Founder and President Douglas Carlberg sees continuous improvement as the key to post-pandemic growth in aerospace contract manufacturing.
Prior to launching M2 Global, Carlberg worked for various aerospace manufacturers of RF equipment, most recently as senior vice president of the global microwave communication division at Harris Corporation.
“It was all commercial, point-to-point microwave manufacturing and assembly,” he says. “They went through a restructuring and decided they were going to take all their manufacturing and send it to contract manufacturers. I ended up selling and spinning off a lot of their internal shops around the world. At the end, what was left started off M2 Global, which was their component group.”
Carlberg opted to buy the business instead of accepting a transfer to California. “It didn’t take me long to figure that one out, so I ended up buying M2 Global 20 years ago,” he says. “That’s how we started.”
M2 Global initially focused on RF components for radios, radar systems, and satellite uplinks. After 9/11, sales declined by about 50 percent, and M2 Global pivoted to contract manufacturing circa 2004.
“When it started to come back, our designs were reverse-engineered out of China, like everybody else’s,” says Carlberg. “That’s when I decided to get into the defense industry. I started out on the electronics side, then we had open capacity and a background in aerospace, so let’s start making aerospace parts. . . . We had precision machining to do these microwave components that was just ideal for aerospace.”
The move now looks prescient. “Aerospace is growing the quickest, for a lot of different reasons,” says Carlberg. “A lot of companies didn’t survive after this last go-round with COVID-19.”
He adds, “We are bidding stuff left and right for Bell, because one of their key suppliers filed for bankruptcy. I’m looking at picking up at least another $1 million this year and going into next year.”
The company manufactures out of its 27,000-square-foot facility on five acres in San Antonio. Customers include Collins Aerospace, BAE Systems, Lockheed Martin, General Dynamics, and Huntington Ingalls Industries.
M2 Global does machining, sheet metal fabrication, assembly, painting, anodizing, heat treatment, and other coatings in-house. “It’s all build-to-print,” says Carlberg. “We not only do DoD in the same shop, we do commercial, so we end up doing different value streams so you don’t burden the commercial stuff with the overhead that you have to put into DoD.”
A turnkey model has boosted the business, he adds. “We are basically vertically integrated. That’s why they like us. The difference is we do a lot of support work for R&D.”
He cites work on prototype helicopters for Bell: “We’ve been cranking out anywhere from eight to 12 new parts per week for the last 18 months.”
Carlberg has been involved with the Shingo Institute at Utah State University since the 1990s and now serves on its advisory board and is an examiner for the annual North American Shingo Prize for Excellence in Manufacturing.
“We have applied a Toyota Production System to a high-mix, low-volume operation, and we’ve done it very efficiently, he says. “That’s our secret to success. Instead of a horizontal supply chain, we decided to be a vertical supply chain, where everything is here.”
He continues, “It’s a continuous journey. We started back in our Harris days and then we just continued to fine-tune the skill set to implement the Toyota Production System in a high-mix, low-volume shop, which is very difficult to do.”
After a flat year in 2020, the company bounced back in a big way in 2021 and was recently named Small Business of the Year by Bell Textron and one of Lockeed Martin’s top 25 suppliers (out of about 1,400), among other accolades. “During that period, we basically had 100 percent quality and 99.6 percent on-time delivery,” says Carlberg.
Due to such lofty metrics, business has been good and the forecast is even better, he adds. “We’ve been growing on a year-to-year basis. Going forward, we’re looking at double-digit growth here for the next five years.”
Challenges: “The biggest challenge we’ve got going forward is the skilled workforce,” says Carlberg. “Skilled machinists is the biggest issue we have right now.”
In response, M2 Global is working with the San Antonio Manufacturers Association, local community colleges, Bexar County, and the State of Texas to foster a more robust pipeline of machinists through apprenticeship programs.
M2 Global hasn’t avoided supply chain issues. “Lead times are going out, prices are going up, and what we’re doing coming out of Washington is killing us,” says Carlberg.
Opportunities: Beyond aerospace and defense, semiconductor reshoring and “nearshoring” is an opportunity for the company, says Carlberg. “Right now, the big push is to bring all the semiconductor manufacturers back to North America as soon as possible,” he explains.
Applied Materials approached M2 Global to work with a maquiladora in Matamoros, Mexico, on assemblies for semiconductor manufacturing equipment. “They are bringing in it from Asia right now,” says Carlberg. “Go figure — it’s sitting in CONEX containers right now off the coast of California.”
But the current opportunities in aerospace and defense are a great match for M2 Global, he adds. “I’m getting calls right now asking me, ‘Do you have any open capacity?’ instead of me going out saying, ‘I’ve got open capacity. Do you have any jobs you can give me?'”
Needs: “We need good suppliers,” says Carlberg. “We need a good supply chain at the end of the day. We’re constantly looking for other suppliers that can be a backup. The last thing you want is sole-source on any supplier in this market.”
He adds, “The only way you’re going to get it is you’re going to have to get more business coming back to North America.”
Continued support of small businesses across the U.S. is another need. “If you take a look at the job generation, the majority of them come from small business,” says Carlberg. “It’s the entrepreneurs who are actually starting their business and taking the chance.”
