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Despite modest layoff, Goodrich solid

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By ANDY KIRKALDY
VERGENNES — Although Goodrich Corp. in May laid off 11 non-technical workers from its Vergennes plant, a move a corporate executive called painful, the overall news for the largest employer in Vergennes and its parent company appears far from bleak.

Goodrich’s first-quarter corporate report for 2009, published in April, forecast a drop of just 2 or 3 percent in annual sales from 2008, from $7.1 billion to about $6.9 billion.

And even after the May layoffs, the workforce in the Goodrich’s Vergennes plant, the second largest in its Sensors and Integrated Systems division, remains at about 800, up from roughly 700 four years ago. The pre-layoff employee count was the highest since the early 1990s.

Still, Sol Mirelez, marketing communications manager of Goodrich’s Sensors and Integrated Systems division, said even the relatively small job cut from several departments, including finance and purchasing, was difficult to make.

“When our business turns down, reductions in workforce are one of the last options we exercise. Layoffs affect people and they affect livelihoods,” he said. “They’re tough decisions, but necessary ones to keep the business solid.”

Mirelez, who works for the Sensors division in Burnside, Minn., said although not all is gloomy, management of the high-tech aerospace manufacturing and engineering firm remains realistic about the less-than-booming economy.

“The business climate is still the same,” he said. “The bottom line with our business is we’re being cautious. We’ve been impacted by the downturn in the economy, but certainly not as much as some of our peers.”

DIVERSITY
Executives of Goodrich, which overall employs 25,000 at 80 sites in 16 countries, are also confident their company is well positioned to remain successful. Profits for 2009, as expressed on a price-per-share of Goodrich stock, are forecast to fall slightly to $4.50-$4.75 per share from the previous forecast of $4.50-$4.90 per share.

Mirelez pointed to the fact that the Sensors and Integrated Systems division, which is one of 10 divisions in the company’s corporate umbrella, serves both the military and commercial sectors. To those sectors, Goodrich provides new equipment and spare parts, and offers repairs, modernization and retrofitting of existing aircraft and equipment.

“It’s a very diverse business both in the markets ... and in the balance within these markets,” Mirelez said.

According to information provided by Mirelez, the Sensors division employs 3,000 in a dozen sites, of which Vergennes is the second largest. The division offers 45 major product lines that include 6,000 models.

Mirelez called the division a strong performer within Goodrich, and Vergennes is critical within the division.

“The Vergennes plant is a very important part of the Sensors and Integrated Systems business, and the Sensors and Integrated Systems business has been a very strong and solid contributor to the overall Goodrich business,” he said.

A number of key products are made in Vergennes, including the Health and Usage Monitoring Systems (HUMS) project for helicopters widely used by military craft. That system is designed to measure wear and tear on helicopter operating systems to predict accurately when maintenance should be performed, thus both enhancing safety and preventing unnecessary expenses.

According to Goodrich, its system has more than 40 sensors that monitor “an aircraft’s engines, transmission and rotors to detect developing problems,” and it senses “potential mechanical defects before they can cause harm to the aircraft.”
Mirelez said that product continues to make inroads in the commercial sector as well as in the defense market.

“We are pursuing the retrofit market for both commercial and military,” Mirelez said. “The value to the operator is by using the system ... there are fairly considerable cost savings.”

Other vital division products being manufactured on Panton Road, Mirelez said, include fuel measurement and management systems; proximity sensors and sensing systems that, among other things, let aircraft operators know that doors are properly secured; and electro-mechanical actuators, which among other things, move guiding fins on missiles that allow them to change course.

“A lot of those products are being produced there in Vergennes,” he said.

LOOKING AHEAD
The quarterly report showed both good news and bad news. It concluded that the “market for our defense and space products remains strong. Our first quarter defense and space sales grew faster than previously expected, leading us to increase our expectations for 2009 sales in this market channel.”

But it speculated that “airline capacity, as measured by Available Seat Miles (ASMs), will show a greater contraction in 2009 than our previous forecast of minus 4 percent, and will probably be in the minus 5-8 percent range,” leading Goodrich to foresee a commercial market that is flat at best. Sales of new or retrofitted equipment to various sectors were off from 2 to 8 percent, the report said.

Still, Mirelez said Goodrich remains in good position in commercial aviation because the company has products on virtually every plane in development by both Boeing and Europe’s Airbus, as well as those already flying.

“We are well positioned in programs that are ... still in strong use at airlines,” he said. “We also have captured business on commercial aircraft that are in the process of being developed and being certified and are in process of going into service.”

Nor is Goodrich sitting on its hands waiting for a rebound in commercial aviation.

“We continue to try to improve our position on those platforms. It’s not like we’re satisfied with our position,” Mirelez said.

Still, there are no guarantees that all current jobs are safe in Vergennes, although on the other hand if the economy bounces back in the years to come the job growth of the past four years could also return.

“We make it a practice not to speculate on changes in workforce,” Mirelez said. “That said, the thing we need to do is to continue to take a look at the business, and match the workforce to the business needs.”

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