Aero Fluid Products to Shut Down Simi Valley Plant

Aero Fluid Products, a manufacturer of parts for commercial and military aircraft, will shut down its facility in Simi Valley this summer and send the work to a plant in Ohio. The closure will result in the loss of 82 jobs, according to the Worker Adjustment and Retraining Notification recently filed with the state employment department. It also may create a vacancy in a 126,000-square-foot manufacturing building at 4175 Guardian St. Aero Fluid is one of several properties in the San Fernando Valley region owned by Cleveland, Ohio-based TransDigm Group, a public company serving aerospace and military clients. TransDigm has been in the process of restructuring its operations — strengthening some of its divisions and shuttering others. The company previously had operations in Sylmar, before deciding sell off the business. Aero Fluid’s closure raises questions about what’s to come at other TransDigm business divisions in Northridge, Camarillo and Valencia. Attempts to reach an Aero Fluid representative in Simi Valley were not successful. Calls to TransDigm corporate offices in Ohio were not returned. “This (closure) is consistent with their long term strategy on cost structure,” said Ken Herbert, a Wedbush Securities analyst who tracks the aerospace and aviation industries. The company is working on controlling its costs, he said. Much of the TransDigm’s revenues come from sales in the commercial aviation after market. For the second quarter ending April 2, TransDigm reported net income of $55.8 million, or $1.05 per diluted share, on revenues of $311.3 million. That is a 46 percent increase from the net income of $38 million, or $0.72 per diluted share, on revenues of $206 million for the same period a year ago. Job cuts at Aero Fluid begin this month with 61 positions being eliminated, including in assembly, engineering and office functions, according to the WARN notice. Another 19 positions will be cut in August, and the last of the workers are to be dismissed in October, the notice said. The company will transfer the work to an existing plant in Painesville, Ohio, where Aero Fluid is headquartered. Several other TransDigm product lines also have moved to the Painesville location in the past year. The city has started working with CB Richard Ellis to market the building to a new tenant, said Brian Gabler, director of economic development for Simi Valley. “It is a unique space that would work well for a manufacturing operation,” he said. Officials from CB Richard Ellis declined to discuss prospective tenants. TransDigm holdings • Location: Cleveland, Ohio; local operations in Camarillo, Northridge and Valencia • CEO: W. Nicholas Howley • Employees: 2,400 • Market Cap: $4.44B • PE (ttm): 33 • EPS (ttm): 2.64 • Closing Price: (as of June 29) $88.86 TransDigm acquired Aero Fluid late last year with the $94 million purchase of Talley Actuation from TelAir International, a competing aerospace firm. Talley had been in the city for about five years. At about the same time as the Talley acquisition, TransDigm bought McKechnie Aerospace. Several months later, the company sold off the McKechnie fastener division — which included Valley-Todeco in Sylmar — to Alcoa in a deal valued at $240 million. “This is a good fastener business with solid prospects,” TransDigm Chairman and CEO Nick Howley said, in a February conference call with analysts. “However, it fits much better with Alcoa’s business portfolio than it does with ours.” In addition to Aero Fluid, TransDigm currently operates Dukes Aerospace in Northridge, Skurka Aerospace in Camarillo and Semco in Valencia. It’s unclear whether TransDigm has plans to shift its Skurka or Semco operations. Attempts to contact officials at those companies were unsuccessful. Dukes is a designer and manufacturer of fuel pumps, valves and cabin pressure systems. In June, the division received additional work and jobs after TransDigm recently closed a Mesa, Ariz., production facility, said Gid Herman, the head of sales and marketing. Herman would not say how many jobs transferred to the Valley. He also would not comment on whether there’s concern about Duke’s future as part of TransDigm, or on the parent company’s plans. In 2009, Camarillo-based Skurka added employees following an expansion of their 70,000-square-foot facility, said John Fraser, management assistant in economic development for the city of Camarillo. Skurka employs more than 140 workers, Fraser said. The company manufactures of electro-magnetic equipment for commercial aircraft, military vehicles, and naval and space systems.