AIRTEX AVIATION CASE ANALYSIS

Ted Richards and Frank Edwards, long-time college friends and Harvard Business School graduates, purchased Airtex Aviation on December 29, 1989.  At the time of the purchase, Airtex Aviation, located in Center County, Texas, was finishing up a fiscal year in which they had losses of sales totaling 500,000 dollars and a negative net worth.  So, it was obvious to Frank and Ted early on that they were going to have their work cut out for them in order to turn their “fixer-upper” into a successful, profitable business.  Ted and Frank knew little about the aviation industry at all going into the purchase, so they were planning on relying completely on their management skills to achieve their goals. Problems

Airtex Aviation conducted activities through six informal departments at the time of purchase: Service, Flight, Aircraft sales, Parts, Avionics, and Fuel Line.The organizational structure at this time was extremely centralized, and it gave too much authority and responsibilities to Sarah Arthur, Airtex’s under qualified accountant.She received all bills, checks and cash for all departments and kept them in