October 18, 2012

Grants help small businesses ‘wave the Wichita flag’ overseas

During the aviation downturn, Harlow Aerostructures, like the rest of the city’s general aviation suppliers, lost much of its backlog.

During the aviation downturn, Harlow Aerostructures, like the rest of the city’s general aviation suppliers, lost much of its backlog.

In response, it set out to diversify and bring in work from international companies.

“The world is getting much smaller,” said Jim Barnes, Harlow’s president.

For a small manufacturer, “it’s relatively easy today to ship anywhere in the world. Ten years ago, it was virtually unheard of,” he said.

Before the downturn, Harlow, which employs 140 people, had begun to make small advances toward connecting with overseas customers.

In 2009, the company attended the Paris Air Show for the first time. There, company officials met with two companies that wanted to know more about Harlow’s design capabilities. They came home with a good-sized contract.

In 2011, Barnes returned to the Paris Air Show as part of a delegation from the city of Wichita.

“It was such an unbelievable opportunity,” Barnes said.

The company also attended the Farnborough Air Show in England for four days in July, an outreach effort supported with a $10,000 State Trade and Export Promotion Program (STEP) grant provided by the U.S. Small Business Administration and administered through the Kansas Department of Commerce.

The grants were authorized by the Small Business Jobs Act of 2010 to help increase exports by small businesses.

The grant helped make attending the show more affordable and gave Harlow the ability to send an additional person to meet with customers and potential customers.

While there, Harlow made contact with Israeli Aircraft Industries, Cyclone, Socata, Turkish Aerospace, Bombardier Ireland and others.

Participating in the international shows has helped Harlow bring work to Wichita – work that otherwise would have gone to European companies.

It also has given it the chance to “wave the Wichita flag” and promote the Air Capital, Barnes said.

Wichita’s aviation industry is known throughout the world, he said.

Because of the shows, the company has won work from several international customers, including Europe’s Daher-Socata, Turkish Aerospace Industries, Fokker in the Netherlands and with a division of IAI, the Israeli company.

“It was primarily the face-to-face meetings in somewhat of a neutral-type setting that provided us the opportunity to sit down and have long conversations about our design and prototyping capabilities,” Barnes said.

STEP grants

The STEP grant was part of a three-year pilot initiative that makes matching funds available to states to increase exports by small businesses nationwide, said Wayne Bell, district director for the SBA in the Wichita district office.

Every state has participated except for West Virginia, Indiana and Alaska, Bell said.

Kansas received $500,000 in grant funds in the first year of the program. In 2012, it received $154,000 in funds.

Since the program began, 24 Kansas firms have been awarded grant money, including Exacta Aerospace, Metal Finishing, Full Vision, Global Parts and McGinty Machine, Bell said.

The funds can be used to attend trade missions, market products and services abroad or do things such as translate Web pages or create marketing materials for international markets, Bell said.

Grants can be used to reimburse up to 75 percent of expenses for such endeavors, up to $20,000 per company.

Now is the time to apply, said Bell, who expects funds will run out by the end of this fiscal year.

“The key thing is to apply and be approved,” Bell said. “Then their funds would be committed.”

Barnes said small manufacturers such as Harlow don’t have that many opportunities to market to global customers.

Government leaders recognize companies such as Spirit AeroSystems, Bombardier and Hawker Beechcraft for their global efforts.

“I believe they overlook the need for small businesses to have programs like this one in order to market Wichita and Kansas,” Barnes said.

Expanding its base

In 2008, Harlow’s international business accounted for less than 1 percent of revenue. Now, it’s risen to between 3 percent and 5 percent. And in 10 years, the goal is to have international business make up 20 percent of revenue.

“That’s our marketing strategy,” Barnes said.

Besides diversifying its customer base by looking overseas, Harlow has diversified the type of business it performs.

In 2008, for example, it had no work from Gulfstream. Now, Gulfstream work is nearly 20 percent of its business.

“Our marketing goal was to move from mid-level general aviation to large cabin general aviation and diversify into more intellectual property,” Barnes said.

The large business jet market has held up better than has the market for medium-size and light business jets.

Harlow’s biggest customers include Cessna Aircraft, Spirit AeroSystems, Gulfstream, Lockheed Martin and Boeing.

Harlow is also focusing on its design and prototyping capabilities, which it considers its niche.

It designs motion controls or throttle quadrants for general aviation and military products.

And it’s increased the number of design engineers from one to four.

Harlow also produces bulkheads, spars, chords, stringers, bushings, bolts, complex assemblies and sheet metal and structural component assemblies.

The biggest challenge in taking on international customers was initiating a global shipping department to handle International Traffic in Arms Regulations, or ITAR, and export regulations. Harlow is in the process of developing compliance procedures.

“That’s quite a task,” Barnes said.

At a time when other companies are sending work to Mexico and elsewhere, Harlow is bucking a trend.

“We’re bringing work back directly to Wichita and to Wichitans to ensure our longevity in the aviation field,” Barnes said. “We have a great deal of gratitude towards the city and the state with the STEP grant allowing us to participate. … The STEP grant facilitates work coming back into the Wichita area.”

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