The Defense Whizzes Making It In Civvies

The early hours of the Persian Gulf War were satisfying ones for Bruce Morse. Dozens of Tomahawk missiles fired from U.S. Navy destroyers and subs reached Baghdad by following electronic maps that Morse, then a computer scientist at Hughes Aircraft Co., had helped perfect. Morse is still programming computerized maps. But now, as a Denver-based consultant, he's doing it for the city of Riverside, Calif., so city planners and utility workers can push a button to see where water and power lines run.

Amid the pain of Pentagon cutbacks, Morse represents one of the few silver linings. He and a growing list of top defense industry scientists are jumping from military to civilian work--and many are helping boost U.S. competitiveness. At Westinghouse Electric Corp., an underwater-propulsion expert is developing a power train for electric cars. In Sunnyvale, Calif., scientists from Rockwell, TRW, and Stanford University have formed a company to apply their superconductor work to new kinds of medical diagnostic equipment. At Massachusetts Institute of Technology, a physicist who developed microlasers for the Star Wars program has raised $3.5 million to make devices for high-definition TVs. And a Westlake Village (Calif.) venture capitalist has bankrolled 17 startups built around defense scientists--and is looking for more.

So far, the crossover scientists are a tiny minority compared with those getting pink slips. From 1990 to 1995, some 127,000 defense industry engineers may lose their jobs, predicts the Office of Technology Assessment. And all but the top layer of this talent may work outside the profession for a while.

Yet past downturns suggest that this will be temporary. When thousands of PhDs lost their jobs from 1968 to 1974 as the Apollo space program, the Vietnam War, and the nuclear power industry wound down, they helped spawn the semiconductor industry, notes James A. Cole, managing partner at Spectra Enterprise Associates, the venture-capital fund in Westlake Village. This time, there's palpable excitement over the chance to make U.S. industry tops again. "You can feel this in research centers around the country," says Peter Staudhammer, who heads TRW Inc.'s Center for Automotive Technology in Redondo Beach, Calif.

BRAIN WASTE. It's about time, say experts such as Jay Stowsky, an analyst at the Berkeley Roundtable on the International Economy, who argue that too many good minds have been wasted on weapons. At Boeing Co., engineers who developed composites for the B-2 bomber are putting the materials in Boeing's latest airliner, the 777. And Motorola Inc.'s Advanced Microcontroller Div. has hired dozens of defense engineers--temporarily--to work in software fields such as neural networks and fuzzy logic.

Those who make the switch face a shock. In 1991, Ted Lesster, the propulsion expert from Westinghouse, leaped at the chance to work on a contract his company had won to design the power train for Chrysler Corp.'s electric minivan. Lesster knew his group had to shift gears to keep up with the auto industry's development pace. So, in a departure from defense contracting, he discarded formal design reviews and let his 15 engineers manage their own schedules. The result: The team built a prototype in six months, half the time a similar defense project would have taken. "In the commercial world," says Lesster, "you have to prove your worth with hardware, not paper ideas."

This brand of entrepreneurism is spreading. A chance meeting with a Rockwell International Corp. auto engineer at a company awards ceremony in 1989 led to Sukumar Chakravarthy's involvement in Rockwell's auto-parts businesses. For 14 years, Chakravarthy had used computational fluid-dynamics analysis to modify NASA's space-shuttle design. Vast increases in computing power have now made the technique, once a crude replacement for wind-tunnel tests, precise and relatively cheap. So, Chakravarthy, 38, spends half his time helping Rockwell's auto division cut noise in cars by reshaping the sunroofs it makes for Ford, Mazda, and Volkswagen. And that may be just the start. Chakravarthy thinks CFD analysis, which tracks airflows, could aid in designing better car-exhaust systems and engines that achieve more complete combustion.

Other scientists are starting companies. About a dozen from Rockwell and TRW have joined researchers from American Telephone & Telegraph Co. and Stanford to found Conductus Inc. in Sunnyvale. With $11 million in funding, they hope to parlay their knowhow in superconductors into better brain scanners and lab equipment. Walter S. Scott, who worked on space-based defense systems at Lawrence Livermore National Laboratories, has started WorldView Imaging Inc. to find commercial markets for satellite photos of earth.

