<PAGE>
                                                                   EXHIBIT 10.14
                              SUBSIDIARY GUARANTEE


               The Guarantors listed below (hereinafter referred to as the
"Guarantors," which term includes any successor or assign under the Indenture
(the "Indenture") and any additional Guarantors), have irrevocably and
unconditionally guaranteed (i) the due and punctual payment of the principal of,
premium, if any, and interest on the 10% Senior Subordinated Pay-In-Kind Notes
due 2007 (the "Notes") of Pacific Aerospace & Electronics, Inc., a Washington
corporation (the "Company"), whether at stated maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal and
premium, if any, on the Notes, and the due and punctual performance of all other
obligations of the Company, to the Holders or the Trustee all in accordance with
the terms set forth in Article 11 of the Indenture, (ii) in case of any
extension of time of payment or renewal of any Notes or any such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise, and (iii) the payment of any and all
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Subsidiary Guarantee.

               The obligations of each Guarantor to the Holder and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee.

               No shareholder, officer, director or incorporator, as such, past,
present or future of each Guarantor shall have any liability under this
Subsidiary Guarantee by reason of his or its status as such shareholder,
officer, director or incorporator.

               This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders, and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.

               This Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Notes to which this
Subsidiary Guarantee relates shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.

               The Obligations of each Guarantor under its Subsidiary Guarantee
shall be limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.

               The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to Article 11 of the Indenture shall be junior and subordinated to the
Senior Indebtedness (as defined in the Indenture) of such Guarantor on the same
basis as the Notes are junior and subordinated to the Senior Indebtedness of the
Company. For the purposes of the foregoing sentence, (a) each Guarantor may
make, and the Trustee and the Holders of the Notes shall have the right to
receive and/or retain, payments by any of the Guarantors only at such times as
they may receive and/or retain payments in respect of the Notes pursuant to the
Indenture, including Article 10 thereof, and (b) the rights and obligations of
the relevant parties relative to the Subsidiary Guarantees and Senior
Indebtedness of any Guarantor shall be the same as their respective rights and
obligations relative to the Notes and Senior Indebtedness of the Company
pursuant to Article 10 of the Indenture.


<PAGE>

               THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN
BY REFERENCE.

               Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.


<PAGE>

               IN WITNESS WHEREOF, each of the parties have executed this
Subsidiary Guarantee as of March 19, 2002.



                                    GUARANTORS:

                                    AEROMET AMERICA, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    BALO PRECISION PARTS, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    CASHMERE MANUFACTURING CO., INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    CERAMIC DEVICES, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    ELECTRONIC SPECIALTY CORPORATION


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President



<PAGE>

                                    NORTHWEST TECHNICAL INDUSTRIES, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    PACIFIC AEROSPACE & ELECTRONICS
                                    INTERNATIONAL, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    PACIFIC COAST TECHNOLOGIES, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    SEISMIC SAFETY PRODUCTS, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President


                                    SKAGIT ENGINEERING & MANUFACTURING, INC.


                                    By: /s/ Donald A. Wright
                                        --------------------------------
                                         Donald A. Wright
                                         Executive Vice President