Building a strong aerospace hub

For almost 50 years, Forest City Gear has grown through reinvestment, a lesson longtime owner Frederic Young learned from his parents, the company’s founders.

Now, the Roscoe, Illinois-based business – which makes loose gearing – is looking at a higher altitude of growth because of strong sales in aerospace and foreign markets.

“Our growth has averaged 5% to 10% per year. We anticipate banner years for the next several years because of the growth in aerospace and medical,” Young says. “Our goal is to reach $40 million within the next 5 to 10 years.”

Forest City is one of many companies – most of them manufacturers – that comprise the Rockford Aerospace Cluster, one of the major reasons the Rockford area has been breaking export records.

In 2013, exports from the Rockford region surged 32%. The total value of Rockford region exports – $2.53 billion – was the highest on record, and placed Rockford 89th in the nation’s metro areas in exports, far above its ranking by population. By comparison, U.S. exports rose only 2% that year.

For a century Rockford has been at the forefront of machine tooling technology. As manufacturing jobs move back to the United States, and manufacturing again becomes a technology-driven business, Rockford is poised to lead in complex industries such as aerospace.

“We’ve always had a strong aerospace sector in the Rockford area, but our recent efforts to build the profile of the Rockford Aerospace Cluster are paying off,” says Carrie Zethmayr, executive director, trade and investment for the Rockford Area Economic Development Council (RAEDC). “Area exports grew 46% from 2010 to 2012 and our projected export growth is 70% by 2020.”

The Illinois Department of Commerce and Economic Opportunity (DCEO) and RAEDC have teamed up to connect companies – especially small and mid-sized – to markets across the world. Connections have come from:

• DCEO’s Office of Trade and Investment (OTI) worked with the RAEDC to lead export-oriented delegations to the Paris and Farnborough Air Shows, helping local companies find clients abroad
• OTI and RAEDC have collaborated on Rockford go-global events
• OTI has worked to promote the Rockford aerospace industry globally, and increased international interest in Rockford as an investment destination

“Aerospace manufacturing is the backbone of the Rockford Region economy, and has become one of the most impressive success stories in the Midwest,” states Jim Schultz, DCEO Director. “That’s why so many global aerospace companies, from Woodward to GE Aviation, are expanding in Rockford.”
 

Building an aerospace powerhouse

Just 90 minutes northwest of downtown Chicago, the Rockford area has about 70 companies in the aerospace supply chain within the Rockford area employing more than 7,000 people.

Expanding that region to include Chicago and southeastern Wisconsin, there are more than 200 companies in the aerospace sector, including giants such as AAR Corp., Northrop Grumman, and Boeing.

“Despite the challenging economic times in Illinois and a lot of other states, Illinois has a strong manufacturing base, and the Rockford Cluster is its best-kept secret,” says Mike Thompson, vice chairman of Ultrasonic Power Corp. (UPC), a manufacturer of industrial precision ultrasonic cleaning equipment. UPC has clients in more than 50 countries, and one-third of its revenue is attained from international markets.

Woodward, which makes fuel, combustion, fluid, actuation and electronic control systems for the aerospace and energy markets, also is thriving in Rockford. It is in the midst of building its second campus in the region, a $300 million, 440,000ft2 facility in Loves Park for its aircraft turbine systems division.

“The state was proud to provide assistance for Woodward’s expansion because of the powerful economic ripple effect. A study by Northern Illinois University estimated that for every 100 Woodward jobs created, another 58 jobs will be created elsewhere in the Rockford metropolitan area,” Schultz says.
 

Export assistance

Regional economic leaders such as Zethmayr, working in tandem with DCEO, play a vital role in finding new overseas customers for Rockford’s aerospace manufacturers and assisting in the overall promotion of the cluster.

“The Illinois SBDC International Trade Center of the Rockford Area is a program that works directly with companies to increase the total value of goods exported from the Rockford Area of Illinois,” Zethmayr explains. “Services are provided to companies to walk them through the process of establishing and growing an export program, including consulting, training, and assistance in accessing valuable programs such as the Illinois State Trade and Export Promotion (ISTEP) program.”

The ISTEP program provides Illinois’ small- and medium-sized businesses with assistance to increase their exports. ISTEP includes three options for Illinois’ companies: group trade missions, individual foreign market sales missions, and assistance to achieve product compliance certifications.

“We export gears to Switzerland, the Netherlands, China, Singapore, the Philippines, Australia, New Zealand, Japan, Canada, and Mexico,” Young states. “We’ve attended local and international trade shows with assistance from the Rockford Economic Development Council and the state of Illinois.”

Forest City sells about 30% of its products to aerospace-related companies.

“We have gears in almost all Boeing aircraft and many Airbus models, not to mention Cessna, Hawker Beechcraft, Learjet and many others,” Young says. “We made gears for the actuator arms and wheels drivers for the last Martian Rover (Curiosity), so you might say we are out of this world.”

Midwest Aero Support, of Machesney Park, received state ISTEP grants for participation in the Farnborough Air Show, Paris Air Show, and the Saab Operator’s Conference. The company provides repairs and electronics manufacturing for the commercial aircraft industry, including more than 130 customers and 12 OEMs worldwide, for manufactured products.

“Our first exports began in 1992 to airlines in Europe once we had established our repair capabilities,” says Brent R. Johnson, president of MAS, who started his career with Sundstrand Corp. and Saab Scania Aerospace. “With my prior experience dealing with airlines around the world, I offered our repair services, and many of them gave us the opportunity.”
 

Strength in numbers

Companies such as UPC are thriving, in part, because of their proximity to customers in the region.

Based in Freeport, UPC provides cleaning solutions for a wide variety of aerospace companies including Boeing, Virgin Galactic, Parker Hannifin, Lockheed Martin, and Space X.

“Being an active member of RAEDC and RAAN [the Rockford Area Aerospace Network] allows UPC the opportunity to be in close proximity with other aerospace-focused manufacturing companies,” Thompson states. “As a result of being located in an area that has so many aerospace-focused companies, we have attended many networking events such as the Lockheed Martin Supplier Symposium and Boeing Symposium, which has resulted in added sales and with other network member companies. UPC has been successful in the Rockford area due to educational institutions such as Northern Illinois University and Highland Community College preparing the future workforce for success in the area.”

UPC provides a line of energy efficient generators that produce high-frequency ultrasonic force for prominent aerospace, aircraft and defense component companies, and national defense departments. UPC’s product line started with generators, which has now expanded to console systems, bench tops, immersible transducers, flow-through reactors, and customized systems, allowing UPC to provide solutions for a diverse group of industries including automotive, pharmaceutical, music, and computer technology.

“When people think of manufacturing, they just think back to the 1970s and 1980s,” Thompson says. “Manufacturing is really technology. We’re a tech-based company.”

Young also credits the strong regional supply chain and customer base as factors in Forest City Gear’s success.

“Some of our very important customers are located in the area and they have helped our growth,” states Young, whose company has approximately 400 customers across the United States. “Because Rockford is so focused on manufacturing, that has been a real boon to our production with many suppliers for heat treat, blanking, plating, and other operations nearby. We have a world-class airport on the south side of Rockford, which helps. And, since Illinois is so centrally located, we have easy access to potential customers.”

The Illinois Department of Commerce and Economic Opportunity
www.illinois.gov/dceo