February •  March 2007 • Vol. XXV No. 3 • An Arnold Publication

Industry  News • Executive Hotline

Executive Hotline

Raytheon Tucson Benefits from $60 Million in International Contracts

Raytheon Co.’s missile division in Tucson will benefit from $60 million in international contracts for support services. Raytheon announced recently two contracts to perform support services for the Standard Missile-1 program. One of the contracts, valued at $29 million, includes missile assembly, testing and delivery for the governments of Spain and Egypt. The second contract, valued at $31.8 million, includes regraining of rocket motors and missile assembly, testing and delivery for France, Japan, Turkey, Bahrain, Poland, Italy and Chile. the missile support work will be performed in Tucson, Camden, Ark., and Sacramento, Calif. SM-1 is a medium-to-long range fleet-defense missile used on naval ships.

Boeing Reports 1,044 Commercial Jet Orders for 2006

Boeing set a new record for commercial airplane orders in 2006. The company booked 1,044 orders, up from 1,002 a year ago. It has likely regained the lead in orders from Airbus, its European rival. 

Precision Castparts to Acquire California Manufacturer

Precision Castparts Corp. will acquire Cherry Aerospace LLC for $300 million in cash, the companies announced. Portland-based Precision Castparts will purchase the company from Acument Global Technologies Inc. The deal is expected to close in the fourth quarter of fiscal 2007, or by the end of March. Precision Castparts makes complex metal components for the aerospace industry. Santa Ana, Calif.-based Cherry Aerospace employs 500 and manufacturers rivets and bolts for the aerospace industry. Precision Castparts will finance the acquisition with cash and existing credit facilities. The deal will be immediately accretive to earnings. It is subject to regulatory approvals. 

Lockheed Awarded $654.9M Navy Contract

Defense contractor Lockheed Martin Corp. has been awarded a $654.9 million U.S. Navy contract for work on ballistic missile programs. The work will be performed by Lockheed Martin Space Systems Co. in several California cities, Georgia, Washington, Tennessee, Virginia, Utah and Cape Canaveral, and is schedule to be completed in 2010.

TransDigm Acquiring Aviation Technologies

TransDigm Group Inc., a manufacturer of aircraft components, has announced its acquisition of Aviation Technologies Inc. (ATI), a supplier of aerospace products, for about $430 million. The transaction is expected to be completed within the next 60 days. ATI, headquartered in Seattle, Wash., has two primary operating units that service the commercial and military aerospace markets – Avtech and ADS/Transicoil. Avtech makes flight deck and passenger audio systems, cabin lighting, and power control products and related components. ADS/Transicoil manufactures displays, clocks, brushless motors, and related components and instruments.

Parker Hannifin Orders up Six  Percent in December

Diversified manufacturer Parker Hannifin said its total orders in December grew by six percent versus a year ago, helped by a strong performance in its international and aerospace divisions. The company said orders in its Industrial International segment jumped by 17 percent in December, while its Aerospace segment posted an increase of 10 percent, on a rolling 12-month average basis. The company’s Climate and Industrial Controls business saw orders decrease by one percent from a year ago, and Industrial North America saw a two-percent decline in orders.

Wells Fargo Survey Finds Small Business Owners Optimistic

The Wells Fargo/Gallup fourth-quarter survey of small business owners finds them the most optimistic in four years.

“While many economists are forecasting a weaker economic environment for 2007, small business owners are, according to the results, expressing no signs of an economic downturn,” said Scott Anderson, senior economist for the San Francisco bank. “These optimistic findings indicate expectations for a rebound in activity this year, as the forces that have been inhibiting growth prospects — such as rising energy prices and interest rates, and stagnant wage growth — reverse course.”

The index set a record high of 114, up four points from the third quarter. The quarterly index is calculated based on a nationwide survey of about 600 small business owners conducted by the Gallup Organization and sponsored by Wells Fargo & Co.

