In 2008, MSA continued its tradition of safety innovation with the introduction of several new products that enhance performance, reliability and ultimately worker protection. In short, MSA met the ever-changing needs of our customers in key markets around the world by doing what we do better than anyone in our industry — develop increasingly sophisticated safety technology that is highly dependable, cost-effective and easy to use. Backed by our dedication to listening to the voice of the customer, world-class capabilities in R&D, our advanced manufacturing processes and our deep and long-term expertise in safety, MSA launched a number of new products that met stringent certification standards and the expectations of the men and women who depend on MSA to protect them on the job every day. Major new products launched in 2008 included:

Designed to be more rugged and durable than competitive devices, the Altair® 4 and Altair® 5 Multigas Detectors received simultaneous global acceptance, with sales almost evenly split between North America and International, thereby capturing both traditional and emerging markets.

• The Altair® 4 and Altair® 5 Multigas Detectors. These next-generation portable gas-detection instruments are more rugged and durable than competitive devices, with enhanced safety features and advanced technology. The pocket-size, four-gas Altair 4 Detector provides an ideal safety solution for workers in the oil, gas, petrochemical, chemical, first responder and industrial markets. Easy to wear and use, MSA offers several versions of these next-generation devices, ranging from one that is value-priced to another that incorporates MSA’s advanced MotionAlert and InstantAlert technology. MotionAlert automatically alerts others if the user becomes disabled due to unforeseen hazards, and InstantAlert allows the user to manually activate all alarms in an emergency situation, if necessary.
  
  Based on strong customer acceptance of the Altair 4 Detector in 2008, MSA named this innovative device its “Product of the Year.” Its sister product, the Altair 5 Detector, offers the same rugged durability with the ability to measure up to five atmospheric hazards, making it ideal for confined space and industrial hygiene applications in a wide range of industries, including oil, gas, petrochemical, marine and mining. The Altair 5 Multigas Detector comes standard with the MotionAlert and InstantAlert features; but it’s also equipped with an enhanced graphical user interface that includes a high-resolution color display and more than 15 pre-programmed languages, making it a truly global product.
  
  
• The Firehawk® M7 Responder® Air Mask. This innovative, multi-function respirator was designed to meet the specific needs of United States Air Force firefighters who face a unique set of challenges and dangers. On any given day, Air Base fire brigades may face burning jet fuel, help fight forest fires, be called upon to battle a structure fire in Iraq or respond to a crisis involving chemical or biological weapons. The Firehawk M7 Responder Air Mask allows Air Force personnel to tackle each of these challenges because it’s actually three respirators in one: it combines the state-of-the-art capabilities of an MSA self-contained breathing apparatus (SCBA) for conventional firefighting with those of a powered air-purifying respirator and gas mask. The U.S. Air Force ordered 11,000 of our M7 Responder Air Masks for shipment in 2008.
  
  
• The Defender® Visor. This fully retractable eye protection system (shown above) is the first of its kind in North America. Designed to integrate with new and traditional versions of MSA Cairns® fire helmets, the Defender Visor provides a greater level of eye protection from dust, dirt and grit. Innovative and low-profile in design, its ability to retract means it’s there when firefighters need it and out of sight when they don’t. In 2008, the Defender Visor helped MSA gain market share in the highly competitive fire helmet segment. Since its introduction, approximately one-third of our MSA Cairns Fire Helmet customers have specified this market-leading feature. And, the number of customers selecting the MSA Defender Visor continues to grow every month.
  
  

• The motionSCOUT™ Personal Alert Safety System(PASS). A next-generation stand-alone device, the motionSCOUT PASS sounds an alarm when a firefighter is down or becomes disabled. While many PASS systems today are integrated into the electronics of an SCBA, MSA designed this new product as a highly reliable, lower-cost alternative for the global market. The motionSCOUT PASS provides increased durability in extreme environments and greater ease of use with a significant cost reduction, as well as a solid state motion sensor for improved reliability. In 2008, the product was well received by customers, with nearly 10,000 units sold.
  
  
• The alpha™ Personal Network. A new electronic personal monitoring and alarm system, the alpha Personal Network was designed for the European fire service to improve fire ground management. Deploying many innovative features, the alpha Personal Network consists of the alphaSCOUT monitor, a wireless Integrated Control Unit to monitor firefighter motion and cylinder pressure; the alphaHUD, which provides cylinder pressure status and battery life information within a firefighter’s field of vision; the alphaBASE, a receiver for fire ground management; the alphaTAG, enabling firefighters to identify themselves and transmit data back to incident command; and the alphaCONTROL, MSA’s unique monitoring software providing complete incident data that is automatically logged and analyzed.

