Government funds firm selling missile components to US

Rakon has a 60 per cent global market share in crystals for GPS. A tenth of its work is military based. Picture / Martin Sykes

The Government is funding an Auckland company which supplies the United States military with technology to help navigate smart bombs used in the "war on terror".

Rakon manufactures quartz crystals for the US company Rockwell Collins to use at the heart of global positioning systems (GPS) in smart bombs.

Although Rakon - winner of this year's New Zealand Trade and Enterprise (NZTE) export awards - will not confirm it, its technology is likely to have been used in the US invasion of Iraq, a war strongly opposed by the New Zealand Government.

NZTE is the Government's taxpayer-funded national economic development agency.

Rakon marketing director Darren Robinson said no Government grants were used to develop products supplied to the military.

The family-run company last year earned revenue of more than $70 million. Ten per cent of Rakon's work is military-based.

It enjoys a 60 per cent global market share in crystals for GPS.

Mr Robinson said quartz crystals designed by Rakon were used for frequency-control devices at the heart of GPS technology, in cellphones and in other electronic equipment.

The technology also went into "smart bombs, and missiles" for the US military, he said.

NZTE was not helping Rakon with the military side of its business.

NZTE, which applauded Rakon in a recent media release as "a problem solver for the world", approved funding for the company of $59,412 for a Growth Services Application in September last year, for the US and European markets.

The fund is intended to help with new initiatives and new directions aimed at having a significant impact on the business leading to substantial, sustained growth.

"They [Rakon] are our client, so we work alongside them in a number of different ways," said NZTE spokeswoman Fiona Acheson.

She said Rakon had still not uplifted the funding as the project had been delayed at the company's request until next March.

Another Government body helping Rakon is Technology New Zealand (TechNZ).

TechNZ is a part of the Government's Foundation for Research, Science and Technology, promoting high-technology companies.

Northern region manager Suki Siriwardena said TechNZ had given Rakon a Technology for Business Growth (TBG) grant of $351,000.

TechNZ had also given Rakon a TBG for $183,000 in 1996, two student industry fellowships - "about $4500 each" - and two Tech-link projects, worth about $3000, she said.

Mr Robinson said he approached Rockwell Collins to offer technology for use in GPS systems. "They needed a good crystal for their GPS application, so that's where they were interested in ours."

After Rockwell Collins military engineers endorsed his product, the company was asked to develop a "temperature-compensated crystal oscillator" for the US military.

The crystals are used in GPS guidance and navigation systems.

Asked if the company invented technology specifically for the US for smart bomb missiles, Mr Robinson said it did.

Smart bombs have played a major part in the US war on terror in Iraq and Afghanistan.

They are guided by GPS technology to zero in on targets to a specific longitude and latitude.

Asked if the technology was being used in Iraq, Mr Robinson said the company "didn't really want to draw attention to where they [the US military] are using it".

"We don't want to become a target," he said.

The Labour-led Government opposed the conflict in Iraq, but has been helping to rebuild the nation's infrastructure.

New Zealand refused to join the US-led war, as the invasion was not sanctioned by the United Nations.

Prime Minister Helen Clark last month told a Grey Power meeting in Tauranga that the war was "wrong".

The Rakon products are apparently not covered by the Ministry of Foreign Affairs and Trade's "strategic goods" net, which includes items for military use.

The ministry said Rakon oscillators and crystals were not on the list, so did not need export permits.

Although Rakon products could be used in military items on the list, export controls did not apply to goods made overseas.

Export success

* Rakon won the supreme prize at the NZ Trade and Enterprise Export Awards this month.

* The Auckland-based family business started in a home basement 38 years ago and now makes more than $60 million a year in export earnings.

* The privately owned company was founded by Warren Robinson to manufacture quartz crystals for the local VHF and marine industry by hand.

* It now employs about 500 people in its Auckland headquarters and is recognised as the best producer of high-performance crystals and oscillators in the world.

- NZPA