July 23, 2008

Boeing acquires Insitu
Defense surveillance pays off for employees

By RODGER NICHOLS
of The Chronicle

     BINGEN, Wash. — “At one point, very early in the conflict of Iraq, our CEO leaned over the desk of a major general of the Marine Corps and said, ‘I’ll bet the company on this.’”
     It was a good bet.
     The company was Bingen-based Insitu, manufacturer of UAVs — unmanned aerial vehicles — and the guy doing the talking was Steven Sliwa, its president and CEO.
     The quote is from Insitu’s chief marketing officer, Steve Nordlund, who related the anecdote at a news conference Tuesday when asked if there had been a defining moment in the history of the company.
     The reason for the news conference was to announce that Insitu had agreed to be acquired by Boeing for nearly $400 million.
     The product that got them there was the Scan Eagle, manufactured at the company’s facility at Bingen Point.
     Though the company was founded in 1994, it had only four employees in 2002, when it began a partnership with Boeing to develop the Scan Eagle.
     It has 360 employees today, all of whom own stock in the company.
     With a wingspan of 10 feet, a 4-foot fuselage, and a weight of less than 40 pounds, Scan Eagle can stay in the air for more than 20 hours and relay information with high-resolution optical or infrared cameras.
     It’s small enough to be launched and recovered with small portable launchers by units operating in the field.
     Nordlund noted that last month, Robert Gates opened every speech with a plea for more ISRs (intelligence, surveillance, reconnaisance), meaning largely UAVs.
     “When you have the Secretary of Defense making statements like that,” Nordlund said, “it’s more like being in the iPod or iPhone business.”
     The privately-held company declined to release further information on production amounts, but Nordlund said Insitu’s compounded annual growth rate over the past five years has been 85 to 90 percent.
     Company sales were approximately $87 million in 2007.
     Boeing was initially attracted to the company when it entered the aviation history books in 1998. Institu built a prototype UAV, the Aerosonde, which became the first unmanned aircraft to cross the North Atlantic. It flew 27 hours 2,031 miles across the Atlantic on 1.5 gallons of gas.