New Boss Projects Lively Future for GA Technologies

Neal Blue, who last week concluded a complex $50-million deal to purchase GA Technologies, has acquired a company in transition.

Dramatic change has become a way of life at the La Jolla-based company that, since 1968, has served as the research arm for a succession of major oil companies.

“Some of us will view this change as exciting,” President Kerry Dance observed in a February memo that outlined the company’s changing objectives and offered an early retirement plan to employees. “Others may view it as threatening. Nevertheless . . . things change.”

A major change is that, for the first time in three decades, GA Technologies is operating without the deep pockets of General Dynamics, Royal Dutch Shell, Gulf Oil and Chevron, which poured $1 billion into GA Technologies, creating one of the nation’s outstanding scientific research organizations.

GA Technologies’ campus-like setting near UC San Diego also served as a springboard for a long line of scientists, engineers and researchers who left the company to create more than 20 high-technology companies in San Diego.

GA Technologies’ revenue, however, began to slip as the oil industry hit rough times, the nation’s appetite for nuclear power waned, and federal budgets were trimmed. GA responded by refocusing on defense and aerospace research, as well as the commercialization of various nuclear technology research projects.

The company moved into nuclear and hazardous waste disposal research, began serving as a consultant to the utility industry and created a technology that safely destroys outdated weapons. Using technology acquired in its fission and fusion research, GA Technologies also began pushing for a share of the Defense Department’s increasingly lucrative “Star Wars” research contracts.

Although the company remained profitable, revenue fell from $169 million in 1984 to $154.5 million in 1985.

In his February memo, Dance served notice that the company’s survival depends on its ability to reshape itself as a “dynamic, profitable organization which can take advantage of new, high-tech opportunities and compete in the marketplace.”

“Our efforts in exploring the frontier of science for scientific discovery must be used to help to expand the company’s business,” Dance told employees.

Blue has repeated that theme since announcing his purchase of GA Technologies from Chevron in August.

Blue, along with his brother, Linden, owns Cordillera Corp., a privately held Denver-based company with interests in real estate, oil, gas and natural gas utilities.

A Department of Energy official last week described the Blue brothers as intelligent men who have an aptitude for quickly understanding GA Technologies’ complex research programs.

Neal Blue views his chief role as the manager of GA Technologies’ technology “portfolio” and will leave day-to-day business operations to the scientists, engineers and laboratory personnel he recently described as the company’s “fountain of scientific excellence.”

GA Technologies has a handful of technologies that could be profitably commercialized, but Blue said the company needs about a dozen profit centers, some of which eventually would be operated as independent subsidiaries.

The company might sell off some existing technologies, including a furnace designed to burn toxic wastes. GA Technologies has been seeking U.S. Environmental Protection Agency approval to conduct test burns in a prototype on the company’s grounds.

GA Technologies also will develop partnerships with other companies, especially in the competitive defense contracting arena, which Blue described as “extremely attractive.”

The company that for nearly two decades enjoyed the financial resources of a trio of large oil companies must “learn to become more efficient,” said Blue, who envisions GA Technologies as a “more efficient organization (that will be) structured to yield more optimum results.”

Blue predicts that a lean, well-managed GA Technologies will prosper.

“The basic advantage of new ownership is that we don’t have to rely upon an ownership that is generally involved in another kind of business with little time to actively pursue GA’s growth plan,” said Blue, who described business management as “a dynamic concept.”

For Blue, effective management includes lavishing attention on “self-starters who know how to run specific operations effectively.”

Blue is building on the foundation laid earlier this year by Dance, who told employees that remuneration would be “directly linked to individual performance in meeting clearly defined objectives and contributing to the company’s financial success.”

Blue also promises to reward those who are “turned on by the entrepreneurial spirit” and “continued and expanded opportunities (for personnel dedicated to) scientific excellence.”

However, Blue intends to abandon GA Technologies’ practice of conducting research into technologies that subsequently were commercialized by other companies. Instead, Blue intends to bolster profit margins by “the rapid development and commercialization” of new technologies within the company.

Blue said GA Technologies will continue to make “contributions to high-technology advances,” just as it did during its days as a high-technology research outfit. But he promised that, in addition to pure research, GA Technologies will bolster its profitability by commercializing those technologies.