During the year, MSA also strengthened its air-purifying respirator offerings with the successful roll-out of the OptimAir® TL Powered Air-Purifying Respirator (PAPR). Integrating engineering expertise and technology from Europe and North America, MSA created the OptimAir TL PAPR to be the most advanced product of its kind. Designed primarily for the North American market, this breakthrough respirator stands out as the pinnacle in PAPR performance. The OptimAir TL PAPR enhances safety by providing an automatically-activated cartridge switch that sets blower speed and optimizes battery run time. It even includes an internal pressure switch that adjusts flow rates for varying altitudes. In 2008, customers who purchased the OptimAir TL PAPR included the City of Chicago, Department of Public Health; the Department of Energy’s Hanford Reservation; and Newport News Shipbuilding.

The Evolution® 5800 TIC, with 2x digital zoom, provides best-in-class image quality in all temperatures displaying 4x the information of previous TIC designs.

Other key MSA product introductions over the past year included the smartCHECK™ System, a modular, automated test bench designed for the German Army to check the performance of an SCBA; the Advantage® 4000 Full-Face Respirator that appeals to broader international markets; the Evolution® 5800 Thermal Imaging Camera for the global fire service market; the G3 Gendarmerie Helmet for local and national police forces in France; the GasGard® XL Monitor for off-the-shelf monitoring, and the Workman® PFL, a personal fall arrest device that provides users freedom of movement while significantly limiting freefall distance.






In 2008, MSA took major steps to enhance our operational performance and optimize our processes to deliver even better products for MSA customers throughout the world. One of MSA’s most important initiatives during the year was the first phase of our wall-to-wall conversion to Demand Flow Technology throughout our global Operational Excellence organization.

Demand Flow Technology (DFT) is a business process that makes manufacturing operations more flexible, responsive and predictable. DFT and its systematic, quantitative methodology helps provide more accurate demand management, more efficient asset and inventory management, and more reliable customer fulfillment. DFT also enables our factories and warehouses to respond faster to the needs of our customers while reducing inventories.

The conversion to DFT at some of our international manufacturing facilities in Australia, Brazil, China and South Africa is already underway producing encouraging results, including product cost reductions, lower cycle times, improved customer delivery, increased productivity, and improved inventory turns. To date, MSA has trained more than 450 global associates in DFT and will continue the global conversion throughout 2009 focusing on North America and Europe.

MSA also launched other initiatives during the year to achieve operational excellence, including establishing a process to consistently measure all of our global factories on select key performance indicators. This process now enables MSA to benchmark and compare each of our facilities and identify specific areas where we need to improve to achieve our goals of operational excellence.

In addition, MSA began using comparable global costing processes in North America, Europe and China, as well as global processes to enhance the utilization of our manufacturing assets in ways that increase our return on those assets. We also implemented best practices for global sourcing, front-end logistics and inventory management.

Overall, MSA remains focused on achieving higher performance levels in our business for our customers, to give the company a sustainable competitive advantage that we believe will strengthen customer satisfaction and, ultimately, customer loyalty.

A key element in our continuing drive to achieve operational excellence is Project Magellan. A multi-year endeavor that was announced in January 2007, Project Magellan is aligning MSA’s resources and manufacturing footprint to reduce costs and efficiently meet the needs of customers in key markets and regions with growth potential, like China and Mexico.

As an example, MSA opened a state-of-the-art manufacturing, warehouse and R&D center in Suzhou, China at the end of 2008 — our second manufacturing facility in that growing market. As a new hub for our business activity in China, the 172,000 square-foot Suzhou facility marks MSA’s largest overseas investment in recent years and serves as one of the largest producers of safety equipment in China. Accordingly, the new facility in Suzhou will manufacture self-contained breathing apparatus, portable and permanent instruments, fall protection equipment, and other safety products for the general safety market. In addition, MSA also made investments to improve and modernize our manufacturing facilities in Sydney, Australia, and São Paulo, Brazil, in 2008.

The Workman® Harness is one of the principal products manufactured at MSA’s new facility in Querétaro, Mexico.

Marking 50 years of doing business in Mexico, MSA continued to strengthen our operational excellence capabilities by opening a new 77,000 square-foot facility in Querétaro at the end of 2007. As one of the company’s premier manufacturing sites, this key facility in Mexico is producing head protection products, fall protection equipment and instrumentation, especially for North American customers in the Construction and Oil, Gas and Petrochemicals market.

MSA’s focus on boosting efficiency and reducing costs while improving deliveries and customer satisfaction included streamlining our North American staff by approximately 8% in early 2009 by instituting a hiringfreeze, and by offering a voluntary retirement incentive program. In light of the continuing global economic slowdown, this was a necessary step for MSA. Our goal is to be as competitive and responsive as possible while exceeding our customers’ expectations for quality, product performance and value.

At MSA, improvement is truly a continuing process, regardless of economic cycles. Our people are dedicated to this improvement, as well as achieving operational excellence and striving to do the best for our customers around the globe.

MSA’s new state-of-the-art manufacturing facility in Suzhou, China opened in January 2009. It will serve as a new hub for business activity there.

This new facility in Mexico, which had more than 160 employees at the end of 2008, consolidates previous MSA operations in Torreón and Mexico City, and enables MSA to more effectively support and serve our customer and distributor base in Mexico, where MSA has experienced dynamic sales growth over the past five years.

