Once regarded a leader in the tyre industry, Goodrich has evolved into a global supplier of systems and services to aerospace, defence and homeland security markets, areas that offer higher margins and longer-term shareholder value.

Goodrich switched to aerospace because of how the sector’s growing market base and global presence would position the company. It has been growing ever since through acquisitions and organic growth, and now celebrating its 140th anniversary, Goodrich offers one of the most strategically diversified portfolios of products in the industry.

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“Today our focus is on proprietary flight-critical products and systems,” says Paul Snyder, president of Goodrich customer services. “Nearly every commercial and military aircraft line has our products.”

With more than 80 facilities in 19 countries, Goodrich provides services, support and manufacturing, employing 25,000 workers. Sales in 2010 totalled about $7bn.

Although Goodrich is US-centric, a large percentage of its business is outside of the US. Its customers include defence and commercial manufacturers, including Lockheed Martin, Rockwell Collins, Boeing, Airbus, Embraer, Bombardier and Cessna.

Move to Monroe

Goodrich’s determination to flex its aerospace muscle, by expanding from components to integrated aircraft systems, started in 1999 when Goodrich acquired Coltec Industries for $1.49bn. The purchase resulted in Goodrich moving its corporate headquarters to Coltec's home base in Monroe, North Carolina, from its former location in Richfield, Ohio.  

Today, Monroe is also the Goodrich maintenance, repair and overhaul (MRO) campus for the Americas. Located next to Monroe Regional Airport, the facility provides MRO services for a variety of components for commercial, regional, business and military aircraft. Other services there include portions of its enterprise customer portal, a spares call centre and business development and asset and repair management groups.

In 2008, Goodrich doubled the Monroe operation to allow for additional services, including complex repairs of helicopter actuation products and large aircraft cargo systems.

Acquisition drive

Scores of other acquisitions have put the company on the global map. The most recent is Microtecnica, which Goodrich purchased from a European private equity firm on April 1 for about €331m. 

“This acquisition complements our current actuation system business and gives broader access to customers in that marketplace,” says Goodrich president and CEO Marshall Larsen.

Microtecnica has facilities in Turin, Luserna San Giovanni and Brugherio in Italy and Bristol in the UK. It employs nearly 700 people and is a provider of flight control actuation systems for helicopter, regional and business aircraft, missile actuation, and aircraft thermal and environmental control systems. 

It has significant sales in both the commercial aerospace and defence and space markets. With approximately 25% of sales in commercial and military helicopters, Goodrich expects the acquisition to strengthen its position in Europe.

“Growth, whether it be organic or by acquisition, is highly dependent on the regions in which we compete and the customers with which we do business,” says Mr Larsen.

Lean and mean

At the heart of Goodrich’s acquisition and greenfield strategies is the company’s continuous improvement and lean manufacturing culture. “Because of that culture, we have been able to grow significantly without additional bricks and mortar and limited use of greenfield sites,” says Mr Larsen. He expects Goodrich to continue this philosophy. In fact, the decision on how and where to be involved falls largely on those markets where aerospace manufacturers are concentrating their business.

Mr Snyder adds: “We consider what products or portfolios we want to pursue on a given aircraft.”

For defence and space, Goodrich sees growth in markets for helicopter products, precision munitions, fixed-wing retrofit programmes, and intelligence, surveillance and reconnaissance systems. Mr Larsen expects the market for commercial original equipment to grow rapidly over the next few years as Boeing and Airbus increase production rates on in-production programmes and introduce new platforms. In addition, he expects to see the commercial aftermarket grow this year.

“We expect that growth to continue for several years,” says Mr Larsen. “Long-term agreements and asset management agreements, especially on new platforms currently in development, will help to enhance the commercial aftermarket growth for Goodrich and support high-dispatch reliability and cost-effective solutions for our customers.”

With Goodrich maintaining a balanced portfolio to take advantage of the cyclical trends in both commercial and defence markets, Mr Larsen reveals he expects total company sales to grow about 12% in 2011.

Areas of growth

Looking at growth areas around the world, Goodrich identifies three gaps in its coverage: South America, western Asia and the Middle East. “We decided to address the Middle East first due to its staggering growth and growth within [airline company] Emirates, in particular,” Mr Larsen says.

Consequently, Goodrich opened a $25m, 10,684-square-metre greenfield MRO facility in November 2008 in Dubai’s Jebel Ali Free Zone.

Last year, Goodrich opened a 15,794-square-metre facility in Tianjin, China, directly across from the Airbus final assembly line. The greenfield campus supports engine build-up and podding work for the new Airbus final assembly line in Tianjin and serves as headquarters for Goodrich’s supply chain activities in China. 

Goodrich had originally located that facility in a 4645-square-metre building in Tianjin Airport Industrial Park in 2009 to perform nacelle and thrust reverser MRO work for customers in the region.

Phased competition

The company also considers acquisitions or greenfield locations where it can maintain a competitive position, both at the airframe assembler level and the operator level. Consequently, the competition may have multiple stages.

“The initial effort is to win a position as a supplier, such as with Airbus or Boeing, then work with the airlines all over the globe to secure long-term contracts for service and support as they take delivery of their airplanes,” says Mr Snyder. “This usually takes us someplace in the globe where people are making decisions.”

While Goodrich’s products fit virtually with every aircraft launched, executives find that as Goodrich matures into a larger company, it must choose carefully which product to be involved in on which aircraft.

The Airbus A380 offers such an example. During its development, Goodrich acquired TRW Aeronautical Systems, which gave Goodrich more content on the airplane than anticipated.

“Today our presence on the A380 is very significant and we carry a lot of risk as well as opportunity,” says Mr Snyder. Today the company is getting better at strategic planning. “We decide what level of investment we are comfortable at the enterprise level,” he adds.

Dreams come true

Yet Boeing’s 787 Dreamliner offers the company an unprecedented challenge. For the first time in Goodrich’s history, it is required to approach the market as one company, although it has four or five business units applying products and services.

With some 55 B787 aircraft for 12 airlines operating in 60 different cities expected to be completed in the first year of operation, the liability rate may be higher than any new aircraft launched before. For Goodrich, that means being coordinated and bringing value propositions that stand across the entire company.

“That means getting people to where these aircraft are going to land and take off every day, positioning parts on a global scale close to where customers are going to operate, and ensuring service documentation is in place and that all of handouts between the airlines, Boeing and ourselves are ready to go,” says Mr Snyder.  

It is a mammoth undertaking and a new chapter for Goodrich’s way of doing business.