Test industry stalwart gears up for growth
[An exclusive interview with a technical leader]
Staff -- Test & Measurement World, 9/1/2005
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| GORDON TAYLOR President and CEO Racal Instruments, An EAD North America Defense Co. Irvine, CA Gordon Taylor joined Racal Instruments in 1963 as a design engineer. Progressing through several engineering and technical posts, he became deputy managing director of Racal-Dana Instruments in 1978, president in 1980, and managing director and CEO in 1988. He continued to head the company through an acquisition by Thales in 2000, a management-led leveraged buyout in November 2001, and ultimately, through a successful sale to EADS North America in October 2004. Gordon Taylor is the president of the newly formed Test & Services Business Unit of EADS North America Defense.
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T&MW: What is Racal Instruments' niche in the test business?
Taylor: We started as an instrument company more than 45 years ago, but we have increasingly evolved into a full-service company that offers a great deal of system integration, as well as field support for our equipment right up until the end of its useful life. We are strongly rooted in functional test for the military and commercial markets.
T&MW: How will the acquisition of Racal Instruments by EADS North America affect your strategy?
Taylor: It's a dramatic change. At Autotestcon, we will announce our new name, EADS North America Defense, Test & Services. We were in the right place at the right time in that we have worked with EADS Test & Services in Europe for many years. Now, EADS is encouraging us to grow in North America both internally and through aggressive acquisition. In the first half of this year alone, we recruited more than 50 employees—90% of whom are engineers. This will bolster our product-development efforts in modular instruments and in major systems, such as engine testers.
T&MW: What factors are driving the growing interest in modular instruments?
Taylor: Everyone wants to pack more and more capability into smaller spaces. In addition, engineers who must communicate with their test systems are not always as software savvy as they would like to be. They need simple, easy-to-use systems, which is another driving factor for modular instruments. Our company has delivered thousands of software tools to simplify the connection between the engineer doing the job and the test system he's using.
T&MW: As a founding member of the VXIbus consortium, how do you assess the demand for VXI today?
Taylor: Racal Instruments is still a major player in VXI. I wouldn't say the market is growing, but neither is it shrinking, as naysayers claim. There is strong demand for VXI products from the military.
T&MW: Over the last couple years, your company has introduced new products with the PXI platform. Where do you see the greatest demand for PXI?
Taylor: PXI wins in applications where simplicity, limited functionality, and compact size are important. It doesn't compete with VXI at the top end. We use PXI in some of our engine testers, and there is demand for PXI in lower-frequency, data-acquisition applications. We work across quite a few platforms, but what ties it all together is that we are a modular-instrument company.
T&MW: Do you see signs of a comeback in the communications test market?
Taylor: We had our own radio-test arm, but our previous owners sold it off to Aeroflex last year. So we are now out of the mobile radio tester market. We intend to grow our business in RF test, primarily aimed at the military market. When the bubble burst in the commercial communications market, test companies suffered huge cancellations of business. We made a laser tester that grew to more than $14 million in sales in less than two years, and then crashed to nothing within a year. We still sell laser testers, but it is not a major area for us. One segment where we do see a lot of activity is in satellite and RF markets, where products like our 1257, a configurable microwave and optical switching platform, are selling well.
