About Calspan - Company News -
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Published on: 2/18/2005
Last Visited: 8/17/2007
Louis Knotts and Thomas Pleban, two long-time Buffalo-based Calspan company executives, and John R. Yurtchuk, President of Matrix Development Corporation in Amherst, today announced they have purchased the Buffalo-based Aeronautics and Transportation Testing groups from a subsidiary of General Dynamics Advanced Information Systems of Arlington, Va., a business unit of General Dynamics Corporation (NYSE: GD).
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Knotts will serve as President of the new company, Pleban as Executive Vice President and Yurtchuk as Senior Vice President.
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"Today's announcement is great news for the local economy and the entire Western New York community because it guarantees that Calspan will again operate as a 'home town' company under local management providing well-paid, highly skilled jobs for our region," Knotts said.
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"Calspan built its reputation on ingenuity - smart people doing smart things to help solve complex problems and provide its customers with cost-effective solutions," Knotts said."Drawing on the knowledge of our people and our unique test facilities, our organization has a rich heritage of technical achievement and exceptional customer service that will serve us well going forward."
Knotts said Calspan's customer list includes the U.S. Department of Defense, NASA, foreign governments, the U.S. Department of Transportation, and numerous commercial customers.
He said Calspan has also served as an incubator for numerous Western New York companies throughout its history, including such influential technology companies as Moog, Servotronics, Barrister Information Systems, Astronics, Ecology & Environment, and Great Lakes Science.
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The Calspan Corp. executives who purchased the company are, from left, Louis Knotts, president; Thomas Pleban, executive vice president, and John R. Yurtchuk, senior vice president.
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Two longtime Calspan managers, Louis Knotts and Thomas Pleban, and a local developer, John Yurtchuk of Matrix Development, form the ownership team.
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"It means that we can now make our decisions locally, in Western New York," Knotts said.
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Virginia-based General Dynamics opened the door to a buyout last spring, when it decided to divest some of the business areas it had acquired from Veridian several months earlier, said Knotts, a 24-year Calspan employee.
"They had concluded some pieces of it did not fit with their strategic focus," Knotts said.That decision did not come as a surprise to Calspan managers, he said.
Knotts formed an investor team with Pleban, a 15-year Calspan employee, and Yurtchuk, who had become familiar with Calspan through his firm's development of a $13 million flight research center for the company at Niagara Falls International Airport.
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Knotts will serve as Calspan's president.He served most recently as Calspan's senior manager of the flight and aerospace research group, and is also an engineering test pilot.
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Knotts and Pleban said their background with the company gave them the confidence to move into top leadership roles.
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For instance, Knotts said the new owners are purchasing a Lear jet that will be converted into an advanced flight simulator: the plane can be flown, and can be programmed to simulate other aircraft.Pilots will be trained to deal with scenarios that in the real world have led to crashes.
Knotts said it was difficult to get General Dynamics' approval to buy the jet, which will be the third such "in-flight simulator" in Calspan's lineup.When delivered, it should provide growth opportunities, by allowing Calspan to provide more training to civilian pilots.
Development of unmanned vehicles is another potential growth area, Knotts said.Similarly, the new owners say they see opportunities to expand Calspan's transportation-related business, and create more jobs in the company.
About 60 percent of Calspan's business comes from government customers and 40 percent comes from the commercial sector, a split the new owners say they are comfortable with.
Calspan's new owners say they will create a stock ownership plan that should provide capital for growth and expansion.It also expects to give employees an incentive to remain with the company and develop their inventions, rather than leave and start spinoff companies as many have done in the past, Knotts said.
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Two longtime managers of the Calspan operations, Knotts and Thomas Pleban, joined Yurtchuk in the buyout, and serve as Calspan's president and executive vice president, respectively.
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Knotts and Pleban anticipated that General Dynamics would sell the Calspan operations, before General Dynamics made the announcement.
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Knotts said Yurtchuk quickly agreed.
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Knotts, the Calspan president, said previous ownership didn't see the appearance of the complex a priority.
"I think that is a critical point, and that is what was missed before," Knotts said.
He said Yurtchuk understood the need for the new research center at the Niagara Falls airport to have the right image, since it will serve pilots from around the world.
For all of Yurtchuk's interest in Calspan's endeavors - the in-flight simulator, the transportation test facilities - he said he is content to play a supporting, background role, similar to a producer on a movie.Its current sales are $36 million, and he would like to see that grow to $50 million within three years, not counting any possible acquisitions.
"I see this company as being able to blossom and create a lot of jobs and do a lot of good work," he said.
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The investment group - two former Calspan executives, Louis Knotts and Thomas Pleban along with
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Knotts has been named Calspan president while Pleban is its executive vice president and Yurtchuk
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Knotts said the talks were amicable, so much so that of the 380 people working in the Genesee Street
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strategy," Knotts said.
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problems and provide its customers with cost-effective solutions," Knotts said.
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Louis Knotts stood last week in the atrium of a $12 million flight research center under construction at the Niagara Falls International Airport and pointed to the ceiling where he plans to hang a full-size replica of the first plane to break the sound barrier.
"It's going to be, as you can see, pretty spectacular," Knotts said as workers drilled in the background of the two-story entrance to the 55,000-square-foot hanger that now houses research planes for Calspan Corp.
Knotts, a Wheatfield resident who was part of a team of investors that last month bought out Calspan from its corporate owner, was eager to show off the nearly complete facility.
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But it was only a few years back when Knotts was wondering if the company could even survive in Western New York.
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"We had to cut our costs," said Knotts, Calspan's president."We were looking around at all these available spaces that were out of Western New York."
While there was free hanger space available at former Air Force bases across the country, Knotts, a Pennsylvania native who arrived in Western New York after earning a graduate degree from the Massachusetts Institute of Technology, knew his workers didn't want to move from the company's base on Genesee Street in Cheektowaga.
"The dilemma gets to be: No matter how much we may think it's more efficient to move somewhere else, if you can't get our people to move, it makes it really hard to relocate a very unique technology base like this somewhere else," Knotts said."So that's when we got the idea of looking for state money to build a new hanger up here."
But the project hit a snag in 2001 when lawmakers failed to pass a state budget Knotts had expected to contain funding for the Niagara hanger.
"I figured, well, we're in trouble," Knotts said.
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It was then that Knotts - along with fellow Calspan executive Thomas Pleban - began developing a plan.
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"It was becoming clear to General Dynamics that we did not fit with their business model," Knotts said.
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Last month, Knotts, Pleban and John Yurtchuk, president of Matrix, invested nearly $30 million in Calspan to buy the aeronautics and transportation testing group from a business unit of General Dynamics Corp.
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"If they wouldn't have, they clearly would not have invested in our technology, and we would have died on the vines," Knotts said.
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"The fact that we have autonomy - we're making our own strategic decisions on our business - means we can grow our business because it fits," Knotts said.
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