BACKGROUND OF ESTERLINE:
Esterline Technologies, formed in 1976, is a Bellevue, Washington based-company focused on developing and manufacturing highly engineered custom components for aerospace and defense markets. It expanded decentralized facilities for engineering, production, marketing and sales, to 11 states and five foreign countries, with 34 business units and 7,500 employees.
By 1995, Esterline was a multi-industry conglomerate with revenues of #350 million. However in 1999 when the new C.E.O., Bob Cremin, took over, he narrowed the company’s focus to key industries and technologies originally shrinking revenues to $155 million. This reduced the company mix from 10 markets to 2: commercial aerospace and defense. Esterline in turn made 30 new acquisitions allowing it to cement its targeted market position and ease the burden of funding growth. In particular, it acquired Leach Holding Corporation in 2004 which was primarily focused on aerospace applications, and Darchem Holdings in 2005 for both defense and aerospace applications, each adding $120 million and $70 million to Esterline’s revenue. In addition to targeted acquisitions to accomplish turnaround, it also stressed internal new product development. In 2005, Esterline closed the year with revenues of $835 million and operating income of $51 million, rising from $614 million and $29 million respectively the previous year. At the same time, it became a Tier 1 supplier for 2 of its most important customers: Boeing and Airbus, and experienced a rising % of on-time delivery with 100% in the last quarter of 2015. The company was forecast to exceed revenues of $1 billion in 2006.
Korry:
Korry was a home-grown division of Esterline producing high performance lighted displays and controls with revenues of $100 million. The division operated with two production areas (parts vs. assembly), and faced the