Aerospace in America: Observations

Manufacturing Engineering, Dec 2006 by Hughes, Terry

I began working in the aerospace industry after college in the early 1970s. My first jobs involved tool design for numerous disciplines including sheetmetal, tube bending, turning, milling, and welding. I hopped from job to job, because the only thing any employer had as a retention tool was salary, and if a shop down the street paid eight dollars a month more, I was gone. For the most part, retirement, insurance, 401Ks, and profit sharing were still a few years away for the smaller companies.

My job hopping continued until the late 1970s, when I landed in a company that had not only insurance, but profit sharing and a retirement plan. It was a small company, with less than $50 million/year in sales, but it had a worldwide customer base, and management routinely invested in new technology whether machinery, software, or special processes. They had an excellent reputation for their turbine products, and their growth had remained constant at 15% for a number of years before I joined them.

I was home.

Two years later, I was looking for work again because the company had been sold to British investors, and they elected to move all the manufacturing to a third-world country, retaining none of the American talent. My first exposure to "Offshore" was painful.

I was soon hired by another small company that also had an excellent reputation in aerospace. We specialized in airfoils, vanes, nozzles, and the newly emerging five-axis impeller business. We expanded, reinvested, expanded some more, and by the mid-1980s were the world's largest supplier of OEM blades, nozzles, vanes, disks, and impellers.

Then the sole owner died, and we were acquired by a large corporation that treated us as a cash cow, providing less than 0.3% reinvestment in 10 years. They sold us to a giant corporation that reinvested less than 0.2% over the next 10 years. We quickly lost market share.

Working in my tiny division of the giant corporation was frequently disheartening, and at times truly depressing. We went through division presidents, plant managers, quality managers, and engineering managers at approximately the same rate fast-food places go through teenagers at the third window.

The giant corporation had us sending hardware all over the planet for machining. And even though the work was done at a price we couldn't match, the hidden costs of poor quality, late delivery, and high scrap rates soon brought it back to be produced on our outdated, tired, basically thrashed machines. Presidents, plant managers, and other managers began to regularly cycle through, as the lofty goals set by corporate weren't met in spite of "generous" reinvestment plans.

In the engineering department, we finally arrived at the realization that, love the manager, hate the manager, it made no difference. Because in a few months they'd be gone. We soon deduced that one of our most important jobs was try to help our executive migrant workers make good decisions that we could live with after they were gone, decisions that would not leave us encumbered with some new system, policy, or strategy that the current best seller claimed was the end-all be-all shining star of the future.

As each new plant manager became acquainted with our capability and capacity, his or her goals rapidly shifted from regaining our group's place as a world leader to getting through the month and keeping the job for 30 more days.

Engineers began to come and go at a rate that closely resembled the '70s.

Somewhere in the American manufacturing model, the percentage of reinvestment required to grow was replaced by the amount that guarantees failure, and few have noticed the change. (I suspect all the freshly minted MBAs of the '90s conspired to change it, and now it's accepted as gospel.) My giant corporation, as well as lots of other corporations, labored under the misconception that an MBA is an MBA, and it doesn't make one bit of difference what the business is. Business is business, and there's no difference, so plant managers, division presidents, etc. all need only be MBAs. Manufacturing experience, much less any experience in aerospace, isn't important.

As for me, I've discovered a little company with an excellent aerospace reputation, stellar growth, and a huge reinvestment program. It's owned by an engineer and run by engineers, and the bodies of all the MBAs who applied for jobs are buried out back.

I think I'm going to like it here.

Terry Hughes

MANUFACTURING ENGINEERING

SYSTEMS 3 INC.

TEMPE, AZ

THUGHES@SYSTEMS3.NET