HOUGHTON -- Technology that helps the Army hide its tanks from enemy planes is also helping the auto companies improve their research and development.
ThermoAnalytics Inc. began the shift from military work to the private sector early in 1994 when it lost a crucial government contract and company President Keith Johnson turned what had been a research group affiliated with Michigan Tech University into a for-profit contract research and software company.
Today, ThermoAnalytics, located in the state's Renaissance Zone at the Houghton County Memorial Airport, has grown to 12 employees, including two forming Boeing computer programmers who live in Seattle, with another four to six people scheduled to be hired in the next year. Its client roster includes Ford Motor Co., General Motors Corp., DaimlerChrysler AG, Boeing, Mercury Marine and a variety of government agencies. Revenues continue a steady climb, from $1.1 million last year to $1.4 million this year and an anticipated $2 million next year.
Originally, ThermoAnalytics operated as the Applied Research Branch of the Keweenaw Research Center, which is the research arm of Michigan Tech. Keweenaw Research and the U.S. Army Tank-Automotive and Armaments Command have had a contract-research relationship for nearly 20 years.
In 1986, Applied Research released its Physically Reasonable Infrared Signature Model software, which predicted heat signatures for ground combat vehicles. Smart weapons using infrared technology can detect ground vehicles by spotting their heat relative to the background environment. Prior to the software, if researchers wanted to know how a tank stood out on infrared sensors in a variety of climates, they had to do field tests. The software allowed computer simulations to replace costly tests.
In 1994, Applied Research still had a single client, the Army. Early that year, because of tightening defense budgets the Army canceled a contract, as was its option, leaving Applied without funding.
"Since we hadn't diversified, it was very traumatic," says Johnson, the company's president and CEO. He is also one of the firm's two owners. Allen Curran, the vice-president of research and engineering, is the other.
Within weeks, Johnson was pursuing business with auto companies -- "just getting our foot in the door," he says. He figured that the software and technology could do for the auto companies in their r&d what it was doing for the Army -- determining what got hot when an engine ran and how the heat spread throughout the vehicle.
Such information is crucial for determining in a prototype if too much heat is radiating through the floor from the catalytic converter, for example, or how engine parts are affecting electronic components in ever more tightly packed engine compartments.
"We got very aggressive. We said, Here's our software. We've already got millions of dollars invested in it. You'd be leveraging that,'" says Johnson of his pitch for auto business.
Ford was the first to bite. Scott Dudley, a heat-management specialist at Ford, approved the first research contract with ThermoAnalytics in 1994 for $30,000, and subsequently has approved contracts of $60,000 and $200,000 in addition to helping guide the software's evolution. DaimlerChrysler subsequently approved an r&d contract.
"We continually watch for emerging technologies that we feel will have future strategic value," says Dudley. "ThermoAnalytics fit this bill with their development of a unique method of solving radiation heat transfer analysis. Working with them has resulted in a world-class software tool that has improved our capability by an order of magnitude."
In fact, says Dudley, Ford was so impressed with the software ThermoAnalytics designed under contract for the automaker that it decided to allow the firm to sell it to the general public. It was in Ford's interest to make ThermoAnalytics strong enough so that it wouldn't be dependent on Ford r&d contracts.
After signing a 10-year royalty agreement with Michigan Tech, the company became a for-profit company in 1996 -- which allowed it to apply for Small Business Innovative Research grants. It has received a grant of $100,000 and has applied for a second grant of up to $750,000.
Other funding has come from Northcoast BIDCO in Marquette, a royalty-based investment of $50,000; and revolving loans of $20,000 and $50,000 from the Keweenaw Industrial Council.
The company's radiation-modeling software was originally so complex it required a high-end Silicon Graphics computer to run it, which limited commercial applications. Improvements now allow it to be run on desktop computers. "We were ahead of the trend where everyone was moving from expensive work stations to the NT environment," says Johnson.
As of June 1, as part of a strategy to diversify from being just a contract r&d company, ThermoAnalytics began marketing and selling its line of software, which includes RadTherm, a top-end software that does thermal modeling, including conduction, convection, radiation and fluid flow; WinTherm, a scaled-down, less-complex, cheaper version of RadTherm; and its HEV tool, a software module that can be added to WinTherm for work on hybrid electric vehicles.
Its first sales were to companies in Sweden and Austria, with Ford making a subsequent purchase of seven software licenses.
ThermoAnalytics continues, despite the canceled contract in 1994, to do work for the federal government through the Defense Advanced Research Projects Administration. Teresa Gonda, the Tank Command's lead engineer for thermal modeling, says that a specialized Army version of ThermoAnalytic's commercial software will be released later this year.
Tom Henderson is a Metro Detroit free-lance writer.
Copyright 1999, The Detroit News
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Photo by Carter Sherline
President Keith Johnson transformed ThermoAnalytics from a research group affiliated with Michigan Tech University into a for-profit contract research and software company.
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