|Aug 23, 2011 --
Outline of Need
Oregon Aero, a small manufacturer in rural Columbia County, was flying high in 2005, when they were awarded a large military contract to supply combat helmet pad systems. “We develop foam and other materials to use in combination with very specific shape designs to create what has been described as ‘High-Tech’ products masquerading as ‘Low-Tech,’” owner Mike Dennis said.
“Our materials are very different from anything else on the market,” Dennis explained. “We’ve created and engineered the product from the molecular level,” he continued, demonstrating how Oregon Aero’s foam converts kinetic energy into heat to dampen shock and provide 25 times the protective deceleration of average padding.
This life-saving difference is not lost on the pilots, military clients, and many others who consider these to be the benchmark for certain aviation and military safety products. Among these items are seats for airplanes and other vehicles; pads for chairs, helmets and headsets; and a number of other custom-made items to improve comfort and eliminate injuries from extended periods of sitting, standing or repetitious work.
After ramping up facilities and production for helmets and other gear in 2006, however, Oregon Aero took a big hit. “We had a huge contract get canceled right when the economy was about to take a dive,” Dennis recalled.
How Rural Development Helped
To allow the company to refinance debt, improve cash flow, and access working capital for development of new products, USDA Rural Development provided Oregon Aero with a Business and Industry (B&I) guarantee for a commercial loan in 2008. The 80-percent federal guarantee provided their private lender with added loss protection, alleviated stress on the bank’s capital reserves, and allowed them to take on a large loan that fully met the needs of the customer.
According to Mike Dennis, accessing credit as a rural business can be extremely difficult, but the B&I guarantee helped free up the capital Oregon Aero needed at a critical time. He does not mince words about the value of the B&I program. “Without it,” Dennis said, “this company would not exist today.”
With the refinancing package in place, Oregon Aero was then able to refocus on their core line of aviation seating, while developing a number of new products. Today, they remain one of the largest, highest paying employers in Columbia County and have added more than 15 new jobs since restructuring their financing. Currently, the company injects more than $6 million per year into the local economy through wages alone.
Moving forward, Mike Dennis’ innovation and vision are propelling Oregon Aero toward a new and very promising market. Their 20-plus years of developing products that sync with the mechanics of the human body, prevent injury, and increase comfort have led the company to identify ground-breaking new medical applications for their custom padding. Chief among these is a hospital bed liner that prevents bedsores, a common cause or contributing factor in countless patient deaths and escalating health care costs. For the product, Oregon Aero custom manufactures a specialty foam that eliminates damaging pressure on the vascular system.
According to Mike Dennis, this one product, alone, proposes to take the business to new heights. “It takes 178 hours to make each pad, and we’re the only company in the world that makes it,” he said. “It’s unlike anything else.”
Program: USDA Rural Development B&I Loan Guarantee
Partners: Community Bank
Congressional District: 1
Location: Scappoose, OR
Jobs Created and Saved: 85 family-wage jobs with benefits
Community Impact: More than $6 million in wages into the local economy
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