Staying Viable In The International World of Manufacturing

How Jim McGregor put Microtech back on track

It was 1978, and Microtech, Inc.’s current vice president, Jim McGregor, found himself moving to Connecticut, preparing to take on a company that had more problems than solutions. As McGregor became further involved in the organization, the breadth of issues became apparent. Problems ranged from jobs that were questionably priced to an upper management that belligerently micromanaged employees’ daily activities. Here, McGregor shares how he turned a challenging situation into an opportunity for sustained growth, all the while navigating the shaky terrain of international trade.

At the time, we didn’t know what we were doing. It was 1978, and we were all very young and very green. Unfortunately, my predecessor had left the company with only two major customers and it was struggling with numerous quality issues. Then, to make the situation worse, one of the two customer’s market disappeared … We had a ton of work to do.

First, we ended up hiring a quality assurance [representative]. Then, I started hitting the streets looking for any customer that could possibly need our product. I also looked into changing the management culture. I have always felt it was important to always maintain yourself and keep yourself in check. It’s about treating employees like human beings; they are one of our most important assets.

In 2012, Microtech celebrated its 58th anniversary as a designer and manufacturer of flexible and rigid waveguide assemblies and related passive microwave components. Our wide range of products are used both in the commercial and military markets as an integral part of radar and communications systems. When it comes to remaining a viable manufacturer in the United States, it takes vertical integration, the product, short-term cash flow, and the human factor. We have the ability to do as much under our roof as possible. This definitely gives us the ability to react quickly to changes.

Our product is more about craftsmanship than technology. Both have helped insulate us from competition from low-manufacturing-cost territories. We have always placed a significant focus on short-term cash flow and progressive growth that is not too aggressive. Without effective management of short-term goals, long-term goals are not possible. Your priorities and your goals for the company need to be straight.

I tend to be a “fatalist” when it comes to predicting future market conditions.  We are impacted directly by changing defense projects. However, the major current issue is us being precluded from overseas markets because of archaic US regulations. The current International Traffic in Arms Regulations that was developed during the Cold War to protect intellectual property is a significant deterrent for international customers to come to us—the paperwork bureaucracy is too time consuming and costly. Even though the majority of our international business comes from fellow NATO countries, customers are choosing to use local manufacturers even if the product cost is higher.

Although the US Commerce Department, whose job is to encourage international trade, declassified our product 20 years ago, the Department of State still wants to know what systems our products are being used in. We keep hearing our government officials talk about jobs, jobs, jobs … They are precluding us from creating jobs. However, thanks to the recent satellite-communication boom, we are having much success. Building satellites is now a commercial necessity. We are confident that will make us a viable and very necessary company for years to come.