AI trims operations under new president

Acoustic Imaging's new president John T. Kingsley has wasted littletime making changes at the Phoenix-based ultrasound vendor. Shortlyafter replacing Reinhard Warnking in January, Kingsley presidedover AI's second downsizing in as many years, reducing the company'spayroll by some 65 employees.

The layoffs are part of an effort to reduce expenses and makeAI more competitive in an increasingly price-conscious ultrasoundmarket, Kingsley told SCAN.

"We needed to get our expenses in line," Kingsleysaid. "We were acting like a little bit bigger company thanwe really are. We just did the right thing for our overall business."

About 35 of the laid-off employees were temporary workers hiredfor the introduction of the 5200 S, AI's color-flow scanner thatbegan shipping last August. Six employees resigned, and 25 othersin various departments in the company were laid off. The reductionsbring the size of AI's work force to 305.

AI laid off 49 employees in the fall of 1991 as part of itsintegration with Dornier Medical Systems (SCAN 10/9/91). Dornierbought a controlling stake in AI in 1989 (SCAN 9/27/89).

Warnking, Kingsley's predecessor, was appointed head of AIin 1991. The company would not comment on the reason for Warnking'sdeparture.

During Warnking's tenure, AI was forced to scale back its effortto introduce a high-end color-flow scanner based on a maximum-entropymethod (MEM) algorithm (SCAN 1/29/92).

AI has also experienced delays in getting a three-dimensionalultrasound workstation on the market. In December, the Food andDrug Administration requested additional information on the workstation's510(k) application, which was filed in July. The company's applicationwas otherwise in order, according to Kingsley.

Kingsley declined to comment on the status of the MEM scanner,the 7200 S, other than to say it is still in development. Thecompany has been burned in the past after being unable to deliveron high expectations for the system.

"When we have the products and when we've done the clinicalresearch and the marketing research, we'll announce them and we'llsell them," Kingsley said.

Kingsley joined AI last March as vice president of researchand development. Before coming to AI he was in product developmentwith Biotope, a venture capital firm in Redmond, WA.

During the 1980s, Kingsley worked for ATL and its ADR divisionas director of product development for the Ultramark 4 and ashead of worldwide operations.

Under his stewardship, AI will focus on the price performanceof its products, marking a shift from the company's previous emphasison technological innovation.

"Our strengths are that we have a very competitive product,and we can price it very effectively for the marketplace,"Kingsley said. "The medical industry is going to have toprovide performance at a lower cost and a higher value. That'swhat we're going to try to do."