Queen City News. Queen City News, January 26, 2022. https://www.fox46.com/news/u-s/north-carolina/its-official-boom-supersonic-coming-to-piedmont-triad-international-airport/ 

[3] Furchgott, Roy. “Can Supersonic Air Travel Fly Again?” The New York Times. The New York Times, November 1, 2021. https://www.nytimes.com/2021/11/01/business/supersonic-plane-travel-concorde.html 

[4] Craver, R. (2022, January 30). Aviation boom? Hopes high, though skepticism remains, as Triad lands startup aircraft maker Boom Supersonic. Winston-Salem Journal. 

[5] Sheetz, Micheal. “Aerion Supersonic Shuts down, Ending Plans to Build Silent High Speed Business Jets.” CNBC. CNBC, May 21, 2021. https://www.cnbc.com/2021/05/21/aerion-supersonic-shuts-down-ending-plans-for-silent-business-jets.html 

[6] NCDoC. “Governor Cooper Announces Boom Will Manufacture Supersonic Aircraft in North Carolina” NC Commerce, January 26, 2022. https://www.nccommerce.com/news/press-releases/governor-cooper-announces-boom-will-manufacture-supersonic-aircraft-north 

[7] Economic Development Partnership of North Carolina. North Carolina Aerospace Industry. Raleigh, NC: EDPNC, 2019. 

[8] Hopkins, L. D. (2001). Urban Development: The Logic of Making Plans. Washington, DC: Island Press.  

[9] NCDoC. “Job Development Investment Grant (JDIG).” NC Commerce. Accessed February 24, 2022. https://www.nccommerce.com/grants-incentives/competitive-incentives/job-development-investment-grant#special-jdig-grant-categories 

[10] Brooks Pierce, “Brooks Pierce Assists Boom Supersonic in Site Selection for North Carolina Facility.” Brooks Pierce, February 2, 2022. https://www.brookspierce.com/news-brooks-pierce-assists-boom-supersonic-in-site-selection-for-NC-facility. 

[11] American Airlines. (2022, August 16). American Airlines announces agreement to purchase boom supersonic overture aircraft, places deposit on 20 overtures. Newsroom – Home – American Airlines Group, Inc. Retrieved October 6, 2022, from https://news.aa.com/news/news-details/2022/American-Airlines-Announces-Agreement-to-Purchase-Boom-Supersonic-Overture-Aircraft-Places-Deposit-on-20-Overtures-FLT-08/  

[12] Doran, M. (2022, September 9). Rolls-Royce quits boom supersonic airliner engine race. Simple Flying. Retrieved October 6, 2022, from https://simpleflying.com/rolls-royce-quits-boom-supersonic-engine/ 

Henry Read is a Master’s student in the Department of City and Regional Planning, with a focus on land use policy. He is fascinated with the minutia of development regulation and doesn’t understand why so many people think zoning is boring. He hopes to work in the public sector after graduation and would like to be remembered as the guy who got your town to stop requiring bars to have customer parking and start planting native fruit trees in parks. 

Edited by Candela Cerpa 

Featured image: Airport. Photo Credit: Openverse.