TAKEOVERAmtech TSG being bought by big barcode company

TAKEOVER

Amtech TSG being bought by big barcode company

Leading electronic tollster Amtech’s transp systems group (TSG) is being bought by UNOVA Inc, an LA-based holding company which owns established barcode equipment and wireless local area networkers Intermec and Norand, and has bought promising low-cost IBM tag technology.

Amtech pioneered electronic tolling (ET), and was a world leader in its implementation in the years 1989 to 1995. Amtech still has considerable assets in scientists and engineers at its reseearcha dn manufacturing facility in Albuquerque, NM and in a large customer base of ET systems in the US south and internationally. But it has had serious financial losses and managerial upsets of recent, and faces a major challenge in its ‘SunPass’ contract to convert Florida’s Turnpike to ET.

There is considerable excitement at Amtech TSG and more broadly in the ITS world that its absorption into the UNOVA group may give it the deeper technical and financial backing that will help it get out of its current troubles and allow it to bring significant new products to market. Late last year UNOVA bought from IBM new technology that Big Blue developed for mass production of radio frequency identification (RFID) label tags — postage stamp sized passive backscatter devices designed to be laminated inside paper or plastic labels. Costing a dollar or so to manufacture (vs $15 to $30 for e-toll tags) the IBM tags operate at 905 MHz or 2.45GHz frequency and have a range of only 1m to 2m — ideal for automated reading of air travellers baggage, parcels and products boxed in pallets, dry cleaning etc. Being true passive backscatter they need no power source of their own, reflecting the radio energy of the handheld or mounted reader.

UNOVA plans to offer the IBM-RFID tags as a supplement to barcode ID possibly incorporated inside barcode tags. This would allow the two automatic ID technologies to coexist and transition. Barcode seems likely to remain for cheaper simpler applications, the RFID for highercost items and those packed in a manner that is cumbersome to read with barcodes — items heaped up atop one another. Barcode can only be read direct line of sight, whereas the high frequency radio ID system will penetrate many materials and pull multiple IDs from inside various kinds of containers.

The IBM RFID tags have no immediate obvious application to highways or tolling, which has gone way beyond simple identification tags, but the emerging North American standard for the next generation of dedicated short range communications (ASTMv7), unlike the European CEN-278 standard, makes provision for extremely low cost simple tags of this kind by allowing the intelligence to be embedded in the roadside equipment. (TR#25 Mar 98 p1) so it could allow spinoffs of the technology into highways. Meanwhile industry people see UNOVA as having the opportunity to develop as a world leader in automated identification for huge warehousing, and product handling systems.

UNOVA says it plans to develop “an entirely new product line which could significantly expand the use of automated data collection equipment and systems. The product line would comprise tags or labels that offer memory for data storage and wireless data transmission capability, as well as the related equipment to read, write and transmit that data. This wireless technology has important competitive advantages. Information stored on a tag or label can be updated or changed at any time; and the data transmission does not require a direct line of sight between the tag and the read/write equipment.”

Despite its bizarre appearances (see note) UNOVA the new owner of Amtech TSG is a large and solid technology company reporting $1.4b annual sales (vs Amtech TSG’s $50m.) Its CEO Brann rose up through Litton Industries to head it in 1990 and then took that big defense company’s civilian division into Western Atlas, from which UNOVA emerged just last Nov. It employs 6,700 with major facilities in the Seattle, Detroit, Chicago areas as well as in small towns in OH and PA, as well as in the Europe. It includes leading computer chip wafer manufacturers (Lamb Technicon Machining, and Cranfield Precision) and now includes companies heavily in automatic ID, especially barcode reading and labeling — Intermec, Norand and UBI. Intermec and Norand have both been active in local area wireless networking of computers using 900MHz and 2.4GHz, which is very similar to DSRC radio. Norand pioneered many of the handheld terminals and scanners in the late 60s.

CEO Brann has said that he sees in Amtech TSG the engineering expertise to help Intermec go from barcode into broader automatic ID: “Intermec will utilize (Amtech) TSG’s large group of experienced engineers to speed up the development of both RFID tags and equipment for applications in the industrial, warehouse, distribution, retail and government markets. Combined, Intermec will have the broadest base of intellectual property, products, people and solutions for the RFID market. TSG’s existing transportation market activities should be greatly strengthened by applying our low-cost, patented RFID technology.”

Dick Blackwell at Amtech TSG told us the IBM RFID bought by UNOVA represents the most powerful technology yet devised for “low cost high function” automatic ID. He says there is “great excitement” at Amtech about the chance to be part of a larger, stronger group and there will be great “synergy” between the technologies being developed, and that both Amtech’s highway DSRC and Intermec/Norand’s technologies will benefit.

The deal, due to be finalized some time in May, will transfer the whole of Amtech TSG (about half of Amtech Corp) to UNOVA including its new Dallas TX office building, its large research and manufacturing facility in Albuquerque NM, all its ongoing business and staff including the rights to the name Amtech.

The sale to UNOVA follows the Amtech board’s dismissal of its CEO Russ Mortenson and a statement by its new head David Cook that its 1997 results were “awful” and “stunk.” $18m was lost on total sales of $116m. Amtech’s stock price slid from over $30 in 1995 to less than $4. Last Nov UNOVA injected $10m into Amtech becoming its largest single shareholder, but after Cook took over, Feb 27, he moved quickly to begin the sale of the TSG side to UNOVA. (Contact David Brooks UNOVA 310 888 2572; David Bledsoe Intermec 425 348 2600, Bev Fuortes Amtech 972 733 6059)

Plastic appearances

UNOVA’s appearances are enough to bring out all the prejudices about plastic Hollywood. Company name for starters. Their zip is Beverly Hills CA 90210 of soap fame. And UNOVA’s HQ office as pictured on its webpage, looks like some kind of fantasy Charleston SC plantation mansion set in lush southeastern greenery, complete with a 2-story high becolumned portico to shelter from the Atlantic rains the guests alighting from their stage coach. See www.unova.com