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Duluth's SCS Interiors weathers aviation downturn with return to core clients
February 11, 2011
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  • By Will Ashenmacher

    February 7, 2011

    Mike Hudyma remembers October 2008 very clearly.

    That’s the month the national economic downtown caused Cirrus Aircraft to steeply decrease its production of new planes, leaving SCS Interiors, the business he owns with his father, David, with far fewer orders from its largest customer.

    “Having them be the lion’s share of the business, that was very dramatic,” Hudyma said. “It was a real, immediate problem.”

    At the peak of SCS’s relationship with Cirrus, Hudyma estimates the 16-employee operation was outfitting 10 airplanes a week with seat covers, carpeting and other interior upholstery. The decline in business from Cirrus forced SCS to face “a new reality.”

    But SCS used Cirrus’ halt in production as a chance to do some housecleaning and re-evaluating of its business model. In SCS’s case, that meant a return to providing upholstery to car dealerships, restaurants, theaters and auditoriums – the customer base SCS catered to before Cirrus.

    “What we didn’t do is invent new products,” Hudyma said. “What we did is go back to our core business.”

    Todd Simmons, Cirrus’ vice president of marketing, said that around October 2008, Cirrus went from producing 14 to 16 planes per week to fewer than four. Simmons said it was a pinch not only for Cirrus, but for its local suppliers as well.

    “Particularly in general aviation, the pool of suppliers is small. We’re all in this boat together. There aren’t a lot of other suppliers we can turn to, but there aren’t a lot of other buyers they can look to either,” he said.

    Simmons said healthy local suppliers are integral to Cirrus because having such firms in the area reduces transportation costs, and easier contact makes for increased adaptability and responsiveness.

    “To the extent that we can foster that, great,” he said. “But when you hit a national economic downturn, the resources you have to do that dry up a little.”

    SCS Interiors began working with Cirrus on prototypes in 1995. By 2001, Cirrus had become the most substantial part of its business, requiring SCS to purchase new equipment like high-speed sewing, embroidery and heat-stamping machines to keep up with demand. Hudyma said the dive in orders from Cirrus hasn’t meant that equipment has gone to waste.

    “That’s the beauty of the sewing machine,” he said. “You can sew a theater seat cushion as easily as you can an airplane seat cushion.”

    The recession also opened up new markets for SCS Interiors. Faced with smaller pools of customers, Hudyma said, many businesses opted to improve what they had rather than buy new upholstered materials. Car dealerships wanted to patch cigarette burns in seats rather than replace them entirely, for example, and restaurants wanted to update sections of shabby carpeting instead of the whole thing.

    “Those are perfect markets for us,” Hudyma said.

    Still, some suppliers have been able to stay the course, even with Cirrus’ slimmed-down production. Terry King, the operations manager of American Precision Avionics, said his company, which makes the wire harnesses that connect the components of Cirrus planes, saw about a 50 percent decrease in orders from Cirrus after Cirrus cut production. King called 2009 “not the greatest” year for the company.

    “We were able to keep our head above water,” King said. “We did have to weather some attrition, but it wasn’t a one-day ‘We’ll let this many people go’ decision. It was more like a person saying ‘Hey, I got this new job in Minneapolis’ and we said ‘Thank you for your service.’ We didn’t backfill.”

    King credits Cirrus’ open lines of communication with its suppliers for not needing to try branching out.

    “I give Cirrus a whole lot of credit for operating their business in the environment they have been,” he said, citing frequent conference calls with Cirrus executives to forecast the outlook for business. “They bend over backwards.”

    DULUTH NEWS TRIBUNE2011-02-07false