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Defense Gears Up to Gear Down

Firms shift trained engineers and scientists from weapons systems to high-tech offshoots

FISH Startle might not rank right up there with the invention of the Model T or the telephone. It's still experimental. The company that made it is better known for helping the Navy track Soviet subs than scaring fish away from power plant water intakes.

Still, Fish Startle proves a point: As the Pentagon budget shrinks, defense companies can shift into the commercial sector.

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Tiny Sonalysts Inc. is making the transition with Fish Startle and other commercial ventures. If other firms can follow its lead, some of the brightest scientists and engineers in the United States may start building first-class commercial products instead of first-class weapons.

"We have a major, major reallocation of resources that's going to come about in this country," says Daniel Shine Jr., director of aviation, aerospace, and defense consulting at Arthur D. Little.

Refocusing resources at Sonalysts is a constant activity.

"We try to get the bright people who want to develop something to go out there and develop a business," says company president John Markowicz. Employees work on existing business during the day and, if they want to, experiment nights and weekends.

The idea for Fish Startle came out of the blue one day in 1988 when a New York Power Authority official called with a problem. The cooling systems of power plants suck up huge amounts of water and can kill many fish in the process - an environmental no-no, according to federal law. New York Power officials had rigged up a huge drum with a spring-loaded hammer to scare away the fish from water intakes. Other utilities had tried everything from a curtain of bubbles to rock music without much success.

So the New York Power official (and former submarine captain) wondered if sonar technology could help. After years of building and analyzing sonar devices, "we knew how to put sounds in the water," says John Menezes, Sonalysts' systems engineer for Fish Startle. The challenge was finding the right frequencies to scare alewives and other fish.

Sonalysts began testing later that year in a flooded quarry in Verplanck, N.Y. Encouraged, they built a working model for tests last year. Next month they will install a full-scale demonstration at the James Fitzpatrick nuclear power plant near Oswego, N.Y. "It appears to have a lot of potential," says Carl Patrick, a New York Power Authority spokesman. Sonalysts hopes to begin selling Fish Startle this fall. After that, it wants to market Mussel Buster, a sound-making device aimed at killing the zebra m ussels that plague the Great Lakes.

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Sonalysts has other commercial successes.

Because it made military training films, the company has built a large media center that now mixes music for commercial clients and creates industrial films. Its state-of-the-art animation facility does extensive work for the New England Sports Network. Two of its employees created the submarine sounds in the 1990 movie "The Hunt for Red October" (which collected an Academy Award for sound-effects editing).

HAT'S the rosy side of the military-to-civilian transition. In reality, successes appear to be more the exception than the rule. "The first lesson of diversification is: Be prepared to fail," Mr. Markowicz says.

"You're in a situation that any market that you try to get into, there's already a company there who's been doing it longer than you and, initially at least, is doing it better than you," adds Bruce Andres, general manager of UNC Manufacturing Technology, another Connecticut defense firm that has made the switch to the commercial sector.

In 1976, all of Sonalysts' business came from the Department of Defense. It began to diversify a year later with subsidiaries in mortgage financing, computer software and hardware for business, and energy services. None of these ventures survived.

Perhaps the biggest disappointment was Prism, an interactive football game on a VCR that got swamped by the newer interactive videodisc. "I spent two years of my life to build [Prism]," Markowicz says. Sonalysts uses the new technology for its instructional materials.

At this point, 60 to 70 percent of the company's business is directly related to the federal government, with more than half of that coming from the Defense Department. Markowicz hopes to move the company to a 50-50 balance between federal government and other business.

With 427 full-time employees and $30 million to $32 million in annual sales, Sonalysts probably doesn't offer a blueprint for huge defense-related corporations, especially those at the manufacturing end of the procurement process, analysts say. But those that can make the transition will undoubtedly strengthen the economy, they add.

"To the extent that this talent helps to improve our economy ... there's no question that it enhances the defense of the country," says David Lewin, director of UCLA's Institute of Industrial Relations.

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