Happy Landing

By Hannah Wallace December 31, 2003

When an airplane falls from the sky, the only clues to the crash are often contained in the plane's black box, manufactured by Sarasota company L3 Communications. But L3's Aviation Recorders Division nearly suffered its own financial crash three years ago after 9/11 paralyzed the aviation industry.

Bruce Coffey, president of the L3 Aviation Recorder Division, knew there would be a downturn in the aviation recorder business. "After 9/11," he says, "all bets were off." The terrorist attacks on the World Trade Center had devastated air travel and the demand for aircraft parts. L3, a supplier of communications equipment to the aerospace and military industry and the world leader in flight data recorders with 60 percent of the market share, was particularly vulnerable.

But L3, located at Fruitville Road and Cattlemen, redirected its focus from the skies to the sea. For several years, the company had known that the International Maritime Organization, through the international treaty known as the Safety Of Lives At Sea (SOLAS) Convention of 2003, was going to require ocean-going vessels of greater than 3,000 gross tons carry a voyage data recorder. When that mandate passed in June 2001, L3 responded with a new product manufactured in Sarasota-the marine Hardened Voyage Recorder (HVR).

"We leveraged the engineering capability used in the aviation recorder product line to introduce the marine voyage recorder. The distribution channels [selling to marine concerns rather than the aviation operations they had been dealing with] were quite a bit different. So, we went out to form new partnerships and we captured 81 percent of the market," Coffey says. "We had already produced a hardened capsule for the recorder, and three weeks after the mandate came out we produced our first production unit. Our niche was in the hardened capsule."

The transition went smoothly. The company used the same employees and technology as it had with its aviation device. The primary physical difference between the two boxes is in the size and shape. Aviation recorders have to be small and light; marine recorders are bigger and heavier. The marine recorder uses flash memory chips to capture 12 hours worth of data. Audio from nine microphones on the bridge and information on heading, depth, speed and open doors are digitized and sent to the HVR for safekeeping.

Today, L3 provides the maritime system to 15 different companies, such as Samsung, which outfit the ships with the voyage recorder systems. The voyage recorder portion costs about $15,000, but the complete system, including all of the sensors and the capsule, runs about $75,000. To date, L3 has delivered more than 1,000 HVRs.

The shift to marine products opened up another market as well. Along with requiring the HVR, the Safety of Lives At Sea convention mandated that ships carry Automatic Identification Systems (AIS). These devices use global positioning technology to identify and locate ships. L3 began producing and marketing the AIS and a surveillance system for ships and airplanes.

The result: Although aviation was the original cornerstone of L3, the marine products now make up about 50 percent of the Sarasota division's orders, and AIS is turning L3 from a "recorder company to a safety products company," adds Coffey.

The marine voyage recorder "has helped us grow, but more importantly it has helped us survive, at a very profitable level, the events after 9/11. Last year our aviation business was down 18 to 20 percent and this year, it's down maybe another 15 to 18 percent," Coffey says.

Boeing built half as many planes in 2003 as it did in 2001, he points out. Other plane manufacturers, such as Raytheon, Bombardier and Cessna, have also cut production drastically. Some companies, like Loral, the progenitor of L3, filed for bankruptcy in 2003.

"We have been able to offset the downturn and even increase the size of the business by getting into marine products. That is going to continue to be the push," Coffey says.

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