Northrop Grumman Opens  Facility for High-Energy Laser Production and Systems Integration

Experts at Northrop Grumman Corp.  opened a specialized facility for systems integration and production of high-energy laser systems for military uses. Located at the Space Technology sector’s Space Park campus in Redondo Beach, Calif., the Directed Energy Production Facility is for the production of high-energy, solid-state lasers and their integration onto military vehicles.

The first work in the facility will be for Phase 3 of the Joint High-Power Solid State Laser (JHPSSL) program, which will build and demonstrate the first 100-kilowatt solid-state laser for battlefield and precision strike missions. The facility will provide the capability to produce current- and future-generation technologies of lasers including fiber lasers even more powerful than 100 kilowatts. There will also be an integration area where electric lasers are integrated onto various military platforms, such as armored combat vehicles. With class 1,000 clean rooms and integrated laser safety systems, the facility can produce several laser systems at the same time

Cubic Awarded $24.2 Million in Contracts for Small Arms and Other Defense Training Systems

The defense segment of Cubic Corporation in San Diego Ca. has received in excess of $24 million in contracts for its Engagement Skills Trainer 2000 (EST 2000) training system and other defense training systems. The U.S. Army Program Executive Office, Simulation Training and Instrumentation Command (PEO STRI) ordered the EST 2000 systems.

U.S. Data Shows More Strength

The Commerce Department said recently that manufacturing orders for big ticket items surged in December, adding to the preponderance of evidence that the Federal Reserve will not be reducing interest rates anytime soon. For the month, orders for durable goods — manufactured items meant to last at least three years — rose by 3.1%, or $6.7 billion, to $221.9 billion, adjusted for seasonality, the largest increase since September. A major reason: commercial aircraft orders. Thanks to a large number of 212 plane orders that Boeing  recorded during December, commercial aircraft orders skyrocketed by 26.5%. Boeing has been picking up business at the expense of its troubled European rival, Airbus.

Boeing, Lockheed Vying for A-10 Work Air Force Contract Worth $1.5 Billion

Lockheed Martin Corp. and The Boeing Co., the top two U.S. military contractors, are competing for an Air Force program valued at $1.5 billion to replace cracking wings on aging A-10 anti-tank aircraft. The contract, which calls for new wing sets on about 200 planes, would be awarded over 10 years. The Air Force plans to select a winner around March, Boeing spokeswoman Madonna Walsh said. Boeing and Lockheed submitted their bids Jan. 17. Both companies are looking to upgrades and modernization of aging military aircraft to keep military revenue growing as the Pentagon tightens spending on new, more expensive airplanes. Lockheed, already has a contract valued at more than $2 billion that it won in 1997 to upgrade A-10 aircraft and install new cockpit electronics, Caires said. Lockheed is bidding for the wing work with Los Angeles-based Northrop Grumman Corp.

L.A. Aerospace Firm Building Facility in Mesa, Hiring 200

A Los Angeles aerospace company is buying land in the East Valley to build a production facility that could have as many as 200 workers. Dukes Aerospace Inc. soon will acquire more than 10 acres near Williams Gateway Airport and the General Motors Proving Ground in Mesa. The company, based in Northridge in L.A.’s San Fernando Valley, wants to build a 50,000-square-foot manufacturing facility on that site for its GST Industries subsidiary, said Dukes Vice President Bill Greer. GST and Dukes manufacture aerospace and aviation parts, including air valves, cabin-pressure parts and operating systems, landing gear and steering controls, and other mechanical components. The companies sell parts to commercial aviation manufacturers as well as defense contractors. Greer said the aerospace plant is slated to be built and operational in 2008 and, if things go well, more buildings may be added to accommodate up to 200 employees. He said the East Valley’s aerospace and aviation sector attracted the company to the Valley suburb.

“There’s a real good labor pool to tap into,” Greer said.

The company currently has 20 workers at a leased facility near Falcon Field in Mesa and another 155 in the Los Angeles area. Dukes acquired GST in 2005 and moved its Redondo Beach, Calif., unit to Mesa.

