For a time, Penn Yan Aero had requests to refurbish so many piston airplane engines a year, it looked like the local business could easily double output – and profits.
The typical piston engine is rated to fly 2,000 hours, and rather than replace an entire plane after notching all that flight time, most owners elect to refurbish the engine. But pushing 400 engines a year through the rebuilding cycle didn’t net the results CEO Bill Middlebrook was seeking. Plus, his employees were working “crazy hours, hated each other and no one was happy,” the Class of ’95 alum said. So what would a business-savvy professional recommend when the service is in great demand, but supply is limited? That’s the question Middlebrook posed to a group of graduate students in the Keuka College Master’s of Management, concentration in International Business program (MSMIB) during an April visit to his family’s Penn Yan facility.
“Raise the price!” students chimed in unison, as Middlebrook and Dr. Yang Zhao, assistant professor of international management, affirmed.
The company’s shift to a more manageable – and profitable – strategy to repair or refurbish between 300-350 piston engines a year, at higher prices, resulted in restored employee morale, reasonable 8-hour days for all, and still-satisfied customers, Middlebrook described. Little did he know, however, that his management decision then, and successive ones to keep Penn Yan Aero operating at the same site where it’s been since his grandfather started the business in the 40s actually ensured the company could still survive after the terrorist attacks of Sept. 11, 2001 and the Great Recession that started in 2008-09.
“Half of our business evaporated overnight,” Middlebrook told MSMIB students, explaining that formerly lucrative customers could no longer sustain expensive weekend hobbies such as flying small Cessna or Piper planes.
“So, 40 employees will now do what?” asked Middlebrook, describing how Penn Yan Aero had to regroup.
After adjustments for some lost talent, the company’s focus has shifted to servicing engines for planes used in flight schools, businesses, some international customers and a few private executives still maintaining their “toys,” Middlebrook told students. But the aviation market is getting smaller, he said, describing how Penn Yan Aero’s biggest competitor in Long Island was purchased by an engine manufacturer who bought the plant, then shut it down. Further, today’s shaky economy carries other challenges, Middlebrook said, pointing out some $20,000-$70,000 worth of repaired engines sitting on shelves inside the plant because Penn Yan Aero does not ship back to customers without first receiving payment.
“It’s tough,” Middlebrook told students, adding there could be as much as $150,000 outstanding in accounts receivable.
When asked by a student what numbers would tell him to change the nature of his business, Middlebrook replied that Federal Aviation Administration regulations limit him from repairing any other non-flight engines in the same facility where airplane engine repairs are made. So Penn Yan Aero continues to excel at its meticulous service and reputation for quality. For example, Middlebrook expects his sales reps to be constantly updating customers directly on the status of their engines, and he considers it a “bad day” if a customer has to call to inquire on an engine status.
Touring the facility with students, Middlebrook explained numerous quality-control procedures in place and introduced employee veterans averaging more than 15 years each with the company. Students observed the “cart” system that ensures each engine and all its parts travels together from cleaning station, to parts, to assembly, to testing area – an approximately 7 – 10 business day process – before the engine is ready to ship back to the customer. While an engine manufacturer may specify which parts must be replaced, Penn Yan Aero has an additional list of its own, Middlebrook said.
While the company has made several investments in technological processes through the years, little about the piston engine technology itself has changed since the 50s and 60s, Middlebrook said. During his tenure, Penn Yan Aero moving its engine testing area from outdoors, on the back of a flatbed truck, to an indoor, soundproofed space where employees no longer have to endure the rigors of cold weather. Middlebrook makes use of security cameras and a large, flat-panel TV in his office, but it’s primarily to help track the location of various engines in repair or to observe if a group of workers are huddled over in one shop, it may be a sign there’s a problem with a machine Middlebrook needs to investigate. Elsewhere, flat-panel monitors display the status tracking of each engine currently in repair.
But no matter how the family business has changed through the years, Middlebrook told students, some business principles have remained the same.
“As my grandfather always said, ‘Take care of your customer, and they’ll take care of you.’”
Install a specialty digital printing press that could produce high-quality wine labels in batches of less than 10,000. Recruit young professionals to join the Penn Yan Rotary Club. Design a new brand strategy for a food service supply company with 75 years of local history. Introduce a video game for individuals with autism through a kickoff event where the crowd will source (fund) the project. Market Hunt Country Vineyard wines to prospective new customers. Promote a study-abroad program to campus students with a video.
These are just some of the recommendations that students in a Keuka College graduate program presented Feb. 20 and 21 to local merchants and business leaders as part of Dr. Yang Zhao’s Marketing for Managers class.
The students met with leaders of local companies or non-profit organizations to assess the needs of the respective businesses, then worked in small teams to develop marketing plans to address the primary issues. Each team conducted research, interviews, surveys, and financial analysis to develop recommendations for their clients. The students then created a formal marketing plans showcased them in Powerpoint presentations during the final week of the eight-week course.
The eight-week course is part of a one-year program where students earn a Master of Science degree in management with a focus on international business (MSMIB). The MSMIB is similar to an MBA, but with more practical application. Enrollment features a mix of American, Vietnamese, Chinese, and Lebanese students, as well as one from Lesotho.
According to Fredric Tassone of Syracuse, whose team prepared a plan to help the Penn Yan Rotary Club recruit six new young professionals each year, conducting surveys was the hardest part. However, after analyzing the data the research uncovered, the team recommended the club target new members in the 23-35 age range, one of three market segments they identified, and of the three, the one most likely to have the time and interest to join.
“We gave them the most feasible option, since they don’t have a lot of money to advertise, and with their networking focus, that’s probably the best way to build up the club,” Tassone said. (more…)
Editor’s Note: This is the third in a series of profiles of new, full-time faculty who have joined the Keuka community.
Back in the fall of 2006, Dr. Yang Zhao served as an academic adviser to four international students attending classes on the home campus in Keuka Park. Today, some 79 international students from 12 countries attend classes here, learning how to compare and contrast America with its global neighbors in background, economy, and leadership development.
This fall, after earning her doctorate and serving several years as an adjunct professor for Keuka, Zhao became part of the full-time faculty, teaching courses in economics and leadership to graduate students in Keuka’s Master of Science in management with a concentration in international business (MSMIB) program.
Her studies in China focused on economics, and she holds a B.S. in economics from Shangdong University of Finance and an M.A. in economics from Dongbei University of Finance and Economics. While teaching in China’s Qiqihar University, Zhao published seven research articles relative to strategic planning, management, marketing, economics and business to help entrepreneurs and companies to better serve their community. In 2003, she won the Outstanding Young Professor award, for the Hei Long Jiang province of China. During that time, she also served as an academic coordinator for the Keuka China Program (KCP) and assistant professor at Qiqihar University.
Here in the U.S., she has added an M.S. in management from Keuka, and just this summer, completed an education doctorate in executive leadership from St. John Fisher College. In addition to her many years of experience in international education, as a full-time and adjunct professor, Zhao has also spent seven years as a local business owner and entrepreneur working in property management. Her connection to the local business and community network, as well as related marketing and financial management skills, help provide what international learners and domestic students are looking for when they study at Keuka, she said.
“As a business leader, you have to understand the entrepreneur’s point of view, to understand how to help students start thinking as a future leader, not just a manager. That will help students to be successful in their career development,” Zhao said.