The more things change, the more they stay the same. The management buyout took effect October 9, 2003. However, other than removing the "Alstom" from the company name and returning to the well-known Schilling Robotics moniker, the only other change is a return to the high ROV industry profile the company enjoyed throughout the last decade.

Schilling Robotics is still headquartered at the facility in Davis, California, and all staff members have been retained. The purchase agreement also includes the employees and assets at the company's Aberdeen, UK, facility.

The product line still features the Remote Systems Engine (RSE), a set of fundamental building blocks for underwater control, communication, propulsion and actuation which began development in 1998. The RSE modules can be broadly applied to a range of deepwater machines, and form the basis for Schilling Robotics' line of ROVs.

The Quest all-electric ROV will soon be joined by the Quest UHD models, a new class of high-performance hydraulic work-class ROVs. Because the RSE building blocks are designed to work together, they allow parts commonality across a variety of devices.

Of course, Schilling first made its reputation by building high-quality ROV manipulators, and the company will still produce its four standard remote manipulator systems, the Titan 3, Orion, RigMaster, and Conan.

And now, as the company nears its 20th anniversary in 2005, its founders have once again assumed ownership. The ink was barely dry on the purchase agreement when an excited and exhausted Tyler Schilling sat down to answer our questions about the future of Schilling Robotics.

UW: Give us a brief history of your company.
TS: Wes Gerriets (VP of Marketing) and I started the company in 1985 as Schilling Development, to focus on the design of manipulator arms for the offshore oil and scientific markets. Shortly thereafter, we were joined by my brother Reuben, Tim Ranstrom, Ric Kilgore, and Brent Regan.

Our first product was the HV5F manipulator system, which was basically designed to work on Perry's Recon ROV. Customers liked the features and benefits of this model, but because they wanted larger, more powerful machines, we went on to develop the Titan 7F, Titan 2, and Titan 3 designs. These models rapidly became popular in the subsea industry.

Because we were attending robotics conferences and trade shows, our equipment also caught the attention of the US Department of Energy (DOE) market, and the Titan systems became standards in DOE technology demonstration products.

GEC Alsthom was looking to get into the US DOE market, and they became interested in us because of our DOE-related work. It was a good fit from our standpoint because GEC Alsthom could help us deploy our products globally and make larger investments in product development. They acquired us in December 1992.

In June 1998, GEC Alsthom went public as Alstom, and we became known as Alstom Schilling Robotics. During that year, we began a very large development program for the Remote Systems Engine, with the goal of designing a broadly applicable set of building blocks for the construction of any type of remotely operated subsea equipment.

In late 2001, Alstom completed a strategic review of company holdings. They decided that we no longer fit into their core business activities, and decided to put us up for sale.

So that brings us almost to the present. I've given a very brief history here, but the years have been full of hard work, occasional frustration, and much satisfaction. It's now hard to believe, but the year after next, we will celebrate our 20th anniversary serving the subsea industry.

UW: Your customers are glad to hear that the management team - indeed, the entire production staff - remains intact. When and how did the idea to buy Alstom out occur to the management team?
TS: As soon as Alstom performed their strategic review and decided that they were better off with cash than with us as a business asset, we set out to assist Alstom in selling the business industrially. I wanted to help them realize the best possible return for the investment they had made in us as a business and a management team.

After a year of unsuccessful attempts to sell the business industrially, I asked Alstom if they would entertain a management buyout. They encouraged this idea, and after a series of discussions, we reached an agreement in principle that was workable for both parties.

We've just recently converted that agreement in principle to an actual acquisition, and we are now Schilling Robotics.

Our management team has spent the last 18 years understanding the needs of various markets for remotely controlled deep-ocean machinery, delivering products and services that are considered "best in class" by our customers. The average number of years of service for our employees is eight, and one-third of our staff members have over 10 years of service. Given the specialized nature of the environment into which we deliver our products, this depth of experience is crucial.

UW: What do you have to say to those who may think a management buyout indicates a last-ditch effort to keep a company afloat?
TS: What we are feeling here is a sense of relief and excitement. Since almost two years elapsed between Alstom's decision to sell our business unit and our completion of the acquisition, the uncertainty was difficult for both our employees and customers. We're all just very happy to have the process behind us and get on with the future growth of Schilling Robotics. Also, all of our customers have responded enthusiastically to the announcement that we've repurchased the company.