NO FREE LUNCH. Jumping to startups usually means giving up perks. As a division manager at Hughes Aircraft, Louis Greenbaum got a new General Motors Corp. car every three months and lunched in an executive dining room. But for the past four years, he has struggled as CEO of KOR Inc., a Garden Grove (Calif.) electronics company he helped found. His '88 Buick has 97,000 miles, and Greenbaum usually gulps down lunch at a hamburger joint. But KOR is about to unveil its first commercial product: an auto-navigation system that gives cars their bearings using FM radio signals rather than more expensive satellite systems.

Raising money for new companies is tough, so having a hot technology is crucial. In 1988, MIT physicist Aram Mooradian patented a method for building tiny optical lasers while doing Star Wars research. Not content to collect royalties, in 1990 he started Micracor, which has begun to make devices that deliver data more compactly to HDTVs and medical equipment. With a staff that includes 12 top former defense scientists from Loral, Raytheon, and Draper, Mooradian figures he has a shot at the big time. So far, Micracor has $400,000 in research contracts from cable companies and electronics manufacturers and expects an additional $600,000 worth by yearend.

At large companies, meanwhile, some entrepreneurial-minded defense scientists are turning Pentagon-funded ideas into commercial coups. Over the past eight years, the Defense Advanced Research Projects Agency (DARPA) has shelled out $48 million to Rockwell for a gallium arsenide chipmaking facility. Rockwell turned out a handful of expensive, superfast chips. Then, as funding wound down, it revamped the facility, which now churns out about 500,000 chips a year, mostly for use in cellular phones and miniature satellite-positioning receivers. As it expands its gallium arsenide line, Rockwell expects sales of such chips to hit $100 million within five years, vs. less than $20 million now. "Without DARPA, we wouldn't be here today," says Jai K. Hakhu, head of Rockwell's Microelectronics Technology Center. "But we've had to move away from military R&D" to stay in business.

Carol D. Campbell made this move the hard way. Three years ago, she was charged with finding commercial markets for the products of Hughes Aircraft's Missile Systems Co. Campbell, 49, had spent her career solving high-tech defense problems, most recently shrinking missile components for Star Wars. And in her new role, she encountered resistance from what she calls "a lot of naysayers" in her unit. As a last resort, she spent three weeks in the Missile Systems library, poring over such publications as Popular Mechanics and Physics Today.

PAPER TARGET. That exercise may have saved Campbell's job. She came away with a hunch that Hughes's missile-targeting technology could also decipher sloppy handwriting, a task the U.S. Postal Service and Internal Revenue Service need done. She reasoned that "if our system can tell a B-1 from an F-16 miles away, it can tell an A from a B or a 6 from a 9." And because the system relies on artificial intelligence to analyze shapes and patterns, Campbell says it's more accurate than existing systems, which merely recognize specific letters or numbers. With only $120,000 from Hughes, Campbell scratched together a bid. In April, the Post Office gave Hughes a contract that could grow to more than $100 million within 18 months. In July, Hughes beat out IBM, Eastman Kodak, and AT&T for a second postal character-recognition contract.

TRW's Staudhammer is also on the prowl for such opportunities. For the past two years, he and his staff of six have acted as liaison between TRW's Space & Defense Sector in Redondo Beach, Calif., and its big automotive-parts business. The new job is a change for Staudhammer, 58, who most recently did laser research for Star Wars and fusion research for the Energy Dept. Earlier, he was chief engineer for the Apollo lunar module descent engine. He also designed instruments that are still sending back signals from Voyager as it slips beyond the solar system.

SAFE PASSAGE. Staudhammer doesn't see auto work as a comedown. Already, he has converted technology TRW developed for the U.S. Army into miniature radar transceivers that can be mounted on a rearview mirror. These may be useful in collision avoidance systems and new cruise controls that would help keep cars a safe distance apart. Ford, Chrysler, and Honda have expressed interest in those. His group is also working on replacing hydraulic steering with an electronic system that makes fewer demands on the engine and is more fuel-efficient. "The auto industry is undergoing major change," he says. "Suppliers are sharing more of the development and engineering workload."

That's good news for engineers who, Staudhammer insists, face as big a challenge taking on the Japanese in autos as they once did racing to beat the Russians to the moon. "We have tremendous resources in every facet of science and engineering," he adds. "We can contribute to national competitiveness and make this country a better place to live." It's hard to find a more worthy peace dividend than that.

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