This time last year, newly restructured Sargent Aerospace & Defense was busily expanding its component-making facilities in anticipation of a full-blown industry recovery in the second half of this year. Preparing to depart for this week’s Paris Air Show, the U.S. group’s president Scott Still said this trend has since been deferred by what he estimates to be six to nine months, but he has no regrets about getting his company in growth mode and is already reaping the benefits of an investment totaling some $20 million.
In August, Sargent expects to open its new 70,000-sq-ft facility in Tucson, Arizona–more than doubling the size of its headquarters. Production equipment is being installed next month and work is already under way to transfer activities from the company’s other factories in California. Overall, employment at the site is targeted to grow by around 100, with 30 jobs added so far and up to another 40 anticipated in the first half of next year. In addition to existing in-production aircraft, Sargent is gearing up for its contributions to Boeing’s new 787 widebody and the Airbus A350XWB, as well as Lockheed Martin’s F-35 fighter.
Despite the slow-than-expected recovery, Still told AIN that airframers are already ramping up production and there is an increasingly prevalent view that some tier-two suppliers have not been able to make the necessary investments to be ready to boost output. “Ramp-up rates look like [they will be] 30 to 40 percent above current levels,” he said. “Some suppliers could be in trouble [in terms of lack of preparedness]. Some are going to fall down and we could capitalize on that.”
Another issue facing tier-two suppliers is the growing desire of their tier-one masters to commit them to lock in prices for contracts running as long as 10 to 15 years. This is in the context of rising raw material costs that have seen increases as high as 15 percent since 2009. Sargent has endeavored to protect itself through some material price hedging through 2012, but Still acknowledged that this is a hard calculation to get right and spells risk for him and his rivals.
Sargent has a growing appetite of its own to increase its position on the global aerospace stage. After recruiting as its new vice president for aftermarket services Kevin Connelly, who has experience in the Asia Pacific region, the company has opened a sales and business development office in Singapore and is quickly realizing the opportunities now at its feet. It is also handling some customer support out of Singapore and will soon place space inventory there. The next step is a study that could lead to the establishment of a facility for manufacturing and repair and overhaul work in China, most likely close to Shanghai.
On the technology front, investment has also been made in developing new high-velocity oxygen fuel (HVOF) spray and shot-peen processes. This has great potential both to increase production rates, and also to serve as an environmentally friendly alternative to traditional chrome plating, which is fast going out of favor in the aerospace sector.
The processes are just being started at Sargent’s Torrance, California factory, where it makes various fasteners and bearings. Following imminent approval by Boeing, Messier Dowty and manufacturing standards group Nadcap, HVOF should be ready for full production in August. Still said the new approach could save three to six weeks for producing components for the 787 and A350, and he intends to extend its use to Tucson.
Sargent also is in the final stages of bringing its new Kahr bearing liner for helicopters to market. “This should be ready for flight testing in the early part of the fourth quarter [of 2011] and it is performing better than we had thought [in ground tests],” said Still.
The company also is seeing sustained recovery in its aftermarket business. Its focus here is to seek out high-value, niche overhaul and repair tasks in areas such as bearings, fasteners and engine rings for aircraft such as A320s, 737s and 777s now approaching the end of their warranty periods.
It is also getting more involved in making PMA parts. In March, Sargent announced plans to acquire more than 1,200 Boeing 737 line-replaceable units valued at $4 million and it now intends to branch out into other aircraft families.