Small companies are part of chain
Finding skilled machinists is ongoing issue
There is little margin for error for the machinists at Nichols Precision in Tempe.
The mission-critical parts they make for aerospace and defense contractors have to be precise, with a fit-tolerance sometimes as slim as one-tenth of a human hair, said Dante Fierros, Nichols president.
“We work on everything as if lives depend on it,” he said. “When you spend millions on a satellite you don’t want a $50 part to fail.”
Nichols Precision, with 25 employees operating in a 25,000-square-foot facility, is one of the many small businesses in Arizona that depend on the aerospace and defense industry to supply work.
A Greater Phoenix Economic Council report from earlier this year estimated there are 2,000 companies statewide and more than 800 in metro Phoenix working in the aerospace and defense sector.
The state’s largest contractors — Raytheon, Boeing, Honeywell and General Dynamics — were awarded more than three-quarters of $13 billion in aerospace and defense contracts awarded to Arizona oper- ations in 2012, according to the GPEC report. That leaves $3.25 billion for close to 2,000 other companies statewide.
That includes hundreds of machining companies, said Fierros, who is also president of the the Arizona Tooling & Machining Association.
Nichols Precision, started in 1997 by Bob Nichols, has fabricated parts for the Mars Rover, military jets and a trigger mechanism for an anti-tank missile. About 90 percent of its work is related to aerospace and defense, said Fierros, 67, who bought the company in 2007.
The machining industry has been affected in Arizona by federal spending cuts linked to sequestration, but that has been tempered by fewer suppliers that survived the recession, he said.
Steve Macias, Arizona Manufacturers Council chairman, said that manufacturers used to begin tooling up for a project once they had been selected in competitive bidding, but now with the way things are in Washington they are unwilling to invest until they receive the federal funding.
“The flip side is that eventually some of these things will get funded and then it’s a fire drill to get it done,” said Macias, co-owner of Pivot Manufacturing. “Planning goes out the window.”
There has also been downward pressure on pricing since the recession, he said.
Fierros of Nichols Precision said his company has stayed