After a turbulent 2009, Duluth's Northstar Aerospace is poised for a full recovery
Most call it the recession. John Eagleton calls it "the day the end of the world came." Eagleton is president and CEO of Northstar Aerospace, a Duluth airplane component manufacturer. For the last 10 years, he led his company to achieve 200 percent annual growth--a rate
that had landed it on Inc. magazine's list of the 500 fastest growing privately held companies in the United States for three of the last five years.
However, when discretionary spending in the general aviation industry came nearly to a halt at the end of 2008, a decade's worth of growth and investments came crashing down around the company. In 2009, Northstar Aerospace's revenues plunged to a mere quarter of its 2008 sales
Layoffs were unavoidable, and Northstar Aerospace was ultimately reduced from 115 to 20 employees. Requesting interest-only payments on capital expenditures also was essential in keeping the business afloat. The quick alignment of expenses and revenues helped save Eagleton's
"I learned in entrepreneurial school that there are three things you must do when you run a business: Don't run out of cash, don't run out of cash, and don't run out of cash. That's what got us through," Eagleton says. "You never expect such a dramatic impact on a company
as people experienced, but many of those [companies] who were not in a good cash position--or [had] management who delayed making tough decisions-- are not around today."
The 50-year business veteran has since shared his expertise in Washington, D.C. In December, Eagleton was nominated by Congressman Jim Oberstar to convene with President Barack Obama and 130 other U.S. CEOs at the White House. Representing Minnesota's private sector, Eagleton
said that increased orders would be the most critical factor in recovering the nation's manufacturing jobs.
"If you gave me a million dollars tomorrow, it won't have me hiring any workers," he says. "What I need is orders. Orders come from people who have confidence in the future, and you've got to get rid of the uncertainty. That was one of the messages that I brought to the
president, and I firmly believe that."
Eagleton was pleased that President Obama's State of the Union address incorporated many suggestions and ideas from the half-day meeting, including a tax credit for job hiring and a credit for capital gains on new investments.
Today, orders are increasing at Northstar Aerospace thanks to signs of life in the economy and the company's continued diversification efforts in the wind energy and medical device industries. The company manufactures precision-machined components, parts and assemblies for
wind turbines, plus components for medical device manufacturers. Eagleton expects this year's sales to be double those of 2009, with a full recovery of its work force and sales figures by 2012.