July 26, 2016 Defensive Strategy

Volume 9 | Issue 2

Supplying the DOD with components necessary to carry out critical programs McNally Industries has been on the vanguard of its industry, having successfully completed numerous contracts. Lorie Greenspan reports.

McNally Industries is a Small Business with a lot of power, both in brains and, if one looks at machines as modern laborers, brawn. An ISO: 9000-registered business, McNally ranks with the big boys when it comes to supplying critical defense contracts. “I position us as a ‘tweener, a company that falls between having big and small capabilities,” explains Don Erickson, senior vice president of marketing. “We can do reverse engineering and build a complete system with thousands of parts. That’s not something little businesses do. There are not a lot of McNally’s out there; there is a small pool of us. We are experts in engineering and program management.”

The expertise extends back to 1942 when the company was founded as the McNally Brothers Machine and Gear Company by the three McNally brothers. James, Donald and Miles, who developed, grew and operated the business as a defense oriented company from the very beginning. In 1972 McNally was sold to Al Sorenson, who made a strategic decision to purchase the Northern® pump product line rights from FMC (now BAE Systems). This pump product line is almost wholly a commercial customer product.

Then, sold in 1983 to Albert Scheideler, McNally Industries began its metamorphic change, moving from a component manufacturer to a systems manufacturer offering product lines. In the late 1980s McNally began manufacturing nuclear reactor cooling pumps for submarines and aircraft carriers. It also became the sole source supplier to the United States Navy for the Mk6 ammunition handling system that supplies the Mk45 gun and later marketed the system to many countries of the free world.

McNally Industries, Inc. was sold in 2003 to Thomas Brunts and Robert Levine. The company became known as McNally Industries LLC and the new owners have made plans to grow the new company through organic growth and key acquisitions that augment McNally needs. One of these initiatives came in July of 2005 when McNally Industries, LLC purchased the assets of Sun Country Industries of Albuquerque, N.M., which added further strength and capability to the corporation. Sun Country is a key supplier of airframe control assemblies and aircraft engine products to the world’s foremost aerospace manufacturers.
“The new ownership set a whole new direction for us with aggressive growth plans,” Erickson says, adding that the company also launched upon a major renovation in 2005 to its aging manufacturing facility, including a new state-of-the-art technology center, investing $2 million facilities and an additional $800,000 annually in capital equipment.

Delivering the goods
It has been a long and fruitful 60-plus years for McNally but chief among its milestones was its initiative in the early 1980s to focus on DOD systems. Throughout the 1980s and 1990s the company won major contracts including:

• The Mk6 ammunition hoist system for the Mk45 gun, which is utilized on many/most surface combatant ships in the U.S. inventory and many navies of the free world. Initial value of that contract was just over $12 million for 26 systems. “We have since been in continuous production of the Mk6 system and have provided nearly $100M in product worldwide,” Erickson says.

• The Cradle and Rammer system in 1990 for the Mk45 gun through the U.S. Navy. This contract was for 38 systems and valued at nearly $11 million, and had a four-year duration. McNally Industries subsequently delivered ahead of schedule and within our budget.

• Congressionally funded programs in 2003 with the U.S. Army to reverse engineer products for the Army’s aging aviation program. McNally has received these contracts because of its myriad capabilities and services. For starters, McNally provides fully functional systems, which are typically a collection of hundreds of items that are manufactured, purchased and assembled and then tested to ensure they meet customer specifications prior to shipment. The Mk6 ammunition hoist used to load ammunition into the loader drum of the Mk45 five-inch gun and the cradle and ramming system used to load the Mk45 gun are examples of mechanical systems provided.

In addition, McNally Industries’ unique mix of capability in engineering and manufacturing coupled with decades of experience in the defense industry have resulted in many product offerings needed for today’s sailor and soldier. Some examples have included the Phalanx coolant pump that McNally designed from a performance specification for the U.S. Navy.
In the area of hydraulic systems McNally Industries offers pumping products such as its electronic cooling pump for the Phalanx Close In Weapon system, nuclear reactor cooling pumps, pumps for transfer and lubricating, and our specialty ground cart cooling pumps for aircraft electronics.

New product development also has garnered the company numerous contracts in the area of reverse engineering such as the transmission pumps for land combat vehicles as well as hydraulic power supplies for gun turrets. Another area of strength is its long history of manufacturing valve blocks (manifolds), and valve bodies. This product segment builds on McNally’s seven decade heritage of design engineering Northern® pumps to meet the most demanding applications in the industry.
Finally, its precision components segment is comprised of difficult-to-manufacture items that may be made of parent materials that were castings, forgings, weldments, or bar stock. McNally is able to manufacture virtually all ferrous and non-ferrous materials including all stainless steels, k-monel and maraging steel. Tolerances are routinely held to .0001. ”Our typical production range is in quantities of 25 to 250 units,” Erickson says. “Some complex assemblies are in smaller quantities. The primary advances we have made over the recent past have been our ability to integrate systems, design and manufacture products and testing equipment, and now our ability to reverse engineer products to provide complete Technical Data Packages from a finished item. This is particularly relevant in our partnership with another major company where we have a contract with the U.S. Army for reverse engineering aging Army aviation products.”

McNally is also recognized for its Northern® heavy duty gear pumps; popular offerings in this line is the 4000 series pump, made from carbon steel and traditionally designed with a five plate modular construction, best for the majority of applications. There is also the Northern® ECC Series with ceramic liner plates, designed to solve difficult pumping applications, including problems involving low lubricity or abrasive liquids at higher pressures. These pumps are positive displacement rotary gear pumps that are designed for nearly any liquid transfer application, particularly those involving extremes of temperature, viscosity, pressure and inlet conditions. Exceptions for the carbon steel series include liquids containing high concentrations of abrasives, liquids, which have poor lubricity such as water, and liquids that are corrosive. These pumps are built to exacting requirements in nearly every industry, pumping diverse materials such as adhesives, hot polymers, tar, molten sulfur, molten lead, peanut butter, and, of course, petroleum oil based liquids.

Stellar growth
Because of these strengths McNally has long been a leader in precision machining and has held its own despite fluctuations in the industries it serves. “DOD budget ceilings and DOD decisions to fund new programs versus the overhaul and refurbishment programs have impacted our business. But the general economy has a greater impact on our commercial pump product line than it does our DOD business.”

Growth over the past two years has been in the 20 percent range each year, positioning McNally in between the largest DOD prime contractors and the smaller certified Small Businesses. “We often find ourselves competing in the arena of the large DOD ‘primes’ and usually do well in this arena where we can offer large business capability at small business prices,” Erickson says, adding, “We have never failed to complete a contract in 64 years and we believe that we must support our troops with products that work the first time and every time. This philosophy drives us to do superior quality work.”

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