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$100-Million Deal Puts Firm in Driver's Seat : Trade: In a model of defense conversion, a device using military technology will show Japanese motorists their exact locations.


SAN DIMAS — In an agreement with three Japanese companies, a small high-tech firm in San Dimas will develop and build a device that will continuously show a driver the vehicle's exact location on a computer map.

Magellan Systems and the three Japanese companies will share the costs of developing the product, but Magellan will maintain all rights and ownership to the technology.

Magellan officials said the deal will generate about $100 million in exports for the company in the next five years and create 500 to 750 jobs.

About 10% of those jobs will be at Magellan itself. The rest will be at various suppliers in Southern California.

U.S. Commerce Secretary Ronald H. Brown attended the announcement ceremony Thursday and hailed the agreement as a perfect example of the benefits of cooperation in international trade.

Brown is the Clinton Administration's point man on the recovery of the California economy, and he has been pressing the importance of trade, defense conversion and environmental technology at various events in the state.

Magellan Systems is one of a handful of companies in the country working to adapt the global positioning system for commercial and civilian use. The system is a set of 24 Defense Department satellites that provides a worldwide navigation system for military use.

"Magellan and their Japanese partners aim to produce a device so small and so cost-effective that it will become a standard feature in an automobile," Brown said. "The same system that guided troops through the Saudi desert will soon guide commuters through downtown Tokyo.

"For someone like me, who hates to admit that he's lost and never asks for directions, I can't wait for this system," he said.

Magellan Systems President Randy D. Hoffman said he hopes his company's success could be used as a model for the conversion of defense technology to commercial use.

The three companies that will share the costs of developing the product with Magellan Systems are Nippondenso, a supplier to Toyota; Xanavi Informatics, a supplier to Nissan Motors, and Toshiba, the electronics company, which would sell the device directly to consumers. Representatives of the three companies attended the ceremony at Magellan's offices in San Dimas.

Magellan officials said the 7-year-old company will build the device over the next several months and begin shipping the products next year. It is scheduled to appear in cars in Japan in 1995 or 1996.

The system is not expected in cars in the United States until after 1996 because little of the country has been mapped on computers, according to Magellan spokesman Jim White.

The global positioning system uses signals from the satellites to determine latitude, longitude and altitude with an accuracy of five to 10 meters. The new device will then convert that information to a position on a map on a computer screen in the car.

Brown said the Magellan deal lays the groundwork for a $5-billion industry that may eventually employ 100,000 Americans.

"With 300 million cars on roads around the world today, the work being done by Magellan is the first step toward entering a tremendous new market," he said.

Magellan has been selling global-positioning navigational systems for use in boating, surveying, aviation and outdoor recreation since 1989. The company's annual sales are $30 million, and it employs 150 people, nearly a third of whom are former defense and aerospace workers.

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