Aerospace Work Here Could Get Big Boost

June 29, 2008
| By Pete Daly |
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WASHINGTON, D.C. — A decision by the federal Government Accountability Office to re-open the bid process for a $40 billion contract to produce in-flight refueling tanker aircraft for the United States Air Force has revived hope among aerospace manufacturers in Michigan.

"This is a great victory for taxpayers in Michigan and across the country," Michigan House Speaker Pro Tempore Michael G. Sak, D-Grand Rapids, said last week. "The Air Force now has the opportunity to re-examine their decision and choose an American company that already has a significant presence in our state."

He was referring to The Boeing Co., which is supplied by a number of manufacturing firms in Michigan, including some in West Michigan.

Boeing filed an official protest in March over the Air Force decision in February to select the partnership of Northrup Grumman/EADS for the contract to build a tanker. The Northrup tanker, designated KC-45, is based on the A330 airliner, which is made in Europe by Airbus. EADS — European Aeronautic Defence & Space — is the parent company of Airbus.

According to the Northrup Grumman Web site, the KC-45 would be assembled in Mobile, Ala., with overall involvement of 48,000 American workers at 230 U.S. companies in 49 states. However, according to Craig Wolff, vice president of the Michigan Aerospace Manufacturers Association, "The majority of (the work) would be done in France."

Boeing's proposed tanker, the KC-767, is based on the Boeing 767 airliner, which is made in the U.S.

The GAO, which is the investigative arm of Congress charged with examining matters relating to the receipt and payment of public funds, recommended June 18 that the Air Force re-open its bidding process for the contract, citing numerous errors in the procedures followed by the Air Force.

According to a statement released by Sak, Grand Rapids and Kent County are home to a large number of Boeing's suppliers. Sak said that if Boeing is ultimately awarded the contract, it would create "hundreds" of new jobs in Michigan and add to the $500 million worth of Michigan-made products Boeing buys each year.

The GAO decision to uphold the Boeing protest is "a very substantial victory" for aerospace workers in the U.S., including Michigan, according to Wolff. He said if Boeing is ultimately awarded the contract, it would create thousands of high-paying manufacturing jobs in the U.S.

A local company, Detail Technologies in Wyoming, has manufactured parts supplied to Boeing through Odyssey Industries in southeast Michigan. If Boeing ultimately gets the Air Force tanker contract and involves Odyssey, as expected, "We'd definitely be growing our business," said Bryan Herrington, president of Detail Technologies.

He said Detail Technologies is an injection moldings supplier to the auto industry but has been doing aerospace manufacturing for about a year and a half to make up for the decline in automotive orders.

Prior to the aerospace orders, "We were at the point where we were going to downsize if we didn’t do something different," said George Andrade, aerospace sales engineer at Detail Technologies.

The company currently has 72 employees and sales were about $9 million last year, compared to about $7.5 million in 2006.

The Michigan Aerospace Manufacturers Association is a nonprofit business organization formed last year to represent the interests of Michigan's aerospace manufacturing firms with a unified voice, while providing member companies with educational programs and aerospace industry research. Currently, 24 companies across the state are members of MAMA.

One of the nation's most important production sites for the aerospace industry is Alcoa Howmet in Whitehall, where parts for jet engines is the primary business. The plant was in aerospace long before MAMA was founded, however, and its parts are used by both Boeing and Northrup Grumman.

"We actually have parts on every jet, literally, in the Free World," said Howmet spokesperson Amy Heisser.

"The largest single location of the aerospace plants for all of Alcoa is in Whitehall, Michigan," said Heisser. "It's about twenty-seven hundred folks who are focused on aerospace," producing jet turbine blades and titanium structural castings.

Alcoa Howmet supplies the companies that make jet engines, including General Electric and Pratt & Whitney.

Heisser said when it comes to jet engine parts, Alcoa Howmet is one of the "big two." The other company is Precision Castparts, based in Portland, Ore.

The business of MAMA is "landing purchase orders" for companies that are new to the aerospace industry, said Wolff. He said MAMA maintains direct contact with major aerospace companies, both in the U.S. and abroad.

"We have been landing millions of dollars worth of work for our members," added Wolff.

Last week MAMA announced that Imperial Metal Products in Grand Rapids was awarded its first aerospace industry contract, worth more than $1 million over four years. The contract with a major aerospace supplier is for production of millions of fasteners for both military and commercial aircraft. Due to confidentiality agreements, Imperial and MAMA cannot identify the company.

"As a member of MAMA, we were able to accelerate marketing our capabilities to an industry untapped by Imperial," said Erik Denslow, Imperial’s vice president and general manager.

Imperial was founded in 1914 and currently has about 60 employees. Denslow said the company's success in landing the aerospace contract is due to its long-standing technical expertise and track record as a precision machining company.

The company does “a lot" of work in motor vehicle markets, which are not limited to passenger cars and trucks, according to Denslow. Some work is for the Department of Defense, which could include combat vehicles for the military.

Although Denslow was not at liberty to comment on any business that might come to Imperial if Boeing wins the contract for the Air Force tanker, he said it would "be an opportunity for MAMA to try to have more work awarded to Michigan companies."

Wolff, who has spent time in Washington lately seeking aerospace contracts for Michigan manufacturers, according to Sak, "has been very involved in aerospace. He's been a big supporter of our association." He also praised the efforts of Sen. Mark Jansen, R-Grand Rapids, and Rep. Richard E. Hammel, D-Mt. Morris Township.

The Michigan Legislature appropriated $500,000 in the current budget to help manufacturers in Michigan — particularly automotive suppliers — qualify for and win contracts in the aerospace industry. That included $250,000 to MAMA to organize and promote aerospace manufacturing in Michigan, plus another $250,000 to help qualified Michigan manufacturers achieve AS9100 Certification, which has been adopted as the quality standard for the aerospace industry.

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