By Chris Meehan | Mar 15, 2021
Grand Junction, Colorado
Contract manufacturing for the aerospace, oil and gas, and industrial markets
With the capability of providing machined pieces that meet some of the most precise standards, it's no wonder that its work is in high demand.
Sneddon says the company can produce pieces as small as 20 thousandths of an inch in diameter. "Some of our Swiss manufacturing is very small and intricate, like needle valves and small valve products," he notes. "One of our niches is obviously one-offs where they send us a model and we're able to produce the product within three to four days and get it back to them. That's pretty difficult for most manufacturing companies to do, but we kind of have an expertise for that."
For Lockheed, SG Aerospace & Gas is manufacturing parts for the Orion spacecraft and JASSM missiles. "We do quite a bit of parts for the Orion," says Sneddon, noting that the company also has contracts to make parts for Boeing's 737 MAX and 767 planes.
The company has seen its production change significantly. In 2015, its client mix was about 60 percent aerospace and 40 percent industrial, including oil and gas. Now about 90 percent of its output serves the aerospace and military industries and about 10 percent serves other sectors, including oil and gas and firearms. Sneddon says that work for the oil and gas sectors has dried up tremendously in recent years.
Still, the flexibility to pivot to different markets helped the company maintain strong growth prior to COVID-19. "In 2018 and 2019, our growth pattern was averaging about 20 percent to 30 percent a year," Sneddon says. "Now in 2020, obviously there was a little bit of a halt in that year -- I think there was a halt for everybody, but aerospace especially. Now, on the space system and the military side, it really wasn't that bad, if anything, it increased. But as far as the commercial product that we do, that decreased quite a bit."
Sneddon says he used the downtime to revamp, focus on training, and reevaluate where it wanted to go in the future, while rebranding the company, previously known as Wren Industries, as SG Aerospace & Gas.
Prior to the pandemic, the company was growing about 20 percent a year, according to Sneddon -- even with the issues that grounded the 737 MAX. "We probably would've grown another 20 percent to 30 percent," he says. "We're still not back to where we were, but we're doing much, much better."
Some of that loss was made up with contracts for parts for Boeing's 767 planes, which are used by companies like FedEx and UPS. Sneddon says that work has increased a little bit during the pandemic as those planes have seen more use.
However, COVID-19 had a big impact on SG Aerospace & Gas's business last year. "We were down about 30 percent last year," Sneddon says. Thanks in part to a PPP loan, the company was able to maintain payroll and didn't have to let any employees go.
Sneddon is aiming for a return to growth in 2021. "I'm hoping that we'll have at least a 10 percent to 15 percent growth in employees," he says. "I'd like to bring on about three more people."
Looking ahead, Sneddon anticipates more change, and could see manufacturing more parts for the renewables industries. "Our five-year plan has pretty much changed into more of a two-year plan," he says. "With business, you just have to adapt."
Challenges: "Where's COVID going to be, and, and how is it really going to affect the economy?" wonders Sneddon. "There's been a lot of money thrown in to help the economy. But what happens when it ends? Obviously I'm worried about inflation. I worry about . . . what's it going to do to the U.S. business model in case they've been influxing too much money into the economy."
As a manufacturer for the aerospace industry, he's also concerned about the future of commercial air travel.
Opportunities: "We see opportunities coming with renewables," Sneddon says. "There are opportunities to grow and become a better supplier to different customers that are needing good, strong well-managed suppliers."
Needs: Less regulation and clarity on the Biden administration's spending priorities, Sneddon says. "Figuring out how to not put so much regulation on small business." He adds, "I bought the company in 2008. Those first five, six, seven years were very difficult to manage based off regulation and things that were happening. . . . The previous four years have been phenomenal."