The sturdy, beige medical shelters meant to blend in with the desert landscapes of Afghanistan and Iraq are an odd sight among the sea of aerospace and medical-device components scattered throughout Astro Manufacturing & Design's plant floor in Eastlake, Ohio.

The machining operation is modifying the 20-foot-long, 8-foot-wide metal boxes to fit CT scan machines from Philips Healthcare and ruggedizing the scanners so they can endure being transported across the rough battlefield terrain. The medical-device market comprises about 60% of the company's production, but it wasn't always that way.

Before 2000, Astro Manufacturing's primary product was automation and test systems for the auto industry, and its largest customer was Delphi. But in 1999, Delphi was spun off from General Motors Corp. and on the road to bankruptcy. The prospect of losing business from its main revenue source meant the company needed to retool its offerings. Astro Manufacturing's location near Cleveland and the region's burgeoning medical industry, anchored by the world-renowned Cleveland Clinic, made the medical-device industry a natural fit, says Rich Peterson, the company's vice president of business development.

Peterson arrived at Astro Manufacturing in 1997 after working at a local high-tech medical imaging company that was eventually acquired by Philips. His ties to the medical industry helped the company land a contract to complete construction of Philips' CT scanner beds. Astro Manufacturing's progress was dramatic. "We went from making 20 a month to 20 a week," Peterson recalls. "And that sort of made us realize in the 2003 timeframe that this is probably where we ought to position the company."

Around the same time Astro Manufacturing added medical-device manufacturing to its product mix, a northeast Ohio aerospace company decided to outsource some of its production and asked the company to produce the components. Now, in addition to making various medical systems ranging from surgery simulation equipment to orthopedic implants, Astro Manufacturing, with about $40 million in sales, also produces NASA space shuttle hatches and engine components for torpedoes.

Astro Manufacturing & Design in Eastlake, Ohio, modifies Philips CT scanners in a deployable medical military imaging system. The company entered the medical products market nearly 10 years ago after business declined for its primary customer in the auto industry.

Astro Manufacturing is the type of company many politicians and economic-development agencies would like to see other manufacturers emulate. U.S. Sen. Sherrod Brown, D-Ohio, has pushed for legislation that would provide loans to auto suppliers and other smaller manufacturers to help them transition to the clean-energy sector as they struggle to stay afloat amid the economic downturn. A few small auto suppliers have explored the possibilities. In August the Automotive Industry Action Group introduced a medical-device manufacturing program designed to help suppliers retool their product offerings. In the chip fabrication sector, Taiwan Semiconductor Manufacturing Co. announced plans in December to branch out into the solar and LED lighting industries as growth in the semiconductor industry has slowed (see "Taiwan Semiconductor Sees the Light").

But entering an entirely new industry might not be so easy for most manufacturers. Unless it's an application that can utilize the company's core competencies, switching gears to a new endeavor is unlikely, says Cliff Waldman, an economist with the Manufacturers Alliance/MAPI, an Arlington, Va., trade organization. "I would imagine it's fairly rare," he says. "People are not going to suddenly open up things brand new to them in a down economy."

Most manufacturers won't branch into new product categories because they require capital investments, expertise and careful planning. An exception to the case is manufacturers that can tweak their current product offerings to meet demand for a similar application in another industry, Waldman says. For instance, a manufacturer that makes gears for the auto industry might be able to transfer that knowledge to gears for wind turbines, says Nabil Nasr, director for the Golisano Institute of Sustainability at the Rochester Institute of Technology. "They are still in the same business but making that product for a different application," he says. In a sense, that's what Astro Manufacturing did. Being a machine shop, the company's transition did not require significant training but did involve more collaboration with the customer, including training on new machines (see "Cozy Up to Customers").

View article on one page