Edina robot firm hit by defense budget cuts

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: January 22, 2014 - 9:23 PM

ReconRobotics has lost two top executives and cut its staff by two-thirds.

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ReconRobotics CEO Alan Bignall demonstrated the Scout XT micro robot in 2012. Sales to the defense industry have plummeted.

Photo: Bruce Bisping •Star Tribune file,

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ReconRobotics, the much-noticed maker of lightweight, self-propelled robots for armed forces and security agencies, has let go about two-thirds of its 60 employees and in-house contractors.

The head of the Edina company, born of University of Minnesota robot research, blamed the layoffs on the failure of the U.S. Army to buy, as expected, 1,000 Recon Scout robots for $13 million in 2013. CEO Alan Bignall said Wednesday in an interview that the privately held company, which peaked at about $22 million in revenue in 2012, struggled last year as defense spending was affected by the “sequester” forced when Congress and the White House couldn’t reach a budget deal.

Bignall said the company doesn’t expect the Army to increase robot purchases this year as it reduces troops in Afghanistan.

“We were on a roaring success for six years, and then it came to a halt, and I’m reacting to the market,” Bignall said Wednesday. “We are under 20 employees. Our biggest customer was the U.S. government.’’ Bignall said Recon expects to recall at least some of the laid-off employees and that business will improve as some federal business returns and as it introduces two products this spring.

Recon, which was a Minnesota Tekne Award winner in 2012, introduced its 1.4-pound Scout XL at the 2012 Counter Terror Expo in London. The device is used by law enforcement and military personnel to conduct reconnaissance on rough ground as well as within cluttered indoor environments. Security forces in Russia are expected to use Recon technology at the Winter Olympics next month.

Two high-level Recon executives left the company last year. Andrew Borene, a lawyer and former U.S. Marine officer, was the company’s director of business development. Borene also is chairman of Robotics Alley, a trade group formed partly by Recon to promote robotics technology in the Upper Midwest. Borene, whose expertise is in privacy and intelligence law, has relocated to Washington, D.C., to teach and consult. He declined to discuss specifics of his departure.

“I remain very excited about the overall prospects for U.S. economic growth and local job creation in the fields of robotics, unmanned systems and artificial intelligence,” Borene said in an e-mail statement.

Chief Operating Officer Patrick McKinney, who could not be reached Wednesday, also left Recon and took a job with another area company.

Bignall said Recon is owned by himself and about 100 other investors. The business disruption has for now scotched Recon’s plans to sell to a larger technology or defense firm. It is raising capital.

“We are raising cash as we speak and people are investing,” Bignall said.

 

Neal St. Anthony • 612-673-7144

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