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SHELLY GARCIA Staff Reporter ITT Gilfillan, crippled by a brutal downsizing in the early 1990s, is beginning to turn its business around. In the past year, the Van Nuys-based company, which develops and manufactures radar systems for air-traffic control and air-defense systems, has won more than $60 million in new business and hired about 50 new employees. The small victories still leave the firm, a division of ITT Industries, about 30 percent shy of the sales it posted in its heyday, but the turnaround is significant for a company that, until recently, had hitched its fortunes almost exclusively to those of the U.S. defense industry. “We probably went down by more than half when the defense cuts came,” said James Cameron, the firm’s president and general manager. “So we went through a very painful process.” ITT Gilfillan put its first ground-control radar system into operation during the Berlin Airlift of 1948. By the Reagan years, the company was outfitting most of the Navy’s aircraft carriers, amphibious ships and other vessels with versions of its air-defense and air-traffic control systems. At its height, ITT Gilfillan employed 2,000 people. Then came the end of the Cold War. Defense spending came to a screeching halt, and ITT Gilfillan’s employee roster shrank to less than 500. The company suddenly was forced to look beyond the U.S. military to rebuild its business. ITT Gilfillan set about refining some of its technology. It modified its air-traffic control systems for ground use, including the development of a mobile system, and it pioneered a new manufacturing process. “That enabled us to sell our products for one-third the price,” Cameron said. With its less expensive products in tow, ITT Gilfillan began to explore foreign markets. Last year, the company won a $10 million contract to provide radar systems to the Brazilian Air Force; a $40 million contract to manufacture and install air-traffic control and air-defense surveillance systems for South Korean armed forces; and a $4 million contract for one of its latest ground-control radar systems, the PAR-2000, which the United Kingdom has put into use in the Falkland Islands. “One of the things we’ve done to grow is take a proven product and apply it to the international market,” said Cameron. He said 50 percent of the company’s business now comes from international markets. At the same time, the domestic defense market has begun to show some signs of improvement, particularly in the segments in which ITT operates. Across L.A. County, employment in the area of search and navigation equipment, for instance, rose to 36,400 in 1997 from 33,100 in 1995, according to data from the Economic Development Corp. of L.A. County. The reason is that the U.S. military, unable to buy new ships because of budget restrictions, instead is making improvements in its existing vessels. ITT Gilfillan late last year won a $7 million contract to upgrade the radar systems on Navy aircraft carriers and other warships, for example. And the House Appropriations Committee recently approved $8 million to purchase an air-traffic control radar system for the Air National Guard from ITT Gilfillan. “The current radar the Guard is using is from 1975,” said Doug Campbell, legislative director in the office of Rep. Howard L. Berman, who lobbied for the appropriation. The House also approved $4 million to assist ITT Gilfillan in developing new antenna technology for transmitting reconnaissance information via satellite. That funding is especially important to the company, said Cameron. Its new foreign customers are solely interested in off-the-rack products, creating fewer opportunities to fund important research and development activities that keep the company on the leading edge of defense technology. “If you start selling to customers that just focus on the front end, you lose that edge,” Cameron said. Whether the U.S. military will step in on a broader scale to help with research and development efforts remains to be seen. Some think that after years of retrenching, the tide may turn back in favor of military spending. But others are less certain. They argue that the world has changed since the days when large military outlays were easily justified by the threat from the Soviet Union. “Politically, it was very easy to increase spending because you had a big, obvious threat,” said Jon Kutler, president of Quarterdeck Investment Partners, an L.A. investment banking shop that specializes in the aerospace industry. “Now the American people are less enthusiastic about (deploying defense resources to) Africa and other places.”

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