MSA employees in Berlin assemble the 3S Mask using DFT processes. Recognized for its comfort and classic design, the 3S Mask is an air-purifying device that has more than 5 million units in service.

Under Project Magellan, MSA also continued to relocate and consolidate certain manufacturing activities as part of our long-term strategy to reduce costs, improve operating margins, enhance our competitiveness in key product areas, and strengthen customer relationships by providing the best value in sophisticated safety products.

This strategic manufacturing reconfiguration included shifting most of the production of gas masks and other respiratory protection products at our facility in Evans City, Pennsylvania to other MSA facilities in the United States. MSA also shifted fire helmet production from the company’s facility in Clifton, New Jersey to our plant in Jacksonville, North Carolina, resulting in the closure of the Clifton site in late 2007.

In all, MSA operated 8 manufacturing facilities in North America in 2008 that employed approximately 1,500 associates at year end. In the rest of the world, MSA operated 9 additional manufacturing sites employing approximately 2,100 people.

Illustrating the growth potential for MSA’s head protection products, the company received a 3-year order for 40,000 G3 Gendarmerie riot helmets for the police forces in France.

Since MSA’s founding in 1914, the company has been dedicated to protecting workers with the best safety equipment that meets their various and specific needs and requirements. Over the years, MSA has expanded and strengthened our business, our “best-in-class” and “first-to-market” product lines, and our manufacturing capabilities to become a truly global safety company. Today, MSA is focused on serving key worldwide markets, including: Fire Service; Oil, Gas and Petrochemical; Law Enforcement; Military and Construction. MSA also meets the safety needs of workers in the Utilities, Manufacturing, HVAC and Hazardous Materials Remediation markets. In geographic markets outside of North America, such as South Africa and China, MSA also continues to serve the mining industry, the market that was the first to benefit from our protective equipment when the company was founded 95 years ago.

In 2008, MSA reported record global sales of $1.1 billion, with sales outside North America reaching 48%, as the company continued to target geographic markets around the world with growth potential.

Despite the challenging global economic slowdown, MSA continued to grow the MSA brand in markets such as China, Europe, South America and Africa. Overall, sales from our European and International segments finished the year up more than 18% and 9%, respectively. Ten of MSA’s 19 international affiliates each achieved sales growth of at least 20% for the year.

Illustrating the growth potential for MSA’s head protection products, the company received a 3-year order for 40,000 G3 Gendarmerie riot helmets for the police forces in France.

In North America, our largest geographic market, sales increased 16%, reflecting in part the strong performance of our manufacturing, sales and new product development teams. One of the most impressive performances in North America was in Mexico, where MSA has achieved a cumulative annual growth rate of 22% over the past five years.

Driving our global growth were several major new contracts and orders in our key markets. In 2008, these included:

Military
• The U.S. Army – $29 million in new contracts to supply Advanced Combat Helmets (ACH). MSA has been manufacturing this advanced helmet since 2002, when the company first partnered with the U.S. Army on its development. The ACH incorporates a lightweight design that offers soldiers advanced ballistic protection with greater comfort, stability and situational awareness. Since its adoption by the Army as the standard of issue, this helmet has been credited with saving the lives of many U.S. troops in Iraq and Afghanistan.
  
  
• Canadian National Defense Forces – Nearly $7 million in orders for our CG634 ballistic helmets.
  
  
• U.S. Air Force – $24.6 million in contracts to supply the Firehawk® M7 Responder® Air Mask to air base fire brigades. This newly developed SCBA provides a threeway, long-duration respiratory protection solution that exceeds the latest National Fire Protection Association (NFPA) performance standards with approved protection from chemical, biological, radiological and nuclear (CBRN) contaminants.
  
  
• German Federal Defense Forces – $19.2 million (€15 million) in orders to supply self-contained breathing apparatus (SCBA), M2000 gas masks and other safety products.

Fire Service
• Vienna (Austria) Fire Brigade – A $1.3 million (€1 million) order for F1® Fire Helmets.
• Hong Kong Fire Brigade – A $4.5 million SCBA order.

Law Enforcement
• Canadian Corrections Department – A $4.4 million contract for our Firehawk® M7 Air Masks.
• French Police Forces – A $15.3 million (€12 million) order, over three years, for 40,000 G3 Gendarmerie riot helmets, and a $6 million (€4.7 million) order for 2,000 ballistic vests, reflecting superb teamwork between our U.S.-based Paraclete body armor business and our customer focus team in France.

Oil, Gas and Petrochemical
• PEMEX – A $6 million contract to supply flame and gas detection monitoring systems to Mexico’s state-owned petroleum company.

The Oil, Gas & Petrochemical market continues to be a growth driver for MSA. In early 2008 MSA secured a $6 million contract from PEMEX for flame and gas monitoring systems.

In 2008 MSA secured a $1.3 million order from the Vienna Fire Brigade for F1® Fire Helmets.