American group seeking to boost its business buys Raytheon’s factory in the Andalusia Technology Park (Parque Tecnológico de Andalucía, PTA)
It was the first company to buy a plot in the Andalusia Technology Park back in 1990. When the King and Queen of Spain came to inaugurate its factory, they must have been surprised that an American multinational company (Hughes Microelectronics as it was known then) had chosen that area of wasteland on which to build a military electronic components plant. 25 years later, not only does the principal player in the technology center maintain its firm commitment to Málaga, but it is in fact in the process of relaunching its business activities there. The plant, which employees 98 workers, belonged to Raytheon (an American industrial group that took over Hughes some time ago), but was acquired on 24 September of last year by American Industrial Acquisition Corporation (AIAC), which has set out to bolster its activities, mainly focusing on the defense and aerospace industry.
The new owners have renamed the factory Málaga Aerospace, Defense and Electronics Systems, S.A. (Mades). The inclusion of Málaga in its name is a demonstration that the company “wishes to maintain its connections with the city”, according to its new Managing Director, Jean Montalvan. Following the acquisition, which required approval by the Council of Ministers, an expansion plan was set in motion with the aim of making the plant a “benchmark for the manufacture of electronic systems in the defense and aerospace technology industry”.
WHAT ACTIVITIES DOES MADES ENGAGE IN?
Defense. Its main sector. It produces advanced electronic components for the main US and European military programs.
Aerospace. Its presence in this sector is still incipient and includes the A-400M (European military transport aircraft).
Industry. This accounts for 30% of its business activities. It has produced airbag control units, radars, fishing sonars and microchips used to monitor the movement of salmon in the Pacific Ocean.
AIAC’s arrival has breathed new life into the veteran electronics industry. To begin with, never before had it opened its doors to the press. The company was afraid of breaching the strict confidentiality requirements of its customers, who operate in the military industry. Now, the new owners cautiously propose “to establish links with Málaga society”. For example, they are considering collaborating with the University of Málaga.
The first initiative which the new management has undertaken is a round of visits to current and potential customers in the USA and Europe (the company exports 80% of its products). In this regard, the factory is embarking on a significant change in focus. Previously, it did not make direct sales; rather, it carried out internal assignments commissioned by its parent. Now, although it is going to continue manufacturing for Raytheon, it wants to acquire new customers.
According to the new Managing Director, during this new era, the plant is going to benefit from synergies with other AIAC group companies. This American industrial corporation is present in 15 countries, with over sixty companies and a workforce totaling 8,000. It specializes in acquiring viable companies with “some kind of challenge”, whether it be financial or at organization or market level. In the case of Mades, Montalvan clarifies that it is a profitable company “with no problems in terms of management or its products”.
In 2014 the former Raytheon recorded turnover of EUR 16 million, and this year it aims to grow by 10%, thereby remaining in profit. So what is the challenge? “To work in Spain for customers who are mostly based in the USA”, reveals the executive. “The military industry is strictly controlled and the customers within it are conservative. It is in this respect that I can help. I am going to spend time there opening new markets and, moreover, we are looking for a permanent representative”, he explains.
Maintenance of jobs
With regard to the employment policy, the new owners of the plant assure us that it is based on short-term maintenance and long-term growth. “We are currently focused on business development and that will naturally lead to more technical jobs being created”. We must not forget that in 2009 and 2010 the former Raytheon experienced several waves of redundancies.
Mades manufactures electronic cards, guidance and drive systems, sub-assemblies and other electronic equipment for critical applications which require an extremely high level of reliability. “If one of our products is faulty, it can cost lives. Our whole production system is focused on error prevention. Our defect rate is 25 parts per million. It is a very low rate which we have achieved thanks to our continuous improvement programs”, points out the plant manager.
From ‘microchips’ for pets to the military industry
The first product manufactured at the Mades (then Hughes) factory was a microchip for identifying pets. This was followed by others products like the airbag control module (a total of 1.5 million were sold). Following its acquisition by the Raytheon group, the manufacturing plant owners decided to pursue electronics for naval applications (radars and fishing sonars in particular). Later, in 2003, it became part of the Elcan division, which manufactured optical systems for aeronautics and defense. But in 2010, in the midst of the global economic crisis, after significantly reducing its workforce, it changed its focus to high-reliability electronic systems and won major contracts for the military sector in Europe and the USA.
No mass production is carried out in the plant. Rather, Mades engages in industrial craftsmanship, since it specializes in highly complex devices that Chinese factories are unable to produce. Due to confidentiality requirements, its managers are unable to disclose for which military programs they work or the final destination of its products. But we do know that names such as Eurofighter and A-400M appear on its service record.
Besides the defense industry, the company wishes to increase its presence in the aerospace field, which is currently in its infancy. In fact, AIAC is contemplating the purchase of another Spanish company to complement Mades in Spain. Moreover, the company manufactures electronic components for the civil industry. A curious example of this is ‘microchips’ for animals, which were the first product manufactured by the plant in 1992 and are still made there today, albeit no longer for pets, but rather for monitoring salmon stocks in the Pacific Ocean.