Brothers Flying High With Boeing
It took six hours to carve the dull, gray 250-pound slab into a gleaming, intricate aluminum beam weighing less than 10 pounds.
But the piece isn’t an artist’s work bound for the Getty Museum. It’s one of thousands of wing spars that Aero Machining in Garden Grove is churning out for Boeing Co. under a new contract for its behemoth C-17 Globemaster III Air Force transport plane.
“When you take a block of aluminum, or any raw material, and you form and shape it, it looks like a sculpture. Except it was done with a milling machine,” said Aero co-owner Mike Cabral.
The contract, the largest ever for the company, will bring Aero more than $10.9 million over six years, contributing significantly to the company’s explosive sales growth. The company will produce more than 260 parts for each plane under the contract.
Aero Machining is one of the beneficiaries of the aerospace giant’s practice of rewarding contractors who have done good work in the past.
Aero had submitted the winning bid for the C-17 job every year since 1995. After the company won the job again last year, Boeing offered to lengthen the contract to six years, according to a spokesman for the aerospace company.
The contractor works hard to control costs, but is willing to upgrade equipment rather than hang onto older machinery that might save money in the near term, said Larry Whitley, Boeing’s communications manager in Long Beach.
“Any company that’s trying to move ahead has got to stay innovative and aggressive as they move through the entrepreneurial stage,” Whitley said. “It’s critical for young businesses to stay focused.”
Cabral, a third-generation machinist, views Boeing’s contract as an endorsement of the hard work that he and his brother put into their trade for decades, starting on the assembly line.
“I love the trade,” he said. “You have a passion for it . . . like an artist.”
For years, Cabral, 37, and his brother, Tony, 36, worked in a variety of shops. Then they decided to go it alone.
“After a while I realized what I was doing was making the owners of these companies very wealthy men. Why not do it for myself?” Mike Cabral said.
Their initial venture proved costly. The brothers found they had to take a pay cut in a trade where machinists can make close to $100,000, counting overtime.
“It was tough to get started,” he said. In fact, the brothers sold their first shop in 1989 during an aerospace downturn and remained on the sidelines for a few years.
They opened up another shop in 1993, then turned to Aero Machining to help out on a contract because the Cabrals didn’t have the equipment to handle it themselves. Then-owners Paul and Kirk Nguyen invited the brothers to join the business as partners. The Cabrals bought them out in 1997, assuming the company’s accrued debt and paying off the rest over time, in a deal totaling about $400,000, Tony Cabral said.
The Nguyens had an amicable falling-out with the Cabrals over the newcomers’ aggressive management style. The two sides are in mediation to resolve their differences, but have retained a business relationship. In fact, the Cabrals have referred some Boeing business to the new company started by the Nguyens, Pacific Machine in Garden Grove.
The first year after the Cabrals joined Aero--Mike in charge of engineering and sales, Tony in machining--Aero did $500,000 worth of business. The next year, sales surged to $970,000, then $2.5 million. Last year, sales hit about $5.5 million.
“One hundred percent growth every year--that’s not bad,” Cabral said.
Boeing accounts for 90% of the company’s business. Aero now produces 260 parts for the huge C-17 cargo jet, designed to carry 80 tons of troops or equipment anywhere in the world.
It can be risky for companies to rely so heavily on a single customer, says John Rooney, president of the Valley Economic Development Center.
“Obviously if you lose your account, you’re out of business,” he said. “Boeing is a good company to have, though. They really are cautious in the suppliers they choose. They try to build a relationship with them.”
Sometimes, he said, large customers flood suppliers with so much business they can’t accept other contracts, then play hardball on future negotiations when the small company has nowhere else to go for income.
“Before you know it, you’re working on contracts that aren’t profitable,” Rooney said. “The key for [Aero] is not to get complacent, and to aggressively pursue other contracts.”
But Cabral said he’s not concerned, noting that the Boeing contract is for several years. In the meantime, Aero is working to win business from Boeing archrival Airbus Industrie.
“We’ll be fine,” he said. “There’s plenty of work out there.”
Boeing announced recently that it will slash commercial jetliner production and cut as many as 53,000 jobs over the next two years, but Aero Machining’s contract should be secure. The C-17 cargo plane is being built under a military contract.
Mike Cabral says Aero operates on the theory that it’s easier to keep its customers happy when the company’s 30 workers are happy.
The owners expect employees to work long hours, if necessary, to get the job done. But the workers can count on receiving various perks afterward.
When a recent production glitch threatened to delay delivery of a crucial part, for example, Aero workers logged 80-hour weeks to finish the job on time. When the work was done, the Cabrals gave employees bonuses and time off with pay.
Mike Cabral has taken others on weekend jaunts to Las Vegas and bought them home computers.
“As long as I get the parts to my customer, I feel like it’s a fair exchange,” he said.
It’s a good strategy, particularly these days when unemployment is minuscule in Orange County and skilled workers are in high demand, said Edward Lawler, professor of management and organization at USC.
Instead of paying for training, or for bonuses to attract new workers, “it’s better to give it to the people you have,” he said.
Such ingenuity and aggressiveness have helped a growing number of small and minority-owned businesses like Aero win an increasing share of military contracts, said Tim Foreman, assistant deputy director in the Defense Department’s Office of Small and Disadvantaged Business.
“Small business is very successful at bringing innovation to the marketplace,” he said.
Minority-owned companies are among the fastest-growing segment of military subcontractors, capturing 5.6% of all contracts awarded in 1997, up from just 1.9% a decade earlier.
Cabral is proud of his family’s legacy in the machining business, recalling how his grandfather, Jesus Cabral, burnished parts for steel locomotives in Chihuahua at the turn of the century.
“I don’t think my grandfather ever worked behind a desk,” Cabral said. “He would have loved to have run his own business, but I don’t think the opportunities were there for him.”
Nevertheless, Cabral chafes at the idea that his ethnicity has played a role in advancing his company.
“What matters is a supplier who always delivers on time,” he said. “Regardless or your ethnic background, if you don’t produce a quality product, those doors aren’t going to be open.”
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Piece by Piece
Central to Aero Machining’s business is its contract with Boeing to make 260 different parts for the giant C-17 Globemaster transport. The machining process may, for example, take a 250-pound block of aluminum and turn it into an intricate wing part weighing less than 10 pounds.
The Machining Process
1. Machinist studies Boeing blueprints, uses computerized drawing program to create three-dimensional depiction of part.
2. Machinist writes program telling computerized milling machine how to cut the part out of solid metal. Program is loaded into machine’s memory.
3. Robotic cutters create rough version of part; most parts require multiple passes through machine. Final pass removes excess material, drills holes and refines contours. Parts randomly inspected at each interval.
4. Part removed from machine, rough edges smoothed by hand.
5. Part shipped to an inspection firm hired to test for internal cracks and flaws.
6. Part returned to Aero, where it is painted, stamped with a part number and shipped.
C-17 Globemaster III
Primary function: Cargo and troop transport; ability to operate on short runways allows it to fly large amounts of cargo a great distance into small, austere airfields.
Typical load: Two M2 Bradley fighting vehicles; two utility jeeps, plus trailers; one 2.5-ton van, plus trailer; one 2.5-ton cargo truck, plus trailer
Alternate load: The C-17 can carry 102 troops and their equipment
How Globemaster Compares
Payload
Globemaster: 170,900 pounds
Boeing 737: 38,000 pounds
Minimum Runway Length
Globemaster: 3,000 feet
Boeing 737: 4,500 feet
Sources: Aero Machining, The Boeing Company
Graphics reporting by JANICE JONES DODDS / Los Angeles Times