Ceradyne Gets $113M Army Order

Ceradyne Inc., in Costa Mesa Ca. a maker of ceramic armor for military helicopters and soldiers, said on in late January it won a $113 million order from the Army to deliver ceramic body armor. The company is scheduled to begin shipping the so-called “protective inserts” to Maryland-based Aberdeen Proving Ground starting in April and complete delivery in September.Ceradyne will perform the work at its Lexington, Ky., facility and its Costa Mesa and Irvine, Calif, plants.

NASA Issues Teledyne a Contract Option to Deliver Additional PEM Fuel Cell System

Teledyne Technologies Inc., in Los Angeles, Ca. has received an option award, under its NASA proton exchange membrane (PEM) fuel cell development contract, to construct and test a 300-watt PEM fuel cell system. NASA’s Glenn Research Center issued a $1.5 million contract option as part of an ongoing development of fuel cell power plants for space applications.  

QPC Lasers announces partnership with Northrop Grumman Space Technology at Photonics West

 QPC Lasers Inc., parent of Quintessence Photonics Corporation, has partnered with Northrop Grumman Space Technology Cutting Edge Optronics for integration of QPC’s high-power semiconductor lasers. The integrated lasers include QPC’s proprietary BrightLase and Internal Grating semiconductor laser technology and expand QPC’s product line to include high-power water-cooled laser modules and turnkey systems.

Industry News

Selway Machine Tool Named Toyoda International Distributor Of The Year

Selway Machine Tool, the west coast distributor for Toyoda Machinery, was recently named  International Distributor of the Year by JTEKT, Toyoda’s parent company. Selway  Machine  Tool competed for this award globally, surpassing 23 other U.S. Toyoda distributors, and a total of 60 companies worldwide.

The award was presented at JTEKT’s annual Techical Fair. Every year, groups of existing and  prospective customers from around the world are invited to tour the company’s manufacturing facilities in Japan. It gives them an opportunity to see first-hand how the machines are built,  and learn about the production and quality systems that contribute to improved machine performance.

“Receiving this award was very humbling,” says Selway Machine Tool President, Bill Selway.  “It reinforces why we dedicate so much time to customer education and training. Our success hinges on our customers’ continued search for better productivity, and the consistently-reliable  products that Toyoda Machinery brings to the market.”

“Selway continues to deliver top sales and maintain superior levels of customer loyalty,” explains  Toyoda’s VP of Sales, Dan Stapula. “The company has been a long-standing presence on the west coast, and is recognized for its exceptional customer service. Selway has been able to satisfy a high demand from the booming aerospace industry with Toyoda’s single- and multiple-level RGVs, matrix magazine  technology, and machine availability.”

Index Appoints Ayres Western Regional Sales Manager

 Bob Ayres has been appointed Regional sales manager for the west coast for Index Corporation.  Andre Bettuz, who preceded Bob, will return to the corporate headquarters  and become inside sales  manager, according to Olaf  Tessarzyk, Index Corp. chairman and CEO.

Bob moves to Index from Bucci Industries where he was the west coast regional sales manager for Iemca Bar Feed Systems.  Bob has also worked as a sales manager for DMG and Lagun Machine Tools.

“With his experience and knowledge of the region, we are confident Bob will do an excellent job  representing Index and supporting customers on the West Coast,” Mr. Tessarzyk said.

Haas Automation Records Best Year Ever

Haas Automation, Inc. of Oxnard, California reports that 2006 was the most productive year in the company’s history, with CNC machine tool production of more than 12,500 units – up almost 25% over 2005 – and a nearly 30% increase in revenues to more than $740 million. The 2006 numbers reinforce Haas Automation’s position as the largest unit-volume builder of CNC machine tools in the world, and the largest dollar-volume builder in North America.

All Haas products are built in the company’s 1-million-square-foot manufacturing facility in Southern California. They are distributed worldwide through a global network of Haas Factory Outlets (HFOs).  In 2006, Haas opened 20 new HFOs, primarily in international markets; the company plans to open another 30 HFOs worldwide in 2007.

