From its humble beginnings as a small machine shop founded during World War II, Heroux-Devtek has expanded into a global leader in the manufacture of aircraft landing gear and other components. William Bunch tells how this well-grounded Canadian company is reaching new heights.
The Canadian-based aerospace specialists at Heroux-Devtek Inc. may be best known as world leaders in designing and manufacturing landing gear for aircraft, but with a recent boost in orders from both military customers and from commercial clients, the company’s business prospects are actually taking off.
The firm, headquartered in the Montreal suburb of Longueuil, was recently named as a key subcontractor to Lockheed-Martin on the world’s largest ongoing military project, the multi-billion-dollar Joint Strike Fighter, the next-generation warplane that will be used by the U.S. Navy, Air Force and Marine Corp. as well as modified for use by defense forces in Canada and other countries.
At the same time, Heroux-Devtek has seen a surge in its order for landing gear and other components for non-military jetliners, includingÿa $125-million, 10-year deal to supply components for Boeing Co.’s intercontinental B-777 jet, the company’s largest commercial contract ever. Because of the surge in new business, the company is expanding its Kitchener, Ontario plant, both with a $12 million, 27,000-square-foot addition and by hiring new employees. Jean Gravel, the vice president for sales and marketing for Heroux-Devtek, said he does not believe that the company’s recent growth spurt is an accident. He said a decision roughly five years ago to place an emphasis on design and on engineering innovation is paying off.
Discovering the wind
“We’ve invested in engineering and we’ve gone from five engineers to more than 40, and so we’re very strong in that area, in working on landing gear design” Gravel said. He said that new engineering teams are working with more expensive but lighter materials in order to upgrade landing gear designs, and testing out these products in a new qualifications lab.
At the same time, Heroux-Devtek has also not put all of the company’s business eggs into one basket. The company has also seen growth in some promising areas outside of its traditional base in aviation and in aerospace, including involvement in the wind power industry that began roughly two years ago, making wind turbine pieces for GE Power Systems. Gravel said there has always been a focus at Heroux-Devtek on having a diverse customer base, both within the aviation world and now with other industrial customers. “Right now I’d probably say that our aviation business is about 60 percent military and 40 percent commercial; we have a good mix,” he said. “That has always been the strategy, to protect against fluctuations, and the same is true with our customers. We try to not depend on just one.”
Ironically, the company has grown to become one of the three or four major players in the landing-gear world from very humble beginnings. When the company began in Longueuil in 1942 at the height of World War II, it was essentially a small machine shop making parts for government and military contractors with parts for guns and heavier artillery, increasingly reliant on aviation in the 1950s. It was in 1960 that Heroux-Devtek, initially known as Heroux, changed the direction of the firm by marketing landing gear.
First on the moon
“We started with the war effort but went into landing gear for commercial contractors,” Gravel explained. By the late 1960s, Heroux-Devtek scored a coup that company officials are still talking about to this day, when the company in the late 1960s manufactured the landing gear that successfully deployed on the first American lunar module.
“We always say to our friends down south (in America) that we manufactured the very first product to touch the moon,” Gravel said. In fact, over the years, Heroux-Devtek has forged very close ties with the United States that has allowed it to win a number of military contracts, even though typically American-based companies receive preference for such work. In the 1970s, it was Heroux-Devtek that was selected by the U.S. Air Force to repair the landing gear for its fleet of heavy-duty C-130 transport carriers, a milestone in the
The company’s ownership also changed hands several times during this period. From 1973 through 1985, the firm was owned by the Canadian industrial giant Bombardier, but in 1985 it was bought back by two top executives of the company, who then held a public stock offering one year later. The company’s shares are still traded on the Toronto Stock Exchange.
In the meantime, Heroux-Devtek, which took that name when it acquired the Toronto-based Devtek Corporation in 2000, has grown dramatically during a long era of expansion and acquisitions. One of the most important of these came in 1987 with the acquisition of McSwain Manufacturing Corporation, which was located in Cincinnati, Ohio, and specialized in the manufacturing and sale of high-precision machined parts for the power generation, heavy machinery and aerospace industries.
This would lead to the creation of one of the company’s key units, the gas turbine components division, which is still based in Cincinnati in two buildings that cover 117,000 square feet and involve technologies such as precision machining, welding, fabrication and assembly.
Sales are taking off
In 2004, the firm announced the acquisition of Progressive Inc., a Texas-based manufacturer of large components to military aircraft makers. This is the cornerstone of a second unit, the aerostructure division, which includes not only Progressive but also an airframe structural plant located in Dorval, Quebec. A third site, Magtron, specializes in the production of hi-tech enclosures and cabinets for the protection of sensitive aeronautical equipment.However, the landing gear unit is still the largest, employing some 800 people at four facilities that are scattered across Quebec and Ontario. Although most of the company’s 1,200 jobs and its 11 factories are still located in Canada, some 70 percent of sales are outside the country, most to the United States. The company’s most recently announced sales figures not only show that Heroux-Devtek is profitable but that the firm was on track for about $250 million in annual sales.
Gravel said that the need to grow by competing for major U.S. military contracts has meant that the company has had to stay in top competitive shape, because of some of the built-in disadvantages of competing against American-based companies. “A lot of times it will take six months just to have all of the agreements in place that we need just to exchange information,” he explained.
Now, the company plans to grow through its upgraded engineering, and through offering more complete landing gear assemblies. Heroux-Devtek is a company that put wheels on the ground, but keeps reaching for the stars.