Quality inspection of a part.
Ignoring the shifting winds of the North American trade deal as much as it can, Cyclone Manufacturing Inc. continues to look abroad.
The Mississauga-headquartered company, founded in 1964 as a machine shop, has been expanding almost constantly into the global marketplace since it began focusing intensively on manufacturing aircraft components in the mid-1980s.
"Aerospace is a global business. We're shipping components all over the world," says Andrew Sochaj, Cyclone's president since 1990.
The company expanded into Poland five years ago and is increasing its production facility in Mississauga by 80,000 square feet, a $65-million project that will be complete in 2021.
The global nature of aircraft manufacturing enables Cyclone to thrive as an exporter from its Greater Toronto Area base. In 2017 it earned the top prize at the Ontario Export Awards, which honour the province's businesses that are most successful in the international marketplace.
"We are competing against Mexico, against China, against India – a lot of the low-cost locations – so one of the main challenges is to be competitive in front of the OEM and the large Tier 1," says Daniel Dobrjanski, the company's vice-president of business development.
OEM stands for "original equipment manufacturer." In this case, the OEM would be the aircraft builder. Tier 1 companies like Cyclone send their manufactured components directly to the OEM, so it's an accomplishment for a Canadian manufacturer to hold its own against global rivals.
The company won't likely be affected much by the outcome of difficult talks with the United States and Mexico over renewing the North American free-trade Agreement, Mr. Sochaj says.
"We don't have any problems shipping to the U.S. Aerospace is governed by international aviation agreements," he explains.
Aircraft parts that are manufactured all around the world are often assembled into planes in the United States, so international agreements are structured to allow components to move back and forth between countries.
That makes trade in the aircraft parts sector relatively seamless compared with other types of goods and services that face barriers, Mr. Sochaj explains.
"Our products are not one-stop products, like potatoes or lumber, which you might ship into the U.S. and that's it," he says.
"Our parts might go from here to the United Kingdom, then to the U.S., then to Japan and then the U.S. for final assembly. Then the U.S. might send their finished products somewhere else."
The world's two largest aircraft manufacturers are Boeing Co., headquartered in Chicago, and Airbus SE, based in Toulouse, France, but both have maintenance locations around the world, and Cyclone is a supplier to both companies.
In October, Airbus acquired a 50.01 per cent interest in Canadian-owned Bombardier Inc.'s C-series jet project. Bombardier is also a Cyclone customer.
As a global supplier of parts to virtually all major OEMs, Cyclone is built to withstand political moves like the attempt by Boeing last year to persuade U.S. authorities to slap duties of nearly 300 per cent on sales of Bombardier's Canadian-assembled C-series jets to American buyers.
It has turned out to be a hypothetical issue anyway, because, last month, the U.S. International Trade Commission ruled against the duties. But even if the outcome were different, Cyclone has customers everywhere and does not live or die by its Canadian sales.
"About 70 per cent of our product is exported outside of Canada," Mr. Dobrjanski says.
Indeed, in the fall, Peter Hall, Export Development Canada's vice-president and chief economist noted that after modest export growth last year, "our forecast is that aerospace exports will continue growing into 2018."
As a participant in a global supply chain, a company like Cyclone is well positioned within the aerospace sector, according to data compiled by Innovation, Science and Economic Development Canada.
More than 60 per cent of Canadian aerospace product exports were supply chain related in 2016, the government agency says, with engines, avionics and landing gear making up the bulk of Canadian exports.
Aerospace manufacturers invest more in research and development than any other sector in Canada, the agency adds.
As a company that bets its future on exporting its manufactured products, Cyclone is watching what happens in NAFTA and other trade negotiations, but it blazes ahead regardless of the outcomes of different talks, Mr. Dobrjanski says.
"I'm not really worried," he says. Global agreements like the new Comprehensive Economic and Trade Agreement (CETA) negotiated between Canada and the European Union or the Trans-Pacific Partnership (TPP) will make exporting marginally easier.
But even a collapse of NAFTA would only be a setback.
"We did okay before NAFTA and we'll continue to do well," Mr. Dobrjanski says.
"We're not a little machine shop any more."