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Hobby-Kit Outfit Supplies Model of Homespun Profit : Entrepreneurs: Founded in an engineer's idle hours, Airtronics' business is soaring and its reputation rivals those of larger competitors.

March 29, 1990|THUAN LE | TIMES STAFF WRITER

IRVINE — About 1970, a heart attack forced F. Lee Renaud to take a medical leave from his job with a New York office-equipment company. While recuperating, Renaud, an airplane enthusiast and former aerospace engineer, kept occupied by building radio-controlled model airplanes in the garage of his Pasadena home.

By 1971, Renaud decided to turn his hobby into a business. He formed a company called Airtronics and began building and selling model-airplane kits. In that first year, he sold $40,000 worth of airplanes and radio remote control devices.

After Renaud's death in 1983, his wife Barbara took command of the company, one of the few U.S.-owned companies in its market. Today, Airtronics is generally recognized among model-airplane enthusiasts for the quality of its products. And that makes Irvine-based Airtronics something of a rarity, considering the competition: mostly much-larger Japanese companies.

Airtronics has 18 full-time employees and had sales of about $8 million in 1989. Its main competitor is the Futaba Corp. of America, an Irvine-based subsidiary of the Futaba Corp. of Japan.

Ron N. Hieb, Futaba's national sales manager, says he considers Airtronics a strong competitor. But he also says Futaba's sales figures, which it doesn't release, exceed Airtronics'.

The companies are the two largest model airplane makers in a market that has quadrupled in size to $600 million since 1983. The market includes radio-controlled airplanes, cars, boats and their accessories, according to figures supplied by the Virginia-based Academy for Model Aeronautics.

Sales of radio-controlled models began to take off in the early 1980s, when some Japanese manufacturers developed radio-control boxes that were smaller and easier to use, industry watchers said.

Barbara Renaud, 53, says Airtronics has thrived because the company is still relatively small and has not sacrificed quality for volume sales. "We're not mass-production-oriented; we're service-oriented," she said.

But she insists that Airtronics couldn't have succeeded by itself. In 1982, realizing that Airtronics would be unable to expand its product line without additional financial backing, the Renauds forged a partnership with Japanese-based Sanwa Corp., an international manufacturing conglomerate. Sanwa purchased a substantial stake in Airtronics, though Renaud won't disclose how large. The Renaud family still owns a controlling interest in the company.

Under the partnership, Airtronics designs and manufactures airplane kits in the United States, while its remote control systems are designed by Sanwa and manufactured in Japan and Singapore.

After Airtronics teamed with Sanwa, sales more than tripled--from less than $1 million in 1983 to $3 million in 1985--and have climbed steadily since.

Still, Airtronics has remained very much a family operation. The Renauds' son, Tim, designs the airplanes and model kits. Another son, Bob, is the company's sales and marketing manager.

Anita Northrop, co-founder and general manager of Radio Controlled Model Builder Publishing Inc. in Newport Beach, which publishes three monthly magazines on the hobby, said Airtronics products are top of the line.

"It has been around the longest and its radios are excellent," she said.

Bill Baker, a spokesman for the Academy of Model Aeronautics, said differences between the companies' products are minimal.

"To try to pick at the quality of their products would be like splitting hairs," said Baker, whose organization has about 160,000 members nationwide.

Model airplane enthusiasts can expect to pay an average of about $200 for a kit and controller. Airtronics' products range from about $250 for an already-assembled kit and controller, up to $1,200 for an airplane and a computer-programmable controller so sophisticated that it can move the pilot.

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