Space Race: Irvine Electronics Looks to Shuttle, Space Station After Defense Boom

Orange County Business Journal, May 28-Jun 3, 2007 by Beighley, Dan

Irvine Electronics Inc. is looking to space as a hedge against the prospect of a slowdown in the defense boom of the past few years.

The Irvine-based maker of aerospace electronics has started shipping its first space product, a device that allows the space shuttle to dock longer with the space station.

"We have hardly scratched the surface of this multibillion-dollar industry." said Onnig Zerounian. Irvine Electronics' vice president.

The company is bidding for work on NASA's new Crew Exploration Vehicle, which is designed to eventually replace the space shuttle program.

Irvine Electronics also is eyeing work for the J-2X rocket engine for Orion Spacecraft missions and the Mars vehicle.

The company does about $14 million a year in revenue.

Zerounian's wife, Jane Zerounian. started the company 1 8 years ago and serves as president. He joined her after working in sales at Lucent Technologies, now part of AlcatelLucent.

Irvine Electronics makes about 100 products, most of them under contract with the military.

The rise of Chinese manufacturers took away most of the company's commercial business in the past two years, according to Onnig Zerounian.

Military contracts that the government prefers to have done in the U.S. have saved the company, he said.

"It used to be 80% of our business was commercial and the rest military," Onnig Zerounian said. "Now it's the other way around."

Boeing Co. is a key customer, he said.

"We're very fortunate to have the connections that we do," Onnig Zerounian said.

Boeing accounts for about 20% of Irvine Electronics' business. The company's biggest customer is New Jersey's DRS Technologies Inc., a military contractor that accounts for more than 30% of sales.

Among the company's military products are devices that help intercept nuclear missiles and help planes detect shoulder-fired missiles. The company also makes night vision goggles for soldiers and weapons that produce sound to incapacitate enemy soldiers.

Commercial products include devices that allow airplane passengers to connect wirelessly to the Internet and a product that gives dentists the ability to harden fillings with sound waves.

The company's first space product, known as a power transfer unit, is part of a multiyear contract worth about 15% of the company's yearly business, according to Onnig Zerounian.

The power transfer unit looks like a 1950s stereo. It weighs 70 pounds and has a metallicfinish with knobs and plugs.

"It took two years to make with at least 50 revisions," Onnig Zerounian said.

Of the eight units the company made, two already are installed in the space shuttle Endeavor that is set to launch this summer. Two more are slotted for space shuttle Discovery.

The unit allows the shuttle to pool power from the space station, which has an unlimited solar supply. Previous devices allowed the shuttle to stay docked for about four days. The power transfer unit allows for an 1 1-day stay.

NASA needed longer dockings after Congress cut the number of shuttle missions in half by 2010.

"We never imagined we'd be into something like this when we first started this business," Jane Zerounian said.

The company got its start building circuit boards for modems in the 1990s. It had to find new contracts when its major client reworked its business, according to the Zerounians.

All of the company's products are made at a 44,000-square-foot facility in Irvine where it employs about 75 technicians, engineers, inspectors and others, down from 150 a few years ago.

The company has found it difficult to hire well-trained technicians and engineers.

"It's a challenge to get fresh blood in here," Onnig Zerounian said. "Everything is more specialized now."

The company operates a four-day workweek to boost morale and attractiveness to potential employees. Workers put in 10-hour days.

"The employees voted on it, and it's been a huge success," Jane Zerounian said. "Production hasn't dropped off, and people are happier."

Irvine Electronics is looking to gain commercial work for companies that don't want to send production overseas for fear of losing control of their products.

"We are constantly looking into the future for long-term, innovative products to build." Onnig Zerounian said.