To those who think that a management buyout is a last-ditch effort, I'd respond that it was never a matter of whether our company would stay afloat. From the time that Alstom decided that we no longer fit into their business plan, it was really just a matter of who the next owners would be. It is the marketplace's need and desire for a company's products and services that keep it afloat, not issues like whether a management team wants to buy a company back from a parent.

UW: What will change? Will you be focusing on any one of your areas of expertise (manipulators, complete ROVs, components), while dispensing with another?
TS: Our overall strategy will remain the same: to provide turnkey ROVs, Remote Systems Engine components, and manipulators. We designed the Remote Systems Engine to serve a wide range of customers who produce or use equipment in the deep ocean. This range extends from customers who need only components (because they do a lot of their own system design and integration) to customers who don't do system integration and therefore want complete, turnkey systems. We are now in a position to supply customers with components, pre-integrated subsystems, or complete turnkey systems.

UW: Where does the Remote Systems Engine stand at this point?
TS: We're very proud of the RSE and very excited about how custo
mers envision using it. So far, we've delivered five ROV systems based on the RSE, four to Canyon Offshore and one to the University of Bremen, Germany. We currently have numerous bids out for systems based on the RSE, ranging from ROVs to seafloor drilling systems. Within this collection of opportunities, we have customers who want us to supply systems that range in depth down to 36,000 feet (11,000m).

UW: Are customers using the Remote Systems Engine components as you originally envisioned? Have there been any odd applications that surprised even you?
TS: We have been approached by customers who have specific applications that we did not originally envision. However, the philosophy behind the RSE is that all remotely operated systems require a set of common functions (such as communications, control, power, and sensing), so we didn't really need to envision all of the possible end applications.

We recently bid on one application that we'd never previously considered, and it was very encouraging to discover that all but one of the system components could be filled by pieces in the RSE. This left the customer with the responsibility of designing a single piece of equipment for a complex system, and shows the real strength of the Remote Systems Engine.

Because people can create new systems based on our pre-developed and pre-tested hardware, they can perform much less system integration and field testing in creating equipment for virtually any application that they have in mind.

UW: Then the RSE became the basis for the Quest electric ROV. Was there any hesitation to become a full-fledged ROV manufacturer?
TS: At the very beginning, we did hesitate to create a turnkey ROV. However, we discovered that Canyon Offshore had ROV requirements that so closely matched what we were working to achieve with the Remote Systems Engine, that it quickly became obvious that the right thing was to create the turnkey electric Quest.

One big benefit to creating the Quest was that it gave us a much more refined context for developing the Remote Systems Engine. Instead of having the RSE abstracted across any number of applications, the Quest forced us to solve system integration issues just like those our customers would be forced to solve in the future. So it was actually a very good set of circumstances for us.

UW: Quest hit big with Canyon Offshore, but other than a couple of other organizations, that seemed to be it. Did it sell to your expectations? And how much did an adverse oil and gas market just after its inception hinder sales, if at all?
TS: As I mentioned earlier, Canyon had, unknown to us, conducted a study to determine requirements for their next generation of ROV. I guess great minds think alike, because when we compared notes, there was an incredibly close match. After Canyon's purchase, the University of Bremen ended up falling in love with the Quest. The university had been shopping for an ROV for several years, and they liked the Quest for many of the same reasons that convinced Canyon to buy it.

The downturn in the oil and gas market has certainly affected Quest sales. But we entered into this market knowing that it is cyclical, and we're in it for the long term. This isn't a "couple of years" proposition - we've designed our products over the horizon of a decade or more.

UW: Where does the Quest ROV line stand now, several generations later? There's now a hydraulic version?
TS: Since its initial delivery in 2001, we've made a multitude of modifications and improvements to the Quest system that are based on feedback from Canyon's field operations. The system now has increased area for tooling installation, and we've made numerous additions to the control modes and features, such as allowing more sophisticated automatic control modes for station-keeping.

