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UK Weapons Parts Maker Masses in Irvine

A British aerospace and defense company is combining three of its Orange County military units and moving them to the Irvine Spectrum.

Meggitt PLC is taking over a 157,000-square-foot complex that is headquarters to Kia Motors America Inc.

The automaker is moving to a new campus under construction.

Meggitt is consolidating operations in Irvine, Tustin and Fullerton in the move. Work at the three plants, which each have 50,000 square feet or more of space, includes design and production of ammunition system parts, weapons training products and military decoys.

The Meggitt units together posted more than $80 million in revenue last year. They employ about 250 people.

The move to the Irvine Spectrum is expected to be completed in early 2007. It will follow the exit of Kia, which is building a 236,000-square-foot headquarters for its U.S. operations along the Santa Ana (I-5) Freeway in the Jamboree Business Center.

With military upgrades fueling expansion, combining Meggitt businesses will streamline operations, giving it room for growth and raising its profile locally, said Michael Quinn, president of the company’s Irvine office and chief operating officer for the combined companies.

“It’s logistically convenient to make this kind of a co-location,” Quinn said.

The three units will form Meggitt Defense Systems Inc.

They’ve posted sales growth of about 17% annually during the past few years, with their employee counts up about 25% during the past year and a half.

The company has plans to double sales and employees during the next three years, Quinn said.

Meggitt expects to make an acquisition in the defense and aerospace sector during the next 12 months or so, he said.


Recent Buy

The Irvine unit was the most recent OC acquisition for Meggitt. In late 2003, Meggitt spent about $45 million to buy the Irvine operations and a cooling equipment company in Corona from Charter PLC in London. Meggitt bought its other two OC defense units in the 1990s.

Meggitt Western Design in Irvine makes equipment that automatically moves ammunition into place for firing. The operation also produces temperature control systems for tanks and other vehicles.

Its Tustin unit designs and makes targets that are used in military training. It also makes decoys.

Meggitt’s Fullerton operations, called Cartwright Electronics, makes devices that detect incoming ammunition and weapons training devices.

Meggitt also owns Endevco Corp., a San Juan Capistrano maker of vibration-measurement instruments. It is part of Meggitt’s energy group and isn’t set to move.

Meggitt’s global defense group makes up about 40% of the company’s overall revenue. Sales rose by 16% during the first half of last year. Overall, the company was on pace to do more than $1 billion in sales last year.

The sprawling building in Irvine will reflect the size of the parent company, Quinn said.

“It’s raising the profile for our customers so that they have an understanding we have the depth of a billion-dollar corporation behind us,” he said.


One Roof

Combining the operations also will bring engineers together to jointly work on contracts.

Meggitt’s Irvine and Tustin operations focus on mechanical engineering while the Fullerton operation tackles electronic engineering. They each report financial results separately.

“When you’ve got separate profit and loss responsibilities, people looking … to help sister companies comes second,” Quinn said.

Combining the operations will help the company cut down on regulatory work, including Sarbanes-Oxley compliance, Environmental Protection Agency rules and Occupational Safety and Health Administration safety requirements. Meggitt also faces compliance rules from the Pentagon.

Quinn said the company chose to consolidate in Irvine rather than cheaper locales in Nevada or Arizona because it wanted to be close to its customers, including Boeing Co.

Still, operating in the area presents challenges, Quinn said.

Recruiting people from outside the region is tough with housing prices that are triple those in other parts of the country.

“The No. 1 problem is hiring engineering talent,” he said.

The company is looking to hire local college engineering graduates, who have roots in Southern California.

That’s a change: Historically, companies such as Meggitt have required a decade of experience before they’re hired, Quinn said.

Although the company has benefited somewhat from instability in the Middle East, the real growth driver is the massive military upgrade under Defense Secretary Donald Rumsfeld.

“A lot of the military’s equipment is now 25, 30 years old,” he said. “We are in the development cycle for the next generation of systems.”

Those programs include Future Combat Systems, a program that will link soldiers and vehicles throughout the military,one of the most ambitious projects ever for the Pentagon.

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