Business
Big In Defense
BVR, founded by two former Israeli air force pilots,
thrives on developing new approaches to
simulation and training.
RICKY BLACKBURN SPECIAL TO THE JEWISH NEWS
viv Tzidon, president and ed to take small wages on the
CEO of BVR Technologies, promise of future earnings. Slow-
wants to make one thing ly, however, the company built up
customers and in July 1991 held
clear.
"There's a misunderstanding a successful public offering on
about BVR," he says. "People in Wall Street.
Inevitably, once BVR began to
finance ask why our general and
administration expense (GNA) is make money, the competition be-
so big. But BVR stock hides four gan to muscle in. BVR's response
different operations. This is the was to create a patented air com-
GNA of four companies, though bat maneuvering instrument
three don't contribute to income." (ACMI) called Ehud. The prod-
BVR, one of Israel's most suc- uct, which can be applied in ei-
cessful defense companies, was ther training or operations, hit
set up to provide military equip- the market three years ago and
ment. Along the way, the owners has already been sold to six calm-
thought the firm's core technol- tries.
Ehud is a debriefing system
ogy could be applied to civilian
fields, so they created two sub- which looks like a missile and can
sidiaries, Nexus and EVR — be attached to an aircraft. Pilots
which also has two daughter com- are fed real-time information
panies — becoming a holding about what their aircraft and oth-
ers on the mission are doing. In
company in the process.
Until now, none of these sub- mock dogfights the system acts
sidiaries has made a profit. Hence as a real-time referee and simu-
BVR, which sold $18.5 million lates the release of missiles.
worth of defense-related products "Imagine playing baseball with-
last year, reported a net loss of out the ball," says Tzidon. "What
$329,000, and saw GNA expens- we do is give them something that
es of $7.8 million, compared to simulates the ball."
Some of Ehud's most impor-
$4.4 million in 1995.
BVR was founded in 1986 by tant functions are its safety warn-
Yaron Sheinman and Tzidon, two ing devices. The system is named
former air force pilots. Both had after a good friend of Sheinman
worked as consultants for defense who was killed in a mid-air col-
companies, but after a period of lision over the Dead Sea in 1988.
frustration decided the best solu- Today, 30 percent of aircraft loss-
tion was to set up their own busi- es around the world are a result
of such collisions. Israel itself lost
ness.
With years of flying experience, six aircraft, including two heli-
they were uniquely placed to un- copters carrying dozens of men,
derstand the needs of the defense in the past year and a half.
Another 30 percent of losses
market. After examining the field,
they chose simulation and train- are the result of crashes.
Ehud warns pilots if they are
ing — an area which is growing
by 10-15 percent a year despite a getting too close to other aircraft,
global decline in.defense spend- breaking safety rules or flying too
close to the ground. In addition,
ing.
When they began work, sim- it suggests preventative action in
ulators were huge, cumbersome each case. "Because the system
objects costing from $20-50 mil- knows where everyone is and
lion. The simulator for the F16 broadcasts this to all the pilots, it
was the actual size of the aircraft provides safety in dogfights," says
and needed expensive back-up Tzidon. "It saves a lot of money
such as computers, a large main- and a lot of agony."
Tzidon describes this approach
tenance crew and air condition-
as "holistic" because it combines
ing.
Using software and hardware operations, safety and training in
developed on commercially avail- one device.
Over the past few years, BVR
able computers, BVR reduced
costs to $5-$7 million, reduced the has shown significant growth.
size so that the simulator could Sales doubled annually. There
fit into a normal room, and dis- was one bad year, however. That
covered a way to run the machine was 1995, when total consolidat-
ed sales fell to $10.4 million, from
off household current.
Since then, it has adapted the $16.7 million in 1994.
Certainly sales have risen since
technology for tanks, submarines,
helicopters, unmanned airborne then. In 1996 they were $20.2
million, an increase of 93.87 per-
vehicles and smart bombs.
BVR began with nothing but cent over 1995, and first-quarter
hope. Employees were persuad- results for 1997 suggest this will
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