Spokane Journal of Business

New Horizons for Inland Northwest aerospace

Diversification is key to maintaining operations, even in era of Boeing resurgence

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Manufacturing of commercial aircraft components is beginning to pick up again after years of low production rates here, some Inland Northwest aerospace companies say. 

However, while some advanced manufacturers in Eastern Washington welcome the opportunity for increased production, those companies also are looking to new lines of business to diversify their operations outside of the industry.

Diversification will be the driving force for continued business resiliency in Eastern Washington, followed by efforts to address an industrywide labor shortage, some company representatives say.

Staci Nelson, executive director of Liberty Lake-based Inland Northwest Aerospace Consortium, says as Boeing ramps up production once again, it will create more opportunities for the organization’s members.  However, she adds that the expected increase in work won’t significantly impact many Eastern Washington manufacturers due to increased diversification at their businesses.

She says Boeing’s increased production is, “really more of a blip on the screen” for INWAC’s members. 

Greg Konkol, president of AccraFab, concurs with Nelson, and says, “The events that grounded the Boeing airplanes really hasn’t affected us. About 50% of our work is in the energy-power space and about 30% is in aerospace.”

Konkol says the remaining 20% of AccraFab’s business comprises industrial testing and measurements in the medical sector. 

Mike Marzetta, president of Liberty Lake manufacturer Altek Inc., says diversification carried the company through the downturn in aerospace production. 

“Aerospace got hit hard and the industry had to ramp way down,” says Marzetta. “We were cushioned by some of our diversity, but not entirely, because aerospace is a very big piece of our pie. It’s part of our business plan to not have too many eggs in one basket or one industry.”

Marzetta says aerospace manufacturing makes up about one-third of Altek’s business. The company also manufactures materials for the medical and technology industries.

As the Journal has previously reported, onset of COVID created significant headwinds for Washington’s Boeing-centric supply chain. That event, combined with two deadly crashes and subsequent nearly two-year, worldwide grounding of Boeing Co.’s 737 MAX aircraft, created a black swan scenario for Boeing’s vendors throughout the state. Revenue within the supplier framework dropped anywhere from 30% to 80% within just a few months, depending on the company and the Boeing programs that they supported.

Recently, however, the Seattle Times reports that Boeing now is hiring 300 to 400 machinists a month to meet the growing demand, and the company recently reopened its third assembly line for the 737 Max in Renton, Washington, with a fourth facility planned to reopen in Everett, Washington.

Marzetta says Altek is exploring green aviation as a new target market, in addition to evolving commercial sectors such as air taxis and drones.

He says that demand for aerospace production is still higher than available supplies, “unlike medical, which is very steady and balanced between supply and demand.”

Nelson says that even the aerospace organization is looking to broaden its focus to incorporate more advanced manufacturing and workforce education to align with its membership.

Konkol says about two-thirds of AccraFab’s production within the aerospace sector is for commercial, one-third is for military, and a small amount of work for the space industry.

He says he expects that balance will continue this year.

Nelson says, “We are taking a more active role in workforce training and development than we ever have historically.”

Konkol says AccraFab experienced extremely high demand and aggressive growth when air travel began to resume after the pandemic-related travel restrictions loosened up. That continued through last fall and only began to soften in the last quarter of 2022 through the first quarter of this year. He says demand likely will increase throughout the second and third quarters this year.

“Right now, we’re about at the level we were pre-pandemic,” he says.

Nelson says many INWAC members have similar experiences, and as supply chain issues continue to ease, the current climate feels more normal for manufacturers.

Marzetta says business at Altek is expected to grow moderately this year compared to previous years.

“We’re anticipating more growth. Hopefully, it’s not going to be as aggressive as last year. We’ve caught up with the backlog, and my hope and prediction is that we’re just going to continue to grow at a normal pace.”

He declines to disclose the company’s annual revenue, but says last year was a record sales year for the company.

Marzetta says Altek’s growth was so aggressive that the company hired over 50 employees in 2022 and now has more than 200 employees.

At AccraFab, Konkol says the company is facing double-digit growth year-over-year, which is a significant increase from the single-digit growth historically experienced before the pandemic.

Because of diversification, Nelson explains that Eastern Washington manufacturers had a head start over Puget Sound-area aerospace manufacturing companies that are only now starting to see their businesses pick up steam again. 

“Our companies are exhausted because they’ve been working nonstop,” she says.

The main limiting factor for many aerospace manufacturing companies’ growth is the workforce shortage and a major need for skilled labor, Nelson says.

Konkol agrees and says AccraFab has taken workforce education and training into its own hands to meet its labor needs with the creation of the University of AccraFab last year.

Konkol says about 140 employees are enrolled in the program and are learning technical skills and competencies that will take them from entry-level skills to a journeyman level.

He says, as people increase their knowledge and areas of expertise, they’ll get promoted and compensated including through leadership tracks to become a supervisor or manager.

“We tried for about three years to work with some of the local organizations and colleges … trying to develop skilled craftsman programs. We tried for three years and couldn’t get anywhere, and we finally came to the conclusion that, if we’re going to do this, we’re going to have to do it ourselves.”

Other priorities this year for some Eastern Washington manufacturers include increased automation in production, and sustainability efforts that are starting to trickle down from top-tier manufacturers’ policies.

Marzetta says Altek will increase production of robotics components through the company Minds-I that focuses on STEM education.

Konkol says AccraFab made several improvements last year to reduce waste streams, energy consumption, and recycling, including a joint effort with a client to develop reusable packaging.

He says smaller automation projects are planned later this year, but next year, a major project will revamp the company’s plating department.

Konkol says the plating department is labor intensive, and not the best working environment.

“We’re going to automate that process, then our folks will be focused on chemistry or water quality programming,” he says.

Nelson says automation will be a trend for manufacturers going forward, but incorporating those aspects is too expensive for many companies to justify in the current economy.

“Incorporating artificial intelligence is capital intensive. Interest rates are more costly to make those upgrades, which makes it more challenging for companies to be able to afford to do,” she says.

Erica Bullock
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Reporter Erica Bullock has worked at the Journal since 2019 and covers real estate and construction. She is a craft beer enthusiast, who loves to garden and go camping with friends.

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