🔒After more than a decade as Kaman CEO, Keating leaves behind a more diversified company

A chaotic 2020 seems to provide a fitting bookend for Neal Keating, who is leaving the corner office at Bloomfield aerospace and medical device component maker Kaman Corp. about a dozen years after assuming the role during the 2008 financial crisis.

Keating says the company, best known for making helicopters, will be in good hands when his successor — Ian Walsh, who most recently served as chief operating officer of Wisconsin speciality vehicle maker REV Group Inc. — steps up into the CEO role Sept. 8. That’s partly because of Kaman’s loyal and resilient workforce, which will ultimately lead the company out of the current dim economic climate, he said.

“Whether it’s a financial crisis, whether it’s this [pandemic] … , that resilience and support they’ve shown is something that we’re very proud of at Kaman, and it’s really served us well,” Keating said.

However, a pair of top-level decisions Keating made during his CEO reign appear to have put the company in a stable position ripe for long-term growth, he said.

That included a move early in his tenure to sell off the company’s music subsidiary — Kaman Music Corp. — to return the business to its roots as a designer and maker of highly engineered products, and a later decision to expand Kaman’s focus beyond aerospace and defense into medical and industrial markets.

Keating became CEO and board chair at Kaman less than a year after he joined the company in 2007 as chief operating officer. In addition to the pressure that naturally comes with leading one of Connecticut’s larger manufacturers with more than 5,000 employees, Keating was taking over a company with a prized history in the state.

Keating was only the third CEO in Kaman’s history. He replaced Paul R. Kuhn, who succeeded the company’s charismatic founder, Charles Kaman.

“He obviously had some big shoes to fill,” said Chris DiPentima, president and CEO of the Connecticut Business & Industry Association and a former manufacturing executive.

Having served as COO at industrial distributor Hughes Supply and CEO of aerospace manufacturer GKN Aerospace following a 24-year stint rising through the ranks at Rockwell Collins, Keating was no stranger to manufacturing or the C-suite. And his decision to sell off Kaman’s musical instrument business, which made guitars and sold other instruments, in 2008 marked a clear departure from his predecessor.

Keating now sees his decision to build up Kaman’s distribution business, and then to divest $700 million from it to re-invest in the company’s highly engineered products segment, as an inflection point in Kaman’s drive to enter the medical devices market.

Kaman’s acquisition of German manufacturer GRW Bearing GmbH in 2015 was the company’s entrypoint into the medical devices market.

GRW designs and makes super precision, miniature ball bearings found in hand-held tools used by dentists and surgeons.

“We felt [medical devices] provided us some market diversity that was important, and some longer-term trends that would provide higher growth than aerospace and defense,” Keating said.

The climax of Keating’s drive toward that diversification play came at the beginning of this year, when Kaman acquired California precision-parts manufacturer Ball Seal for $330 million, largely because about 45% of the company’s business is in medical devices.

When Keating started as CEO in Jan. 2008, the company’s stock price was in the $30 range. Today it hovers around $47.

A local focus

Despite the diversification efforts, it’s Kaman’s work in the aerospace market that has really connected the company with the state’s manufacturing community under Keating’s watch, DiPentima said.

“I think before Neal came on, Kaman was viewed by the small to mid-sized businesses as being a large company and not interested in them,” DiPentima said.

Keating changed that perception, becoming a fixture at trade group meetings for the Aerospace Components Manufacturers, and engaging directly with smaller aerospace manufacturing company CEOs, rather than leaving community engagement to a deputy.

He was also an active member of the CBIA, having served on the group’s board. In Jan. 2019, he keynoted the CBIA’s annual economic outlook forum, praising the state’s innovative past, while also urging business and political leaders to do more to recapture the state’s competitive edge.

“It’s important to celebrate Connecticut’s long history of innovation and entrepreneurship,” Keating said during the Jan. 4, 2019 speech. “Now it’s time to recapture that competitive edge. We have to turn Connecticut into the economic engine it once was. If you think about the world today, realize that a century before people talked about Silicon Valley, people talked about the Connecticut Valley.”

During more than a decade in Connecticut manufacturing, Keating has also watched the sector’s aging workforce shrink, a trend that is expected to worsen in the years ahead.

Keating said the state and its companies must double-down on education and training.

“We have to recognize that our competitiveness is based on not just the engineering expertise we have; but the technicians, the machinists, the mechanics, everybody that works in manufacturing,” Keating said. “And we have to provide the apprenticeship programs, we have to provide better community college training opportunities.”

As Keating prepares to spend more time with family, travel and train for an Ironman triathlon, Kaman is still experiencing pandemic-related challenges.

Like aerospace manufacturers all over the world, Kaman has seen profits fall since the COVID-19 pandemic led to lower demand in the industry. The company posted a $100,000 loss in 2020’s second quarter, largely a result of the downturn.

In a July earnings call with investors, Keating said that while commercial aerospace and medical device component earnings fell, the company’s defense business — which accounts for about half of Kaman’s revenue — remained steady.

Despite the recent downturn, Keating says he’s confident his successor, Walsh, will follow in his footsteps of successfully taking the reins and growing the company regardless of crises surrounding it.

“My fervent hope and strong belief is that you will be writing about Kaman two, five and 10 years from now, with headlines that underscore the strength of the company,” Keating said.