Howley raises prices. Mendelson undercuts the monopoly. Thirty-five years later,
both built compounding machines worth tens of billions. This is a field guide to
how they did it.
TDG acquired AmSafe Global Holdings · February 2012 · $750M
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W. THORNDIKE
Author, The Outsiders
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Final
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Parts Manufacturer Approval
PMA
An FAA-issued authorization allowing a company to manufacture and sell a replacement aircraft part — without being the original manufacturer.
Step 1 Reverse-engineer the OEM part to identical spec
Step 2 Submit design, test data, and conformity proof to the FAA
Step 3 Receive PMA approval — typically 18–24 months
Step 4 Sell the identical part at 40–50% below OEM price
Heico has obtained over 13,000 FAA-approved PMAs. Each one breaks a sole-source monopoly.
Same part · fair price · volume follows
— The Mendelson Method —
HEICO · 16 Subsidiaries
HEICO
Est. 1957 · Mendelson Method · 1990
FSG
Flight Support Group
ETG
Electronic Technologies Group
— The Mendelson Method —
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Where Heico Flies
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The Compounder
$10,000 invested in 1990
What did you choose?
Three paths from the same starting point. Watch what happens.
Log scale · 1990
HEICO
$10K
TDG
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S&P 500
$10K
"We want the cash to come out of the operation. That is why we run the Company — to create an entity that generates a lot of cash."
— Laurans Mendelson
The Three Mendelsons
Since 1990
A family, not a corporation.
Three men took over a struggling $25M aerospace company in 1990. They still run it together. Tap each to hear them.
Something you should know
In 1990, the Mendelsons put 10% of Heico's stock into the employee 401(k) as a gift. Today, those shares are worth over $2 billion. Long-serving employees retire with seven- and eight-figure 401(k) balances.
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