Finding route to success: Garmin growth doubles, triples

Jul 20, 2008 (The Wichita Eagle - McClatchy-Tribune Information Services via COMTEX) -- GRMN | Quote | Chart | News | PowerRating -- Garmin, the builder of navigation devices, has grown quickly since it was co-founded by a Wichita State University graduate in 1989.

The company is especially familiar in Wichita, where Cessna Aircraft and Hawker Beechcraft use its integrated, high-technology avionics suites on several models of aircraft. Cessna is Garmin's largest aviation customer.

John Doman, Cessna's vice president for worldwide propeller aircraft sales, calls Garmin's G1000 glass cockpit revolutionary for general aviation.

"It takes just so much of the anxiety out of flying an airplane," Doman said.

The G1000 replaced older, round gauges in aircraft and integrated all the primary flight, navigation, communication, terrain, traffic, weather and engine instrumentation onto large-format displays in the cockpit.

The device is a "watershed point in terms of the aircraft and how they're looked upon," Doman said. "Either you have old airplanes that have round dials, or you've got new-generation glass cockpits."

Cessna uses Garmin's avionics in the SkyCatcher -- its new light sport aircraft -- in its piston aircraft, in Caravan turboprops and in its entry-level business jet, the Citation Mustang.

The products give buyers a reason to trade up to aircraft incorporating the technology, Doman said. Last year, Cessna took orders for 272 Caravans, in part because it began offering them with the G1000, he said.

The company

Garmin was founded in 1989 by Gary Burrell a WSU electrical engineering graduate, and Min Kao , a native of Taiwan. (Thus the name Gar-Min)

The two were executives at the former King Radio in Olathe. They left the company and went into business together, convinced the future of navigation would be linked to GPS technology, which uses a series of satellites to track location, speed, position, distance and movement.

Garmin has been profitable every year since it opened. In 2000, it was incorporated in the Cayman Islands as a holding company to facilitate a public offering of its stock in the U.S.

Last year, all four business segments -- aviation, auto, marine and fitness products -- had either double or triple revenue growth.

It sold 12 million units in 2007 and recorded revenue of $3.18 billion, a 79 percent increase from the year before.

"Our success comes from innovation and bringing new products to market," said Garmin vice president for marketing Gary Kelley.

Garmin employs 9,000 people -- including 2,500 in Olathe -- nearly double its worldwide work force of 4,750 in 2006.

Garmin's automotive and mobile segment is its largest business. Last year, it expanded into the rental car market, supplying GPS units to rental car companies.

Garmin's aviation segment is its second-largest business, bringing in 13 percent of its revenue.

At its 980,000-square-foot headquarters on 42 acres in Olathe, workers do research and development, engineering, administration, product support, marketing, communications, aviation manufacturing, certification and customer support.

Inside its massive warehouse -- big enough to hold three Boeing 747s -- workers are aided by a series of conveyer belts to fill orders and ship products.

The company completed a 231,000-square-foot expansion to its warehouse this year. It's now adding an extension for more engineering offices.

Not far from the warehouse is a manufacturing area where automated production lines build circuit boards for the G1000 units. Workers inspect, test and complete the units in-house.

Upstairs, engineering offices are next to a series of workbenches. That way, engineers come up with a design, "then come out of the office to see if it's going to work," said Garmin spokeswoman Jessica Myers.

New ideas for aviation

The windows in Garmin's spacious hangar in New Century Aircenter near Olathe are obscured by frosted glass.

That helps keep proprietary work Garmin does customizing products for customers a secret.

When it's working on a confidential project, the company converts an office into a "war room" and shuts off a corner of the hangar.

"Nobody can get in," said Tom Carr, Garmin's manager of flight operations and its chief test pilot.

The hangar houses a variety of aircraft from Hawker Beechcraft, Cessna, Mooney, Cirrus, Diamond and others used for testing and certification of products.

A Beech Baron, for example, is used to test a variety of products at different altitudes and speeds. The right side of the panel pops out, and "we can install any display system we make," Carr said.

A Citation CJ2 was bought for autopilot development for Cessna's Citation Mustang and other planes.

The hangar is also where the company is testing its newest cockpit technology: synthetic vision.

"It's the hottest new technology to come along," said Cessna's Doman.

In a simulator in an upstairs office, Carr demonstrates how the new technology gives pilots a 3-D color depiction of terrain, obstacles and traffic on the G1000 flight display.

The avionics panel replicates what pilots would see outside the cockpit on a clear day. That helps them fly in poorer weather.

If a plane gets too close to an obstacle like a mountain, tower or radio antenna, the obstacle turns red on the display and an audio cue tells the pilot to change course.

"It knows time to impact," Carr said.

The technology lets pilots program in where they want to go and computer-generated guidance symbols highlight the route the pilot should take. It's like a big video game.

One market Garmin hasn't reached is products for business jets larger than a light jet. The next step is "to expand up," said Myers, although company officials wouldn't elaborate.

For Garmin to grow, it must continue to develop new capabilities.

"We'll continue to innovate and grow in the marketplace," Kelley said.

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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