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their commercial potential. Take
TAAS, El-Op and Rafael, all of
which tried to find new applica-
tions for their technologies but
failed to design products that filled
a need in the marketplace.
Mr. Nissenson attributes
Rada's success to the company's
offensive approach to doing busi-
ness. Unlike most military-equip-
ment manufacturers, which
generally respond to a customer's
request rather than develop and
bring unsolicited goods to the mar-
ket, Rada, a non-governmental,
publicly-held company, had to
take a more aggressive approach
in order to stay afloat.
Ironically, Mr. Nissenson's non-
military background prepared
him for the task. In 1980, in
search of a business challenge and
the opportunity to acquire shares
in a company, Mr. Nissenson,

velopment-town location helped
Rada win Israeli bids, the com-
pany could not compete in the
American market, where made-
in-America loyalty prevented the
U.S. government from importing
military goods similar to those
made by U.S. companies.
"Even if we built newer equip-
ment for the F-16, it wasn't easy
to tell [Americans] to buy ours,"
Mr. Nissenson said. 'There were
even a few meetings in Congress
in the late 1980s that focused on
Rada and how [buying Rada's
products] would generate U.S. un-
employment."
In order to compete, Rada went
beyond standard testing equip-
ment to develop the CATs.
Through a $20 million investment
that was spent on designing var-
ious adapters that could connect
the airplane's numerous operat-

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then 31, left his job as chief fi-
nancial officer at Teva Pharma-
ceuticals. After considering several
options, including a position as
head of a solar-heating company,
he opted to take over Rada, a
small company that was in dire
straits.
Founded by entrepreneur
David Reitner in the wake of Is-
rael's post-Six Day War defense
industry boom, Rada was known
for developing "small, elegant so-
lutions to small problems," Mr.
Nissenson said. But with the cre-
ation of the Kfir and Phantom
fighter planes, Rada began re-
ceiving bigger and bigger orders
which the company did not have
the resources to fill.
When the government offered
the company financial assistance
if it would move operations from
Haifa to the development town of
Beit She'an, Reitner jumped at
the offer. But in a twist of Israeli
bureaucracy, the government
committee that arranged the deal
failed to convince the government
committee responsible for subsi-
dies to grant Rada the money.
Needless to say, R ada, which in
1980 had a turnover of $300,000,
accumulated more debt and grew
further behind in completing or-
ders.
Looking through this mess, Mr.
Nissenson saw a company that
had certain advantages. The tech-
nology was good, and the compa-
ny, albeit small, was a player in
the select club of local military in-
dustries.
But, while this cache and its de-

ing systems' boxes to the diag-
nostic machine, the interface
software to check the boxes and
the diagnostic computer itself,
Rada became one of only two com-
panies — the other is Aerospatiale
— to design such all-purpose-test-
ing systems.
With an average system selling
for $40,000-$50,000, Rada is now
banking on future sales to help
the company recover its initial in-
vestment. But while executives at
Rada are encouraged by recent
deals and optimistic about future
sales as the next generation of ful-
ly automated airplanes hits the
runway, the company's stock,
which is trading just above $3, re-
flects investors' hesitations.
"It's not the biggest company in
the world, and Rada probably
won't be able to compete unless
more money becomes available,"
said Commstock analyst Douglas
Goldstein, suggesting that Rada
will need to be purchased by an-
other company in order to contin-
ue.
"It seems to me, all high-tech
discoveries seem to be copied if
they are good, and Rada won't
have its head start forever."
While company executives ac-
knowledge that Aerospatiale has
the advantage of being a large
company that can insist buyers of
their Airbus also purchase their
testing equipment, they say the
great cost involved in developing
similar systems will keep other
competition from entering the $1
billion market. ❑

(c) Jerusalem Post 1997

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