Canadian Manufacturing

Heroux-Devtek hiring to complete Boeing landing gear contract

Components for the landing gear will be made at facilities in Cambridge, Ont., Laval, Que. and two locations in Ohio



MONTREAL—Aerospace manufacturer Heroux-Devtek is beefing up its workforce as it prepares to build the world’s tallest landing gear for Boeing’s 777 aircraft.

The Quebec-based company plans to hire about 40 workers over the next six months to increase its workforce dedicated to the Boeing 777 and 777X to about 160.

Components for the landing gear will be made at facilities in Cambridge, Ont., Laval, Que. and two locations in Ohio. They will be shipped and then assembled in Everett, Wash., in a plant that will employ about 15 workers a few kilometres from Boeing’s assembly facility, Heroux-Devtek said.

At more than six metres high, the landing gear must be assembled nearby because they are too large to be trucked and pass under bridges, said Heroux-Devtek CEO Gilles Labbe.

“We picked a location where basically we’re very close to Boeing and there’s no bridges,” Labbe said after the company’s annual meeting.

Heroux-Devtek (TSX:HRX) is investing $105 million to build or expand facilities for what will become its largest customer.

Boeing generates less than 10 per cent of Heroux’s revenues from work on the Boeing 787 and military programs. However, it will replace the U.S. Defense Department as Heroux-Devtek’s largest customer once work on the 777 begins in 2017 and the 777X follows in 2020.

Heroux-Devtek is expected to supply more than eight sets of Boeing 777 landing gear a month or 100 per year.

Heroux-Devtek said its relationship with Boeing will help generate $500 million in annual revenues by fiscal 2019. They rose 34 per cent last year to $364.9 million.

The company is also anticipated to get a boost from business jet programs for Embraer and Dassault, Airbus and Sikorsky helicopters, along with military programs including the F-35 Joint Strike Fighter.

Labbe said he expects a decision on Canada’s order for the fighter to be made following the federal election. But he declined to say whether he’s concerned that a Liberal or NDP government may cancel the contract.

“Even if Canada does not buy it, it’s still a program that is growing,” Labbe said, adding that more than 3,000 airplanes are expected to be built over 20 years for air forces around the world.

Heroux-Devtek said Friday that its financial year is off to a good start as revenues rose 13.7 per cent in the first quarter of its fiscal year to $98.2 million. They were helped by the lower value of the Canadian dollar and a strong commercial aerospace market _ which accounted for 52 per cent of first-quarter sales.

Commercial sales during the quarter rose 18.8 per cent from the same time last year to $51.5 million, while defence sales increased 8.6 per cent to $46.8 million.

Heroux-Devtek’s profit rose to $4.5 million or 13 cents per share from $3.5 million or 11 cents per share. Adjusted net income rose to $5.5 million or 15 cents per share from $3.8 million or 12 cents per share.

The company expects revenues will grow by 10 per cent this year as healthy commercial aircraft demand compensates for flat military sales.

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