Gulfstream supplier LMI Aerospace Inc., once a significant manufacturing presence in Savannah, announced last week that it has entered into a merger agreement to be acquired by Sonaca Group, a global aerostructures company headquartered in Gosselies, Belgium.
“This deal brings our combined company to the forefront as a leader in the design and manufacture of complex aerostructures while working to diversify our global customer base,” said Dan Korte, LMI Aerospace chief executive officer.
“In addition, LMI and Sonaca have complementary product portfolios while largely serving different aerospace suppliers around the world, enabling us to better serve our customers.”
Sonaca Group CEO Bernard Delvaux said the addition of LMI supports Sonaca’s vision of expanding its capabilities in the United States.
“Sonaca and LMI have both distinguished themselves in the industry through capabilities such as wing movables, wing panels, complex fuselage and structural assemblies, and together we will be able to strengthen our competitive advantage in the global aerospace market,” Delvaux said.
The deal is expected to close mid-2017, subject to LMI shareholder approval as well as certain regulatory approvals and other customary closing conditions, according to LMI spokeswoman Amy Horton.
“Once everything is finalized, LMI will operate as LMI Aerospace – A Member of the Sonaca Group,” Horton said, adding that LMI headquarters will remain in St. Louis.
Ups and downs in Savannah
LMI opened its Savannah facility with five employees in 2003. As LMI Kitting LLC, the plant located on Coleman Boulevard focused on building fuselage skin kit assemblies that worked well with local business jet manufacturer Gulfstream Aerospace’s lean, just-in-time manufacturing process.
In 2006, the company added Aviation Partners Boeing as a client, producing a kit that supported the installation of winglets on the Boeing 737, 757 and 767 models. In May of 2011, the Georgia Department of Economic Development named LMI Savannah the Georgia Small Manufacturer of the Year for 2010 – a category designed for manufacturers with 150 or fewer employees.
In February of 2012, the facility was named Supplier of the Year for 2011 by Aviation Partners Boeing and, in December of 2012, was named 2012 Manufacturer of the Year by the Savannah Morning News. By the end of 2012, LMI’s local presence had grown from 28,800 square feet to 111,400 square feet and 55 employees. That same year, the company added a world-class, $3.2 million machining center, giving it the capability to do high-speed machining of aircraft aluminum.
A rapid decline
While 2012 was a banner year for the company, LMI suffered a reversal of fortune in 2013, reporting losses of $58.5 million compared to a profit of $16.5 in 2012. With those losses spilling over into early 2014, the company was forced to restructure its Savannah operation, shuttering the highly touted machining center it opened a little more than 18 months earlier.
In March of last year, LMI notified 20 of its remaining 32 employees that their positions would be eliminated as the company consolidated more of its assembly workto its St. Charles, Mo., plant.
By the end of April, LMI’s Savannah presence was down to 12 employees, where it stands today.
“The Savannah operation remains a distribution center in support of Gulfstream,” Horton said, adding that she doesn’t expect any change here as a result of the merger.
As for the company’s cavernous building on Coleman Boulevard, it’s likely that part of it will be leased to other businesses.
“It’s a large building and we’re not using the full space,” Horton said. “But its proximity to Gulfstream makes it an ideal location for us.
“We’re not moving.”
LMI Aerospace Inc. is a leading supplier of structural assemblies, kits and components and provider of engineering services to the commercial, business and regional, and military aerospace markets. Manufacturing more than 40,000 products for a variety of platforms and providing turnkey engineering capabilities to support aircraft lifecycles, LMI offers complete, integrated solutions in aerostructures, engineering and program management. Headquartered in St. Louis, LMI has 21 locations across the United States and in Mexico, the United Kingdom and Sri Lanka.
ABOUT SONACA GROUP
Sonaca Group is a global Belgian company active in the development, manufacturing and assembly of advanced structures for civil, military and space markets. The group is especially known for its capability to design and produce advanced structures such as wing movables and complex fuselages. Headquartered in Gosselies, Belgium, it has production facilities in China, Romania, Canada and Brazil. Sonaca Group also supplies engineering services, large sheet metal elements, wing panels, composite structures and machined components.
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