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Wednesday, April 1, 2009

Armand F. Lauzon, Jr., President of Chromalloy and CEO of Sequa Corp.

AM: Chromalloy has kept a fairly low profile over the years. Tell us what the company’s core business is.

Lauzon: Chromalloy is an independent supplier of technologically advanced repairs, coatings, and FAA-approved replacement parts for turbine airfoils and other critical engine components for commercial airlines, the military and industrial turbine engine applications. We have more than 4,000 employees and 25 major operations. We supply components, coatings and advanced manufacturing services to original equipment manufacturers, along with extensive engineering and component repair capability for commercial aviation, marine and land-based aero-derivative and heavy industrial turbine engines.

AM: Can you be a little more specific about your repair and MRO work?

Lauzon: We supply repairs on virtually every part in every commercial and industrial turbine and APU. We overhaul most APUs, JT8D engines and we are looking at the aero derivative market. We provide several unique repair techniques, including patented blade tip welding, Airfoil Replacement Repairs, or AFRs, and turbine case flange replacements, to name just a few capabilities.

AM: Where are your engine MRO facilities located?

Lauzon: The JT8D engines are serviced at our facility in San Diego, Calif. APUs and AGT1500 tank engines are overhauled at our San Antonio, Texas operation. We also have manufacturing and repair facilities at more than 25 locations in the U.S. and around the world.

AM: Chromalloy also makes parts manufacturer approval (PMA) replacement parts, correct?

Lauzon: Yes, we make PMA and alternative parts for many engines. We have unique design, cast and manufacture capabilities allowing us to make sophisticated high-pressure turbine components. We hold 372 FAA PMA approvals with 34 more awaiting approval. And no Airworthiness Directive has ever been issued against a Chromalloy part. There are more than 87,000 Chromalloy-repaired vanes and nozzles and 214,000 PMA blades and vanes flying. We also hold more than 40 patents.

AM: The ability to cast parts is crucial to your "uniqueness," isn’t it?

Lauzon: Yes, we have two casting facilities. One is in Tampa, Fla. and the other in Carson City, Nev. These facilities are capable of both aero and industrial size castings.

AM: What other services does the company offer?

Lauzon: Chromalloy provides advanced coating services to all the major OEMs. We are the single largest provider of low pressure plasma spray overlay coatings for turbine applications. We have also invested more than $75 million in electron beam physical vapor deposition.

AM: Aside from these capabilities what makes Chromalloy unique?

Lauzon: Our people are PhDs, engineers, metallurgists and highly skilled technicians. Unlike the OEMs, whose driver is to sell spare parts, our interests are aligned with the users of turbine engines. We are flexible in adapting to customer needs.

AM: Going forward, how do you plan to differentiate Chromalloy from your competitors?

Lauzon: The hot section is our world of expertise. That’s where we play. That’s our sweet spot. We will concentrate our capabilities there. Repairs cost a fraction of the cost of a new part and we have a heck of a track record behind us. We have learned to coexist with the OEMs and that’s an advantage that a lot of companies don’t have. We will also work to bundle services — repairs, advanced repairs, replacement parts, PMA parts and overhaul capabilities. You’d have to find five different companies to be able to do all the things we do.

AM: How has ownership by The Carlyle Group benefited Chromalloy?

Lauzon: Under Carlyle we can make quick decisions. This is a dynamic marketplace and their support gives us the speed to make the quick decisions needed to be lean, agile and reduce our lead times. Speed to market will be key going forward. The company has a new management style. The other change they have shown us is the need for a standardized approach at our numerous locations.

AM: Tell us about your new location in Burlington, Mass.

Lauzon: This office is closely located to the FAA’s Engine and Propeller Certification Directorate. We want to work more closely and efficiently with them. We believe that better communications with the FAA will allow a more rapid approval of PMA parts. This is key in our goal of being first to market going forward.

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