North Carolina views defense industry as key growth area

• That included prominent wins like a Toyota battery plant, but also ones that have not yet fully materialized, like Wolfspeed and VinFast, or didn't happen at all, like Natron Energy.

What they're saying: Chris Chung, head of the Economic Development Partnership of North Carolina, said since the Trump administration began, it has seen an uptick in activity from defense-related companies and energy companies.

• "You definitely have to account for changes in who's in control of the White House and Congress," Chung said of recruiting companies to North Carolina. "And compared to most of my 30 years in this business, the impact of federal policy in the form of companies looking for new locations has been more pronounced over the past six years."
• Lee Lilley, North Carolina's Commerce Secretary, added that innovation in the defense space is driving new investments across the country. At the same time, there are just more global conflicts happening, which is driving demand from militaries across the world.

The big picture: Even before war began with Iran, Trump has pushed for increased military spending.

• He's proposed $1.5 trillion in defense spending in 2027, a 44% increase, though that budget request will ultimately be in the hands of Congress.

Between the lines: One of Trump's policy changes — a move to shore up the production of rare-earth magnets away from China — has already brought jobs to North Carolina.

• The Trump administration's decision to take a stake in the rare-earth magnet maker Vulcan Elements as well as funding from the Department of War led to a pledge for 1,000 jobs in Johnston County.

The state was also in contention for a 4,000-job expansion from Anduril, an autonomous defense tech company that has benefited greatly from defense contracts.

• The company has a subsidiary, Blue Force Technologies, based in the Triangle but ultimately picked Ohio over North Carolina.

Zoom in: Chung said the state recruits defense-related companies like it would any other industry, especially because many companies serve both the military and civilian customers.

• That's especially true in aerospace, where companies that have recently expanded in the state, like Pratt & Whitney and GE Aerospace, make parts that end up in both commercial aircraft and military jets.

• Pratt & Whitney, which announced more than 300 new jobs last year in Asheville, makes engines for F-35 Lighting II fighter jets.

State of play: But one area the state hopes to stand out is its large military presence, with more than 100,000 service members stationed in North Carolina, from Fort Bragg to Camp Lejeune and others.

• Every year, Chung said, 20,000 service members in the state transition out of the military and into the workforce.
• "These are companies that still care about workforce, infrastructure, logistical considerations and tax rates, so 90% of the pitch doesn't look all that different from a company that has nothing to do with defense industry," Chung said.
• Though having members of Congress in the right committees can be influential on defense spending, he noted.

What we're watching: State and education officials are hopeful that a new institute at N.C. State could also land more defense dollars in the coming years.

• The university's new "defense and security" institute was launched in December but is still in its initial stages of development.
• The hope is that the institute will be instrumental in significantly increasing the $49 million in annual funding the university receives from the War Department.