COVINGTON & BURLING

1330 AVENUE OF THE AMERICAS		NEW YORK		BRUCE C. BENNETT
NEW YORK, NY 10019		WASHINGTON		TEL 212.8411060
TEL 212.841.1000		SAN FRANCISCO		BBENNETT@COV.COM
FAX 212.841.1010		LONDON
WWW.COV.COM		BRUSSELS

January 9, 2006

Ms. Angela Crane

Branch Chief

Mr. Martin James

Senior Assistant Chief Accountant

Ms. Julie Sherman

Staff Accountant

Securities and Exchange Commission

Division of Corporation Finance

Station Place

100 F Street, N.E.

Washington, D.C. 20549

Re: The GSI Group, Inc.

Form 10-K for the year ended December 31, 2004

Filed April 15, 2005

File No. 333-43089

Dear Ms. Crane, Mr. James and Ms. Sherman:

I write on behalf of our client, The GSI Group, Inc. (“GSI” or the “Company”) to confirm representations made by and on behalf of the Company during our most recent call with you, held on December 22, 2005. The following is intended to confirm statements made to you in our prior letters of August 11, 2005, September 28, 2005 and December 9, 2005.

Company Accounting

The Company records inventory at the lower of cost or market. To achieve market value for slow moving inventory, the Company records a reserve for the value of on-hand inventory deemed to be slow moving and likely to become obsolete. Due to the value of the reserve being estimated based upon the value of specific SKU’s of inventory, this method of accounting results in substantially the same net value of inventory and cost of sales as the specific write-down method recommended by SAB Topic 5bb. Attachment 1 illustrates this point.

COVINGTON & BURLING

January 9, 2006

Page 2

Specifically, Attachment 1 illustrates the results of the two inventory tracking and accounting methods detailed above in a hypothetical situation. The attachment illustrates the accounting for the sale of two types of inventory items: regular non-reserved and reserved excess. The regular inventory began at 100 units, 30 of which were sold, resulting in 70 units remaining at the end of the illustration. The excess inventory began at 10 units, which value comprised the beginning reserve, and all were sold resulting in no ending excess inventory quantity and no obsolete inventory reserve amount.

The balance sheet and period results achieved by utilizing the Company's accounting policy would be consistent with the balance sheet and period results achieved by utilizing the specific write-off method of SAB Topic 5bb, so long as the value of an underlying inventory item once reserved is removed from the reserve calculation if and only if the underlying inventory item is sold (in which case it would be charged to the period income statement at full cost as part of Cost of Goods Sold) or discarded (in which case it would be charged to the period income statement at full cost as a write off).

Application of SAB Topic 5bb in Future Periods

The Company acknowledges to the Staff that it is aware of and understands the provisions of SAB Topic 5bb. The Company also confirms that it intends to ensure its compliance with SAB Topic 5bb in future periods.

The Company also intends to explain in future filings the effect of sales or disposals of obsolete inventory on the Company’s reported Gross Margin and Net Income.

COVINGTON & BURLING

January 9, 2006

Page 3

* * * * * * * * * *

The Company is hopeful that this letter is helpful to the Staff, and stands ready to further discuss this issue with you at your earliest convenience. As we have discussed, the Company is anxious to resolve this issue so that it can seek acceleration of effectiveness of its pending Registration Statement on Form S-4, with respect to which penalty interest is accruing pursuant to the terms of the related Registration Rights Agreement. Please call me at (212) 841-1060 once you have had a chance to review this letter

Sincerely yours,

Bruce C. Bennett

cc: Mr. Michael Choe

Charlesbank Capital Partners, LLC

Mr. Randall Paulfus

The GSI Group, Inc.

Mr. Leonard Eschbach

BKD, LLP

ATTACHMENT 1

Reserve Method of Accounting (employed by the Company)
Beginning Inventory								Sales Through the Period						Ending Inventory
		Quantity On Hand		Cost Each		Total Cost on Hand				Quantity		Cost				Quantity On Hand		Cost Each		Total Cost on Hand
Regular (non-reserved)		100		$30		$3,000		Regular (non-reserved)		30		$900		Regular (non-reserved)		70		$30		$2,100
Excess (reserved)		10		$30		$300		Excess (reserved)		10		$300		Excess (reserved)		-0-		$30		$-0-
Total		110				$3,300		Total		40		$1,200		Total		70				$2,100
Gross Inventory						$3,300		Gross Cost of Sales				$1,200		Gross Inventory						$2,100
Reserve (Cost of Excess)						-$300		Change in Reserve				-$300		Reserve (Cost of Excess)						$-0-
Net Inventory On Hand						$3,000		Net Cost of Sales				$900		Net Inventory On Hand						$2,100

Entries:		DR		CR
Cost of Sales		$1,200
Inventory				$1,200
To record cost of items sold
******
Reserve		$300
Cost of Sales				$300
To record the change in reserve
******

Specific Write-off Method of Accounting (SAB Topic 5bb)
Beginning Inventory								Sales Through the Period						Ending Inventory
		Quantity On Hand		Cost Each		Total Cost on Hand				Quantity		Cost				Quantity On Hand		Cost Each		Total Cost on Hand
Regular (non-reserved)		100		$30		$3,000		Regular (non-reserved)		30		$900		Regular (non-reserved)		70		$30		$2,100
Excess (reserved)		10		$-0-		$-0-		Excess (reserved)		10		$-0-		Excess (reserved)		-0-		$-0-		$-0-
Total		110				$3,000		Total		40		$900		Total		70				$2,100
Gross Inventory						$3,000		Gross Cost of Sales				$900		Gross Inventory						$2,100
Reserve (Cost of Excess)						$-0-		Change in Reserve				$-0-		Reserve (Cost of Excess)						$-0-
Net Inventory On Hand						$3,000		Net Cost of Sales				$900		Net Inventory On Hand						$2,100

Entries:		DR		CR
Cost of Sales		$900
Inventory				$900
To record cost of items sold
******