Apple Valley, California
Industry: Electronics & Aerospace
Products: Hardware and specialty products
CEO Kevin Reid is eyeing new markets for his aerospace manufacturer while pushing for lower regulatory burdens in California.
Beginning as a manufacturer of metal spacers for bushings, Reid Products quickly adapted to supply the growing aerospace market in Southern California. The company is a key manufacturer and supplier of specialty fasteners for satellites as well as fuselages and wings on military aircraft.
Reid, his wife, Shelby, and their son, Cody, took over the business from Kevin's father in 2003 and expanded it to a 38,000-square-foot facility in Apple Valley.
In order to meet the demanding standards of customers such as Boeing, Lockheed Martin, and NASA, Reid Products became an AS9100 and ISO 9001 registered facility and is also NADCAP accredited for non-destructive testing.
While the aerospace industry has been good over the years, the Southern California aerospace industry has changed dramatically, according to Reid. He believes many manufacturers have left the state due to the increasingly high regulatory standards. "SoCal used to be the aerospace capital of the world," says Reid. "At one point in time, 85 percent of the aerospace fasteners in the world were manufactured in Southern California. I don't believe that's the case anymore."
Operating within California's High Desert, however, has given Reid Products a unique advantage over manufacturers who started in the South Bay of Los Angeles County, a longtime hub for aircraft manufacturing. "A lot of the supply companies have moved away to places like Texas, because of the bureaucratic issues and imposing environmental factors that have made it difficult for the aerospace industry to continue to thrive in the South Bay area," says Reid. "That, along with an increased minimum wage, makes it not as competitive to manufacture there."
According to Reid, the company's location offers less stringent regulations, compared to the aerospace manufacturers under South Coast Air Quality Management District (SCAQMD) guidelines.
Despite this advantage, Reid says the company still struggles to find experienced workers and the higher minimum wage requirements. "Labor costs are rising, but because we're in a protected niche of the aerospace industry, we've been able to push the envelope on our product pricing and remain competitive and relevant," says Reid. "We've trained people in the past but are now finding more qualified workers through online job websites. In fact, we've recently hired three new people within the past month."
The company's facility has four buildings, each with a variety of machinery ranging from CNC machines to a semi-automated grinder, and testing equipment.
Reid believes that a hands-on approach is still necessary to making a quality product. "There's a lot of nuances into what we do. Our equipment is tailored to shorter runs and it doesn't lend itself to full automation," says Reid. "For example, when we forge a titanium bolt, we have to use induction heating and pulse it. The operator has to catch it on the right pulse where we get the metal so close to what's called a beta transus, the temperature which changes the microstructure of the metal. The forging has to be performed at the right time or the material gets ruined, and that's only something a trained eye can catch."
With the price of certain alloys, it makes sense for Reid to be very efficient in how they process and acquire raw metals. "Most of our materials come from a variety of vendors in the state," says co-owner Shelby Reid. "Some specialty metals are harder to find, such as titanium which we get from Pennsylvania. In our industry, even the grades of metal are very important so we keep a close watch on this."
Being a family-owned business, Reid Products has been able to break into other markets that could take advantage of high-end hardware. "Right now everybody is desperate for our time and capacity," says Reid. "Hopefully we can get more qualified people and we'd be able to run this operation 24/7 to meet the demand."
Challenges: "There needs to be a reasonable regulatory environment for all of the aerospace industry," says Reid. "The SCAQMD's is measuring certain processes down to the parts per million and want to remove a long history of processes that they feel are bad for the environment. For example, cadmium is a known carcinogen but it's the best way to plating for aerospace fasteners. They have been looking for a long time to find another alternative but there is none. Relaxing a bit on some of these issues will make the industry strong again here."
Opportunities: "We're in a good area for expanding and regulatory standpoints against our competitors," says Reid. "We're not doing anything that harms the environment and If we can get the people we can run more shifts and provide so many more jobs. We're also expanding to other products. We simply take metal and turn it into something else, like a racecar, bridge, or an airplane. For a privately held company, we can be proactive and reactive, and that gives us a distinct advantage."
Needs: "With government sequestration, there was a lot of spending that ended. It has now to the point where some military aircraft are not capable of flying because of maintenance and parts availability," says Reid. "So we're getting orders like crazy and it's hard to find experienced people to run the operations to meet the demand."