For the better part of a decade, people have been used to auto-heading, auto-depth, and auto-altitude. Now, with the new StationKeep addition to the control system, the operator can very precisely hold position relative to the seafloor and very precisely move the ROV.

We recently introduced a new ROV model, the Quest UHD (for ultra heavy-duty). This hydraulic propulsion model uses the same RSE control components as the electric Quest, but the electric ring thrusters and high-frequency power system have been replaced with Sub-Atlantic's power packs and hydraulic thrusters.

We designed the Quest UHD because some of our customers really liked our control/telemetry package and the modular nature of the Remote Systems Engine, but needed to perform tasks requiring very large amounts of hydraulic power for tooling applications such as suction piling and other high-flow hydraulic applications. With the addition of the Quest UHD, we'll be able to address all segments of the work-class ROV marketplace.

UW: What is your analysis of the overall state of the new-build ROV marketplace as we enter 2004? Will we ever get back to the boom times of the mid-to-late 1990s, when there were new models everywhere?
TS: The new-build ROV market is particularly slow now. I doubt if we will ever again see a short-term buildup like we saw in the late 1990s, which was due to a pretty special set of circumstances. That boom now leaves us with a large supply of old hardware in the market.

Thankfully, our Remote Systems Engine business model doesn't make us completely dependent on our customers' new-build aspirations. The RSE equipment suite is equally beneficial for refurbishing older systems with new control and power products that allow customers to get additional useful life out of old ROV equipment.

Again, Schilling Robotics is in this for the long term. We know this is a cyclical market and that there will be periods of high and low demand for equipment. We've concluded that we must organize ourselves so that this reality isn't a problem for us.

UW: Let's talk about your original area of expertise, manipulators. Where does this area of your business stand?
TS: Manipulators are and will continue to be a key portion of our business. We have an installed base of more than 1,100 systems. Now that we also produce turnkey ROV systems, we understand better how the manipulator interrelates with the ROV's control and operation. This will strengthen the quality and performance of our ROV manipulators.

UW: hat's next for the ROV manipulator? Any tricks up your sleeve you can let us in on?
TS: We are taking much of what we learned in developing the Remote Systems Engine and mapping it back into the manipulator portion of our product line. Modifications will likely take the form of new manipulator electronics and control systems. We are also taking a hard look at how to integrate increased use of titanium in our product line, since titanium has been so important to the durability of the Titan manipulator series. We just need to find a way to economically apply titanium to the rest of our manipulator products.

UW: Is Schilling concentrating on AUVs in any way?
TS: It is very likely that before long, manipulators will be added to AUVs. These manipulators probably won't look like the current ones, since in this application they won't necessarily act as an extension of a human operator.

AUVs were specifically considered in the overall RSE design, and we are targeting that market as an obvious application for sales. In fact, some RSE components are currently installed on AUVs in the field.

UW: Let's talk about you. Can you describe your management philosophy, and has it changed over the years?
TS: My management philosophy, which is fairly simple, involves envisioning the end point - where you want to get to - and then working out how to get there. It's typically easy to imagine and discuss all the problems involved in getting to a specific endpoint, but I always find it more enjoyable to work out the solutions along the way.

The biggest change in my style over the years has been that, when we first started, I believed that somehow I knew everything. As the years have gone by, I've realized that I know less and less, so it's been a continuous learning experience for me. One of the biggest lessons I've learned is the key ingredient to success in any endeavor is persistence.

UW: Do you regret the Alstom experience at all? Is there anything you would have done differently?
TS: I have no regrets regarding our relationship with Alstom. They were never anything but very supportive. I wish them all the best in their efforts to restore their company's performance. The only thing I would have done differently during our association with Alstom is to make more contacts in their broad network of worldwide offices. We could possibly have served our customers better by taking advantage of Alstom's regional presence in our various marketplaces.

UW: What is next for Schilling Robotics?
TS: Very exciting times are ahead for our company. Each and every one of our employees will have an opportunity to acquire an ownership stake, and I think the benefits of this arrangement can only add to our reputation as a responsive, customer-committed company. We are really looking forward to creating an ever-expanding list of applications for the Remote Systems Engine.