DGA Chief: Airbus-Safran Joint Venture Must Exclude Missile Work

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PARIS — The head of the French arms procurement agency, DGA, on July 1 warned French industry that their ballistic missile and nuclear deterrent teams, often in the same offices as the launch vehicle engineers, will not be permitted to join the proposed new consolidation of French and European rocket builders.

In an address to the French Senate, Laurent Collet-Billon said DGA nonetheless looks favorably on the decision by rocket and missile designer Airbus and propulsion-system builder Safran to put their rocket-building assets into a single joint-venture enterprise.

The new company would be enlarged to include other Ariane rocket contractors and the Arianespace commercial sales consortium.

Collet-Billon, who since at least 2009 has been calling for a radical new design for the next-generation Ariane rocket that would be cheaper to build and operate than the current Ariane 5 rocket while maintaining Europe’s independent space access, said he viewed the Airbus-Safran initiative as “a very positive initiative” that moves in the direction of lower costs.

But for the time being, he said, design and production offices involved in France’s ballistic missile deterrent should not be included in the joint venture. “Defense activities will not be added to the new joint venture,” Collet-Billon said.

It was unclear how the current industrial setup, in which missile and rocket work at French industry is often done at the same place by some of the same people, might be redrawn to separate civil from military.

Collet-Billon made his remarks to the French Senate’s Foreign Affairs, Defense and Armed Forces Committee during a hearing on French space policy.

Collet-Billon used the occasion to tell industry that France will not be able to match the military space ambitions set out in the latest military program law multiyear guidelines because of pressure to cut government spending.

He reiterated past DGA proposals that France’s two satellite prime contractors, Airbus Defence and Space and Thales Alenia Space, cannot both survive given the budget pressures. “We can’t maintain two completely independent companies given the state of our public finances,” he said. “That would be illusory.”

Thales Alenia Space Chief Executive Jean-Loic Galle, appearing at the same hearing, responded that there are many ways for two competitors to share research and development work without merging, thereby offering customers the benefits of a competitive market.

For that to work, Galle said, France and European governments need to increase their spending on space-based research to arm European industry.

Collet-Billon agreed, and said European satellite contractors’ need for export earnings given the small domestic European government market cannot be satisfied as long as European companies are using U.S.-built satellite components subject to International Traffic in Arms Regulations (ITAR). He said European industry in the past has seen the U.S. government retroactively add components to the ITAR list when they are on satellites about to be exported by a French contractor.

Thales Alenia Space and Airbus have both had U.S. export issues in recent months, for telecommunications and Earth observation satellites. In one case — a high-resolution optical Earth observation satellite system for Qatar — it appeared the U.S. government was stalling export approval for a contract on which U.S. companies bid as well. It is likely this was the contract to which Collet-Billon was referring when he said French exports cannot reach their potential unless the ITAR problem is solved definitively.

ITAR has been made more technology-transfer-friendly for satellites in recent months, but the rules still permit the U.S. government to deny export or launch permission for satellite components as it sees fit.

Galle said the executive commission of the 28-nation European Union, which has made space policy one of its showcase responsibilities, has been unable to structure a research and development effort that aids European space exporters.

Galle said the most recent seven-year research program concluded by the European Commission, which ended in 2013, “was a real failure in terms of return on investment, and I am worried that the new [seven-year] program, called Horizon 2020, will be no better. This program is funded at around 1.4 billion euros ($1.9 billion). Believe me, there are lots of things Francois [Auque, director of Airbus Space Systems, who also attended the hearing] and I could do, or that CNES [the French space agency] could do with that level of financing.”

Galle proposed that France and the European Commission consider opening access to the French Helios optical and infrared reconnaissance satellites, and to the Galileo navigation system now being built, to non-European nations to whet their appetites for their own hardware that could be built by European contractors.

Galle said it is not just the United States that had tightened its technology export policy on behalf of preserving U.S. strategic advantage. Russia and China are both heading in that direction, he said. “Europe cannot take a different path,” he said. “Our dependence on U.S. components is too deep to assure a fair competition [with U.S. contractors] in the long term.”

Collet-Billon, without naming any particular technology, said French industry has only itself to blame for having become dependent on U.S. satellite parts over the years. That same industry, he said, is now pleading with government authorities for large new investments to end that dependence.

 

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