Ceradyne (CRDN) seems to have laid a bit of an ambush for its rivals in the red-hot business of building trucks to protect U.S. soldiers overseas.Late last year, the Costa Mesa, Calif.-based company -- best known for its ceramic-based body armor worn by troops -- quietly set out to develop the toughest military truck yet. Ceradyne had just teamed up with Ideal Innovations, a Washington, D.C.-area firm staffed by accomplished inventors with rich military backgrounds, to create a vehicle that could withstand hits from sophisticated "explosively formed penetrators," or EFPs. The idea was to give Ceradyne a leg up on rivals like Force Protection ( FRPT) in the government's huge mine-resistant, ambush-protected vehicle contract. At the time, Ladson, S.C.-based Force Protection and other defense contractors were focusing on threats posed by cruder, less powerful "improvised explosive devices," or IEDs. So when U.S. officials originally sought vehicles designed to counter IEDs, Ceradyne never even bothered to submit a bid. Instead, Ceradyne continued developing a next-generation vehicle that would prove ideal for the military's escalating needs. As a result, Ceradyne has now emerged as a surprise favorite for early awards under the greatly expanded MRAP II program. Altogether, the value of the program has soared to $20 billion. "Some might say we missed the boat" on MRAP I, says Marc King, vice president of armor operations at Ceradyne. "But others might say we were ahead of the requirements because we saw a different threat and were getting ready for something we thought
Quick FixWhen discussing the Bull, King actually gives more credit to Ideal Innovations -- and the Army itself -- than he does to his own company. After all, those players began working on the Bull long before Ceradyne ever entered the picture. As early as 2004, Ideal Innovations had noticed the rising threat posed by EFPs. So when the Marine Corps expressed the need for a solution the following year, the firm immediately went to work. By then, Ideal Innovations already enjoyed a solid relationship with the military. Before founding the firm in 1998, President Robert Kocher had established the Army's Quick Response Office -- designed to supply cutting-edge technology to soldiers in the field -- and even helped develop the armored Humvee. "People didn't think that could be done," Kocher says, recalling his work on the popular military vehicle more than a decade ago. "But we did it -- and we did it quickly." Today, Kocher has surrounded himself with a team of accomplished military experts at Ideal Innovations. Vice President Loran Ambs previously held a key post at the Army's Rapid Equipping Force, popularly known as REF, which currently pursues new technologies for the military and quickly embraced the concept behind the Bull. The firm's chief technology officer, Craig Arndt, served as a senior scientist and prime consultant for the Army's REF as well.
Strong PartnerTo help build its new MRAP vehicle, Ideal Innovations needed a fast partner as well. "Of the four companies I went to, I picked Ceradyne because the people there had the best engineering skills, they understood the threats and they had integrated vehicles before," Kocher says. Plus, "the other companies had issues with the timeline. They wanted a year, and we said it had to be five months." Ceradyne, he adds, "did a super job" of supplying the Bull on that tight schedule. By this spring, Ceradyne had delivered the vehicle for government testing. The Bull survived eight hits that were so powerful, Kocher says, traditional MRAP vehicles might have succumbed to just one. Last week, King expressed "a high level of confidence" that the Bull would also fare well in formal MRAP II testing -- if the vehicle faces additional trials at all. Some experts feel that the Bull, already tested by the Army and promising much-needed protection for U.S. forces, could skip that process altogether.
-- although it has placed no orders with the firm just yet. Still, Navistar ( NAVZ) participated in a similar meeting with Freedom Technologies before going on to surprise people with the biggest MRAP win so far. "They placed a big order for our system a week or two before they got their own order," says Shawn Baker, the Freedom Technologies representative who met with both Navistar and Ceradyne. "They weren't saying anything specific at the time. ... But they expected things to go well. "So when they won the award, it wasn't a total surprise."