Haas General Manager Bob Murray states that, “The HFO concept – providing customers (wherever they are) with local access to Haas products, sales, replacement parts and factory-trained service personnel – is one of the driving forces behind Haas’ global success. We had a very, very good year,” he adds.

Walter USA Announces New National Sales Manager

Walter USA announced the appointment of Brett A. Wharton to the position of National Sales  Manager for the Walter product line effective December 4, 2006.  Brett comes to Walter USA with  extensive sales experience in the industrial market place, particularly in the metal working environment Brett has held sales and sales management positions in a variety of companies in our industry and most recently he was the senior global key account manager for Kennametal Inc. He holds a BS Degree in Industrial

Technology from the University of Wyoming and is a member of the Society of Manufacturing Engineers.

New Dates Announced for the 2007 Northwest and Pacific Coast Machine Tool Expos

Cygnus Expositions, the tradeshow division of  Cygnus Business Media, has announced that the 2007 Northwest Machine Tool Expo will be held May 16-17, 2007 at the Oregon Convention Center in Portland, Oregon, and the 2007 Pacific Coast Machine Tool Expo will be held November 13-15, 2007 at the Santa Clara Convention Center in Santa Clara, California. Both events are sponsored by the American Machine Tool Distributors’ Association (AMTDA).

“We are pleased to once again offer these biennial shows for the machine tool industry,” says Joyce Lortz, Show Director. “This year should mark the third consecutive year of increases in machine tool consumption. With the continued strength of aerospace and demand for high-tech machine tools for medical equipment, the west coast market is poised for growth. Both the Northwest and the Pacific Coast Machine Tool Expos are uniquely positioned to help both buyers and sellers capitalize on this growth.”

The Northwest Machine Tool Expo is being held in conjunction with the 17th annual Northwest Facilities Expo, while the Pacific Coast Machine Tool Expo will be a three day event running on its own. Both Machine Tool Expos will feature the industry’s leading companies showcasing the latest products and services, including metalcutting & metalforming machines, measuring equipment, EDM, tooling CAD/CAM, lasers, cutting tools, drilling, finishing, and other manufacturing and industrial products.

Each Machine Tool Expo will feature a free, comprehensive conference program offering the industry’s latest applications and innovations. The scope of each conference is designed to attract high-level decision makers in machine tools, manufacturing, and design engineering. Attendees include design engineers, machinists, top-level management, production managers, facilities and maintenance personnel, and other professionals.

So. Cal. Machine Tools will be exclusively servicing and selling in southern California and  southern Nevada top quality American engineered CNC turning centers, vertical machining centers, VTLs and drill tap centers from AMERA-SEIKI. Also, So. Cal. will represent top Japanese builder Takamaz on its wide range of CNC turning centers.

Steven Hetland who has nearly 30 years of experience in the machine tool industry has also joined Team So. Cal. who will be covering Orange County as So.Cal’s Product Consultant.

Delcam Consolidates North American sales

Delcam has consolidated its structure in North America to create a single sales organization for its Power Solution and FeatureCAM product ranges Glenn McMinn has been appointed President, Delcam North America.  In his new position, Glenn will be responsible for coordinating the activities and overall management of the combined North American sales and support teams.

The PartMaker CAM range will continue to be sold and supported world-wide from the established Pennsylvania base.  With its specialist focus on systems for Swiss-type lathes, Delcam believes that this range needs a dedicated team of engineers, both to service its growing number of North American customers and to support its expanded distribution across the company’s global reseller network.

“We have a great deal of talent in North America and we want to make the most of our resources, expand our business opportunities and provide the best possible service to our customers,” explained Delcam’s Managing Director, Hugh Humphreys.  “I believe that there will be significant benefits in having a combined sales and support organization to make full use of the complimentary skills and experience in our Windsor and Salt Lake City offices.  Administratively, it is much easier to share these skills if we have a combined operation.”