Earlier this year Hartzell Engine Technologies (HET) took two big steps forward in the strategic transformation of our business, through the asset purchases of Sky-Tec and C&D Associates. The Sky-Tec acquisition is particularly important, as it establishes HET as the leader in aircraft starters – the one product line we were not #1 in – before now. The addition of both help HET continue to grow and improve our business.
This is just the latest step in re-shaping HET. The journey began with the difficult decision to actually shrink the business. When HET was formed in 2010, we had nine different product lines. In a small business like ours, that was a broad scope – much too broad for us to be the best in every category. We said we were “a mile wide and an inch deep.” To solve this problem we developed a strategy to evaluate each product line, with the objective of focusing the business on those things that fit the business model and where we could achieve best-in-class status. This review led us to build the business around our turbocharger systems, alternator, starter, cabin heating systems, and fuel pump product lines and divest our electronics, magneto, ignition harness, and oil filter product lines.
The result was a smaller business that was down to its “fighting weight.” Our goal was to use our new found focus to grow our remaining core product lines: organically through new products and programs; and through acquisitions. We’ve had outstanding success at both. The articles in this issue on the Tecnam program and our PM Starter are two examples of our organic efforts.
We’ve been an active acquirer long before this year. In 2012 we successfully integrated the Lamar Technologies starter business into our own. In 2013 we acquired the Jasco alternator line formerly held by Skytronics. And, in 2014 we completed the asset purchase of Plane-Power and moved it to our Montgomery campus. These acquisitions erased our earlier shrinkage, but the new revenue represented a vast improvement in the business by adding to and strengthening lines we were already good at – our core strategic product lines. These acquisitions also sharpened our skills at integrating businesses. The team at HET has become quite adept at wrestling with business systems, drawings, manufacturing methods, certifications and all of the other minute details that go into bringing new business into HET. It’s not easy work, in fact it’s quite a challenge, but all involved seem motivated to help build a truly great company.
To that end, we’re very close to having everything in place to bring C&D into HET, with Sky-Tec planned for around the end of this year. Once they’re in, we’re not done. Both businesses bring opportunity to rationalize these lines around the best products we can collectively offer. This will be good for our customers and make for an even healthier, more efficient business that will thrive into the future.
You can read more about Sky-Tec and C&D Associates below.
Until next time,
Mike Disbrow, President
Hartzell Engine Technologies