When Lidia and Jerzy Gorko decided to buy a fading Van Nuys parts supplier 20 years ago for $45,000, several workers were on the verge of retirement and all the equipment was low-tech. So what interested the Gorkos? They took a look at the past roster of clients Rocketdyne, Litton and McDonnell Douglas and made a plan to turn things around.
“We computerized the files and analyzed which jobs lost money and where the man-hours on the shop floor were going,” said Lidia Gorko, chief executive of Gorko Industries and Technologies in North Hills. “Within a year we had orders from Rocketdyne for their Atlas and Delta rocket programs.”
Gorko Industries builds machine parts for the aerospace, aviation, defense and medical industries. The emphasis on tech-savvy production goes back to 1986, when several CNC (computer numerically controlled) milling machines were added to the manual lathes and die cutters that came with the shop. Since then, the company has invested into the six figures worth of machinery that can make odd-shaped parts; one machine does its cutting through an electrical discharge instead of traditional blades.
Gorko builds each part to customer specifications from detailed blueprints. It sometimes farms out portions of the job, such as plating or casting, to save time and money. Jobs take anywhere from four weeks to six months, often depending on the availability of exotic alloys such as stellite and Hastelloy.
And the work can be extremely precise; one stainless steel aircraft part must have tolerances in the range of 1/20th the diameter of a human hair.
“CMMs (computerized measuring machines) tell us every dimension on the parts we build and whether they’re in tolerance with the client’s blueprint,” Gorko said. “We use high-powered microscopes to check the surface finish of parts and optical magnifiers to check edges for burrs or imperfections. Clients will bring in their own inspectors to ensure the parts are suitable to ship.”
Industry consolidation has narrowed the field of companies capable of handling these specialties. Randall Keepers, a principal buyer with Fairchild Controls Corp. in Frederick, Md., said that as recently as eight years ago, the company had an approved vendor list of 2,500 suppliers. “Today it’s down to 300 suppliers and we expect all those firms to stay profitable and competitive,” he said. “Gorko has mastered data management of each order. They have a 100 percent rating for on-time delivery and quality. In this industry, that says a lot.”
Buying companies
Lidia Gorko, who came to California to manage a friend’s Pasadena apartment building in 1978, once planned to teach English in her native Poland. Her husband, Jerzy, also from Poland, was a machinist working in Orange County. At first, Lidia tracked the orders and Jerzy ran the shop. (The couple separated in 2001 and Jerzy left the company.)
Gorko Industries hasn’t spent much money on marketing, instead buying moribund companies and resurrecting the client base through new technology.
In 1997, the company paid $1.2 million for Cal-Swiss, a 50-year-old Pasadena-based maker of high-precision miniature components much smaller than anything Gorko had produced up to that time. Cal-Swiss’ customer list included Parker Hannifin Corp. and Pasadena-based Konigsberg Instruments Inc., which develops lab-testing instruments for medical applications.
Two years later, Gorko paid $250,000 for Price Engineering to secure new contracts with Goodrich Landing Gear. When Goodrich needed a European parts supplier for its Airbus contracts, the Gorkos borrowed against their homes and bought a machine shop in Poland for $700,000. They later sold the Polish shop for more than $1.5 million and used the cash to pay down loans.
Although growth has been modest, around 15 percent per year, Gorko said she has 200 to 300 jobs in varying stages of completion.
“The only way we could take on more work,” she said, “is to add a night shift and/or increase the size of the shop by at least 8,000 square feet.”
No single client accounts for more than 10 percent of overall orders, lest the aerospace industry enter another downturn. In 2000, an industry slump forced the firm to downsize from 55 to 28 employees. The current workforce is 35.
“We’ve distinguished ourselves from our competition by figuring out how to use technology to build the parts other shops deem too complex or costly,” said Gorko. “Our customers will approach us when they’ve tried to build a part with someone else and still can’t get it right. We enjoy the challenge of building something no else can.”
*Gorko Industries and Technologies
Year Founded:
1986
Core Business:
Building components and assemblies for aviation, aerospace, defense and medical applications
Revenue in 2003:
$3.3 million
Revenue in 2004:
$3.5 million
Employees in 2003:
35
Employees in 2004:
35
Goal:
Adding 8,000-16,000 square feet of additional shop floor space; investing $2.5 million in larger CNC technology to meet client demand
Driving Force:
Complex job orders that drive innovation and new technologies on the shop floor
