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Cherokee Nation Industries signs $20 million contract

STILLWELL, Okla. ? Cherokee Nation Industries has signed a contract that will bring in more than $20 million. The contact is with the Naval Air Systems Command to produce electrical wire harnesses for the Navy's Northrop-Gruman C2A Greyhound aircraft which are being refurbished.

The contract is the second largest for the tribal business and should help the once-failing company to get back on its feet.

"We needed this," David Stewart, president and CEO said. "It's a good base contract. That will allow us to expand and be more competitive on other contracts and provide our people with assurances about their jobs."

Financial problems plagued the company over the past few months and forced it to ask the Cherokee Nation Tribal Council for a loan of $3 million to keep it afloat until the company could make up for the money spent on telecommunications inventory after business dropped off last summer.

The Cherokee Nation came through with the $3 million, but CNI found it didn't need to use it, thanks to diversification and money management.

"Through some real good cash management we did not have to take the loan from the tribe," Stewart said. "We worked with our vendors. We have very good relationships with our vendors and the downturn in the telecommunications industry was nationwide and with good relationships we were able to work through that and everybody is happy."

Although the telecommunications division was a victim of the recent downturn in the industry, Stewart said he fully expects it to rise again and has been letting both vendors and customers know the diversity within CNI means the company will be there for the long haul. As other telecommunications have gone belly up during hard times, CNI has been able to keep its head above water and will remain in the game despite the over expenditure on supplies for that division earlier this year.

"We'll be ready when it turns back," Stewart said. "We're still profitable in that division, just not as profitable as we once were. It's still a good business for us."

Stewart said he is especially happy the contract came when it did, allowing employees to go into the holiday season without fears of lay offs.

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"In fact, with this Naval Air contract, we do have some other contracts that will be terminating. We will roll those people into that and then we will have a fairly aggressive marketing plan to get us back to where we were in years past. I expect by year's end to hire another 20 people."

CNI employs 350 people, with 150 of those working at the Stillwell plant. More than 80 percent of the workforce at CNI is Native American and more than 75 percent female.

"We have great employees," Stewart said. "A lot of our people have been around 20 years or more. We just have a lot of loyalty and our employees have really stuck with us during this transition. Now we're positioned to take it to the moon!"

Employees at CNI haven't had a chance to celebrate yet Stewart said. "We are just kind of coming off the award so we are going to have a big company announcement. So far all they have heard is rumors. We are going to have a big company announcement around Christmas for the employees, it will be a great Christmas present for them."

The announcement is timed to help employees feel secure in a fast-changing workplace. "It will make people feel a lot more secure in their jobs. And they need that security now. That division is important to us and they need to know that we are going to do everything we can to make sure that they have a job."

The Navy contract isn't the first government contract for the CNI. In August, it signed a contract to produce products for a Tulsa-based defense contractor to manufacture mobile power generating systems for the U.S. Army and has the potential of bringing more than $15 million.

Other possible contracts are waiting in the wings. "We have already been contacted by some of our primary customers like Lockheed-Martin and Boeing and some of the departments within the Department of Defense to get ready for additional capacity and so on, so we feel like unfortunately there is opportunity for us," Stewart said.

The current war on terrorism means other contracts are being discussed. Current talks with Lockheed-Martin involve the Joint Strike fighter, a 27-year project.

The irony of CNI's good fortune isn't lost on Stewart. "It's a tough way to get that opportunity, but it's business and we want to be a big part of this."