The failed Christmas Day attempt to blow up a Detroit-bound airliner has led to more interest in machines that can better detect potential explosives hidden on passengers’ bodies.
And that’s been good news for OSI Systems Inc., which manufactures the machines and has seen shares jump nearly 20 percent since the thwarted attack.
Rapiscan Systems, a division of the Hawthorne company, manufactures a full line of screening machines, including its flagship Secure 1000 Single Pose unit, which offers full-body imaging. The scans rely on electromagnetism and expose passengers to minute amounts of radiation.
To complete the scan, a passenger walks between two panels that generate a computer-aided image in seconds, streamlining the screening process. However, the image is so detailed that the machines have raised a storm of controversy over privacy, stagnating their popularity.
Even so, the U.S. Transportation Security Administration placed an order in October valued at $25 million for Rapiscan’s Secure 1000 Single Pose unit. And now with a 23-year-old Nigerian man accused of sewing explosives into his underwear – something OSI said its machines could have detected – the company is bracing for more orders. Indeed, officials in Amsterdam, the Netherlands, where the flight originated, announced that they will install body scanners at all airports.
Moreover, President Obama and other U.S. lawmakers have called for an investigation evaluating the effectiveness of current security measures, which could result in the installation of more full-body imaging units made by OSI.
“We initially had some trouble getting people to be comfortable with the imaging technology but we think this threat will get people to put security first over concerns with how their body looks in the scan,” said Alan Edrick, the company’s chief financial officer. “We think that this development will mean more orders.”
It’s not clear, though, that OSI will get all or even the lion’s share of orders. Competitors include Smiths Group Plc, a London company that is the world’s largest scanner maker, and L-3 Communications Holdings Inc. of New York.
Still, investors are high on OSI. On Christmas Eve, shares were trading at $22.02. On the first day the stock market opened after the attack, Dec. 28, shares rose 11 percent to $24.47, the biggest jump all year. The stock closed Dec. 30 at $27.46, up nearly 20 percent from the prior week.
OSI has so far delivered 40 of 150 scanners previously ordered.
C-17 Order
Boeing Co.’s Long Beach plant where 5,000 people assemble the C-17 cargo plane got some good news right before the holidays, with President Obama signing off on 10 more orders of the plane.
The president signed a $636 billion defense budget Dec. 19 that included a $2.5 billion order for the production of 10 more of the Globemaster jets, which is expected to keep the Long Beach plant operating through mid-2012.
The extra funding was nearly derailed this year by powerful opponents, including Defense Secretary Robert Gates and Arizona Sen. John McCain, who twice tried to cut funding for the C-17, which McCain considers a “pork barrel project.” The president also had been a critic of the need for the plane, but signed the bill anyway. The C-17 program had widespread bipartisan support as assembly requires parts from suppliers in 44 states – supporting an additional 25,000 workers.
Aecom’s Busy December
Engineering and design firm Aecom Technology Corp. has acquired Glatting Jackson Kercher Anglin Inc., an Orlando, Fla., civil engineering, planning and landscape architecture firm.
The acquisition of Glatting Jackson’s 90 employees is expected to help Aecom boost service to clients in environmental sciences, landscape architecture, planning, transportation and urban design, the downtown L.A. company said in a statement.
In other Aecom news, the company recently announced winning two multimillion-dollar transportation contracts. One was worth $30 million from Prairie Link Constructors to complete the design of a 6.5-mile link of Texas State Highway 161 around Dallas. The other was a $20 million contract in Canada to provide program management services for a light-rail transit extension in Edmonton, Alberta.
Northrop Changes
Northrop Grumman Corp. has appointed three executives to new positions within its Electronic Systems sector, the Century City company said last week.
Gloria A. Flach has been appointed vice president and general manager of Northrop’s Targeting Systems Division, while John C. Johnson has been named vice president and general manager of the Intelligence, Surveillance, Reconnaissance Systems Division. Jeffrey Q. Palombo has been appointed vice president and general manager of the Land & Self-Protection Systems Division.
Staff reporter Francisco Vara-Orta can be reached at [email protected] or (323) 549-5225, ext. 241.
