French Official Invokes U.S. Market ‘Dumping’ To Make Case for Ariane 6
PARIS — France’s space minister, seeking to marshal support for a next-generation Ariane rocket that will better compete in the global market, on Oct. 20 said Ariane’s U.S. competitors, enabled by a richly profitable government business, are all but “dumping” their rockets on the commercial market.
Returning to a theme she has regularly used in the past two years, Genevieve Fioraso said the France-backed Ariane 6 rocket being considered by European nations will be Europe’s way of countering the inherent U.S. advantage of a large domestic government market.
“The European launcher faces a very rough international competition, and it’s all the rougher because in the United States, for example, institutional backing and non-European rules allow launchers to be sold to government customers at a price that is twice as high as the vehicles sold at export,” Fioraso said at the 16th Interparliamentary Space Conference.
“This competition, which just about constitutes dumping, is why France, with the coordination of the European Space Agency, has proposed a common Ariane 6 designed by agencies, industrial contractors and satellite operator customers,” she said.
Allegations of dumping and other contentious practices are a regular feature of U.S.-European commercial negotiations.
In her speech to the parliamentarians, Fioraso did not list any specific examples, but in the past she has pointed to Space Exploration Technologies Corp. of Hawthorne, California, as billing NASA much more than it bills commercial telecommunications satellite customers for the same Falcon 9 rocket.
officials have countered that a Falcon 9 sold to NASA costs SpaceX about 10 percent more than it would if sold to a commercial customer because of the paperwork and other expenses the company incurs in meeting NASA requirements. The same launcher sold to the U.S. Air Force, SpaceX has said, would cost 30 percent more than for a commercial customer.
SpaceX is a privately held company that does not disclose its profitability, making it difficult to determine its Falcon 9 costs.
Measures are also complicated by the fact that SpaceX’s contract with NASA to send supplies and experiments to and from the international space station is a services contract that includes the launch of the Dragon supply capsule, which is returned to Earth after each mission to permit recovery of experiments.
The other company that sells space station resupply services to NASA, Orbital Sciences Corp. of Dulles, Virginia — whose European-built Cygnus capsule does not return to Earth but is burned up on atmospheric re-entry — has reported an operating-profit margin of about 6 percent on its contract.
Despite the difficulties of the analysis, Fioraso has used “dumping” on more than one occasion, and in May suggestedshould insist that NASA cease the practice as a condition for Europe’s continued support for the space station beyond 2020. That proposal is not part of ESA’s talks with NASA on the station’s future, an ESA official said.
Fioraso and her counterparts in the 19 other ESA nations are scheduled to meet Dec. 2 in Luxembourg to determine whether to invest some 4 billion euros ($5.2 billion) in Ariane 6. Germany for the moment is not convinced that Ariane 6 is ready for full development.
One Ariane 6-related issue that Fioraso has not addressed is its likely effect on the number of French engineers working on launch vehicles once the transition from today’s Ariane 5 to Ariane 6 is complete.
Industry officials have said that to meet its cost targets, Ariane 6 will employ 50 percent fewer people than Ariane 5. Many of these job losses would occur in France, which as Ariane’s biggest supporter has the biggest launch vehicle industrial base.
In her speech, Fioraso said Europe’s space sector, all told, provides 38,300 direct jobs, of which 16,500 are in France.
The Ariane 6 that has been proposed by contractors Airbus Defence and Space and Safran, she said, respects strategic, industrial and commercial priorities, “all the while preserving both the government and private employment base.”