By Eric Peterson | Apr 02, 2023
Covers for military and civilian aircraft
Ron Kensey and Paul Kennon Chaney founded Kennon Products in a Los Angeles garage in 1984. Inspired by reflective insulation, they started making sun shields for private planes as a side hustle.
"We started with general aviation," says Wright, noting that the company relocated to Wyoming in 1989 for "quality-of-life" issues. "It was really just one product and that is sun shields. The intent was to keep the cockpit cool during the summertime. That gradually morphed when we got to Sheridan to other products for the northern climates."
Kennon expanded from general aviation into defense after the company supplied sun shields to the U.S. military during Operation Desert Storm in the early 1990s. The company began pursuing Small Business Innovation Research (SBIR) funding in 2006.
Serving as CEO since 2015, Wright was Kennon's third engineer when he joined in 2010. Now the company has 10 engineers on the payroll. "Part of our revenue comes from the engineering side," says Wright. "We do a lot of R&D and development for not only the Department of Defense, but the various primes like Lockheed, Sikorsky, Northrop Grumman, et cetera."
2010 was also the year Kennon entered the healthcare market. The company developed a soft suicide prevention door for the Sheridan Veterans Affairs Medical Center. It led to a broader national market of behavioral health units.
"At that point, we didn't know anything about healthcare -- we were an aviation, aerospace-related company," says Wright. "In 2019 before the pandemic hit, it actually overtook military as our largest product. We sell them all over the U.S."
The diverse markets buoyed the company when the COVID-19 pandemic arrived. "Healthcare pretty much fell off the map 2020, 2021, even 2022, and the other areas were able to pick up the slack," says Wright.
The company continues to use the SBIR program to drive product development. "This sounds kind of bad, but we're pretty good about using other people's money to develop a product that we can manufacture here in Sheridan," says Wright. "That's really the intent when it comes to the engineering side of the house, and it's proved pretty important over the last several years during the pandemic."
An example: Kennon is launching a line of life preserver units in 2023. "That was derived from SBIR," says Wright. "Essentially, what the U.S. Navy asked for was a smaller footprint for a very specific LPU [life preserver unit]. . . . We were able to satisfy the Navy's needs and then some, which is pretty exciting."
The company also developed thermal radiation shields for the windows on a Boeing KC-46 Pegasus for the U.S. Air Force. "It was a really interesting and challenging engineering feat," says Wright. "We've been producing those for the last two and a half years for the Air Force, and we'll end up getting another follow-on contract."
Since 2021, Kennon has manufactured at a purpose-built 35,000-square-foot facility in Sheridan, Wyoming. "All the manufacturing happens here, all the engineering happens here, and a lot of the prototyping that we do happens here," says Wright. "Now that we moved into the new facility, we added a little over $1 million in capex in the year we moved just to expand and vertically integrate some capabilities."
Wright notes that the operation is markedly different than many contract manufacturers in aerospace and defense. "We don't deal with metal -- everything that we do is textile- and composite-related," he says. "If you were to come in, you would see a lot of different sewing machines. A lot of the sewing machines, probably over the last three to five years, have become more automated -- think CNC."
The operation also leverages automation in the form of a CNC cutting table, a large-scale fabric carousel, and a 5-axis waterjet. Using the latter, cutting intake and exhaust covers and plugs for a squadron of F-16s, "Three days goes to three hours," says Wright.
Kennon has worked with the Manufacturing USA manufacturing institutes established by the Department of Defense, NASA, and other partners. "The DoD has recognized the importance of bringing manufacturing capabilities back to the United States," says Wright. "What's helpful for us is using those institutes to automate our processes."
Annual growth averaged about 20 percent from 2015 to 2019, then sales slowed during the pandemic and dropped from the peak. The trend reversed after two down years. "2022 overtook 2019, just barely," says Wright. "The long-range outlook looks pretty promising for us."
Challenges: "I feel like the biggest issue for us is uncertainty," says Wright. "There's really more uncertainty in all phases."
"With the government, the funding is a lot more delayed than it used to be," he adds. "From a contracting perspective, things are taking a lot longer than they were before, which impacts our ability to do business the way we like."
Opportunities: "I think there's a lot of opportunities with the way the world is right now with the Department of Defense," says Wright. "We've been pretty intentional in staying nimble and identifying opportunities that can help diversify our portfolio."
Needs: Cheaper capital. "The biggest thing for us is cost of capital," says Wright. "Ideally, we would be investing in our future and our growth and adding some capabilities to our equipment, but the cost of capital is 3X what it was three years ago."