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CMU closing its Carnegie Mellon Research Institute

Institute's enterprises to be absorbed, shut or spun off

Sunday, April 01, 2001

By Mackenzie Carpenter, Post-Gazette Staff Writer

The Carnegie Mellon Research Institute -- where robotics, art conservation, engineering and other sciences are marketed to businesses -- will cease to exist in its present form.

By the end of next year, its seven different units will be dispersed within Carnegie Mellon University, spun off to outside companies or shut down.

The institute's 130 employees received letters Friday notifying them of the university's decision to phase out the operation by the end of 2002. No layoffs were announced and university administrators stressed that no decisions on job cuts had been made.

The institute, which conducts research on a contract basis for businesses, was losing money, said Jared Cohon, Carnegie Mellon University's president.

While declining to provide actual dollar amounts, Cohon said in a telephone interview yesterday that a restructuring was necessary because of the university's recent decision to focus its strategic plan more narrowly.

"CMRI as it now exists does not coincide exactly with the strategic directions that Carnegie Mellon needs to move in," Cohon said.

He added that Carnegie Mellon's strategic plan, which was formulated in 1998, had been revised during the past few months. "The university has identified for itself a relatively small number of directions it wants to move in," such as biotechnology and computers, Cohon said.

"Over the course of the next year, and we expect this will take about a year, we'll be reviewing all that CMRI does" before any decisions are made about the fate of each of the institute's seven individual units.

"We're not taking this 130-employee facility and putting it out of business."

The Center for Artists, Materials and Conservation, which works with museums to preserve paintings, for example, is almost certain to remain just as it is. "It's a one-of-a-kind operation and they do superb work," Cohon said.

Six years ago, the institute opened, amid much fanfare, in a gleaming five-story building on the grounds of the Pittsburgh Technology Center in Hazelwood. But, in fact, it has been in business since 1967 when it succeeded the Mellon Institute, which had pioneered the industrial "lab-for-hire" and created new products for businesses, from silicone for Dow Corning to antifreeze for Union Carbide.

For years, the institute had suffered from poor management, loss of corporate clients and lack of publicity. When its current director, Ted Willke, arrived in 1997, the institute was rumored to be on the verge of closing. But by last May, Willke seemed to have turned things around.

The institute was profitable, officials said. The budget had almost doubled, from $9.5 million to $15 million, and the number of employees had increased from 90 to 130. While part of a university, the institute was now, at Willke's urging, behaving more like a business. It aggressively marketed its services, avoided unprofitable assignments and charged more for its work.

Its seven different research units handled projects ranging from improving truck safety with driving simulators to preserving artistic masterpieces to helping newspapers such as the New York Times and the Philadelphia Inquirer use robotics in their production facilities.

Still, as a separate entity in a $16 million building, the institute was not financially self-sustaining. Cohon declined to speculate why.

While Wall Street's technology stocks have taken a dive in recent months, Cohon said he wasn't sure what impact the economy may have had on the institute's profitability.

He noted, however, that businesses seem to have been spending less for applied research -- the development of products directly for corporations -- than they used to.

"It's a hard business to make a go of," he said.

Asked about the number of jobs that would be affected, Cohon said, "I can't make any predictions. I just don't know.

"It's regrettable. We don't want anyone to lose their jobs. We think of (this decision) as trying to improve what they do.

"Let me emphasize again, those things that are strategic, sustainable, which line up with our mission we will keep. But the world has changed, the university has changed, and we need to move in directions that are more strategic."



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