Size Does Matter! Size Does Matter! And a Bigger Smiths Can Offer More

Smiths Aerospace virtually doubled in size over the last year. The former Smiths Industries Aerospace bought TI Group plc for $2.72 billion in stock earlier this year, and from the deal also gained Dowty. The new company has combined sales of $2 billion a year.

Director of strategy and marketing, Bill Mawer, told Show News, "This is our first opportunity to show the scope of the new Smiths Aerospace's capability to the corporate market. We are here to demonstrate that Smiths Aerospace is going to be an integrator of systems rather than just a supplier of individual instruments and actuators."

Since the acquisition of Dowty, Smiths' corporate equipment sales have doubled to $30- to $40-million annually, not including work for engine manufacturers. But according to Mawer, "This isn't enough when you consider that our aerospace business has an annual sales of $2 billion. We are determined to grow this further, and we now have our new business structure in place to correct this."

Smiths has just signed a contract with Bombardier to fit ISIS (Integrated Standby Instrument System) attitude indicators on the Learjet 60, and is hopeful of gaining the Learjet 45 later. The contract is potentially worth $20 million over five years.

The company has also signed a contract for a number of combined voice/flight data recorders to an undisclosed cargo airline. According to Mawer this technology is a spin-off from Smiths' military market, and is an affordable candidate for the corporate and regional jet markets.

Both Smiths and Dowty equipment was already on board the Raytheon Horizon before the companies joined forces. "We build the Horizon empennage as a complete unit at our Hamble site in the UK. We don't supply the flight control actuators, but do supply the actuation (equipment) around the landing gear, andwe also build the integrated fuel system and elements around the cockpit," explained Mawer.

Smiths Aerospace claims that it has become the largest European-based equipment supplier, with half of its operation in Europe and the other half in the USA. "In aerospace, size does matter!" says Mayer. "You have to be able to offer a large range of equipment and have the systems integration and management capability to take on a large part of a new aircraft program. That dictates a company of a certain size, if you are going to play in this first-tier supplier program. Aircraft manufacturers expect first-tier suppliers to be risk-sharing partners on new aircraft programs. This means that only companies of a certain size and depth to their pockets are able to play that sort of game.

"In the bizjet and regional aircraft market, the aircraft manufacturers are increasingly dividing up aircraft integration packages into a smaller number of larger pieces," Mayer notes. "The manufacturers are looking for companies that will take on a complete integrated system or integrated part of the aircraft for them. We have the capability to do that inside Smiths Aerospace, both with the range of technology and program management systems integration skills."

-Mike Vines