Given Enough Hard Work, Success is Assured
Across languages, cultures, religions, and time zones, Moog’s philosophy that people do their best work in an atmosphere of mutual respect and personal responsibility travelled intact.
Within the next ten-year span, Moog’s sales grew from $135 million in sales in 1980 to $307 million in 1987. In 1988, cost estimates on a number of fixed price contracts for developing new technologies grew dramatically during the course of the year while at the same time; transitions from the programs’ development phases to profitable production status were delayed. The combination caused the company to report a loss of nearly $14 million.
In 1988, Bill Moog turned 72 years old and opted for semi-retirement. Turning in his stock to the company in exchange for Moog’s Industrial Division, the company’s founder turned over leadership of the company to Bob Brady, President of the company’s Aerospace Group.
A leader is measured by the quality of his followers. Bill Moog was a magnet for people who wanted responsibility and challenge. It was rarely necessary for him to look for help. The finest machinists, engineers, and administrators in the world wanted to work at Moog.
Bob Brady started at Moog in the mid-1960’s after graduating from MIT and Harvard and serving as a Naval officer involved in shipbuilding. Bob Brady formed what, ultimately, proved an indomitable team–Joe Green, Dick Aubrecht, Bob Maskrey, Phil Hubbell, Bing Sherrill, and Bob Banta. The seven men guided the company through the difficult last two years of the 1980’s and well into the millennium.
Beginning the 1990’s with sales just over $300 million, the company was faced with an uncertain U.S. defense budget and, along with the fall of the Berlin Wall, the certainty of a recession overseas. It took two years for the full effect of these circumstances to affect Moog’s earnings. In 1992, the U.S. Congress decreased production on the B-2 and terminated production of the F-15, F-16, Maverick and Small ICBM programs, among others. At the same time, Europe was reeling from the effects of its reunification. Because of these conditions, Moog suffered a 24% reduction in work force, and a 19% reduction in facilities, reporting a loss of nearly $7 million. It took two years for the company to begin its recovery from these changed circumstances. Ultimately, Moog recovered in a big way.
Just as Bill Moog had used overseas subsidiaries to expand the reach of his business, Bob Brady used focused acquisitions to turn the company’s fortunes around and to ensure that Moog had a viable future. Ironically, the first acquisition was the biggest and therefore the least likely deal to close, particularly given the company’s then-difficult financial condition.
Many people thought that AlliedSignal’s Torrance, CA actuation systems’ $78 million price tag, a sum that equaled nearly 30% of Moog’s annual revenues at the time, would be a showstopper. Even if Moog’s Board of Directors could be convinced the purchase was a good idea, who would lend the company that amount of money? What the naysayers did not consider was the respect that the local Western New York banking community had for the Moog leadership team.
The acquisition went through in 1994 and has been very successful. Two years later its addition gave the company the resources to repatriate Moog Controls Inc., the former Industrial Division spun off to Bill Moog in 1988, and the ability to adopt the role of “consolidator” in its specialized markets. New subsidiaries in Singapore and China added heft to the company’s Pacific Rim presence.
Technology gained from the various acquisitions included mechanical actuation through planetary gear trains for the maneuvering leading edges on aircraft. Carrier-based F/A-18C/D Hornets and F/A-18E/F Super Hornets fly with maneuvering leading-edge flap and rotary mechanical wingfold systems and the F-18 program has been one of the most successful fighter airplane production programs for Moog. The designs are produced at Moog’s Torrance, CA location, described above as a business acquired from AlliedSignal. Other F/A-18 controls designed and built by Moog include the rudder directional control valve, leading edge extension spoiler and servovalves that control fuel flow and configuration for the engines.
In the Industrial segment, Moog gained manifold technology, turbine controls, radial piston pumps, and high voltage electric motion controls. In Space, it acquired antenna and solar array pointing mechanisms and avionics. These new capabilities gave the company access to a number of new markets.
While these markets were coming on board, established businesses continued their evolution. The V-22 Tiltrotor also began its demonstration period with a successful first flight in 1989. The V-22 combines vertical tilt capabilities with fixed-wing aircraft speed and range. Moog supplies the primary flight control actuation, vibration control actuation system, utility actuators and components for the V-22 fleet.
During the flurry of launches that established the world’s space-based commercial communications constellations, Moog provided hardware for the launch vehicles as well as for the steering controls on the satellites themselves.
With the return of Moog Controls in the mid 1990’s, the company’s North American industrial business came to life, providing earnings growth. The industrial focus was on controls for plastics, turbines, simulation, test, heavy industry, metal forming, down-hole drilling, motorsports, textiles, paper and lumber mill markets benefitted from the return of Moog Controls to Moog Inc.
Engineers in Moog facilities around the world resumed collaborations, designing and manufacturing industrial products using precise machining tolerances, state-of-the- art production processes, and thorough product testing to guarantee precise control of critical machine parameters and long product service life. Engineers working directly with OEM customers took on the difficult engineering challenge in target industries which were beginning to transition from hydraulic to electric or combined hydraulic-electric systems.