Belgium Rejects Further Satellite Manufacturing Consolidation

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Belgian parliamentarians say they are opposed to any further consolidation of Europe’s satellite industry because small and midsize companies would be the first to suffer if a satellite monopoly backed by the French government were to be created.

As a nation that has long set space spending as a high priority but is not home to any large prime contractors, Belgium’s industry would be hit especially hard, they said.

“You may hear different views in France and perhaps Germany, but if you solicit opinion in other nations in Europe, including Belgium, you will find that they are all concerned about their subcontractors,” said Sen. Francois Roelants du Vivier, chairman of the Belgian parliamentary space group. “Industrial rationalization is OK up to a point. But a monopoly situation — this we cannot support.”

Europe’s two principal satellite prime contractors, Alcatel Alenia Space and Astrium Satellites, recently discussed a merger of their activities inside Thales Group, a defense electronics specialist that has agreed to purchase a majority stake in Alcatel Alenia Space.

The merger had the backing of the French government but collapsed following the opposition of Thales and Alcatel.

Europe’s largest space-hardware customer, the 17-nation European Space Agency (ESA), was not consulted about the merger idea and ESA Director-General Jean-Jacques Dordain has declined to express an opinion on the subject. Dordain set up an ESA commission to study the consequences of a satellite prime contractor monopoly and expects to report the conclusions of their work by October.

Despite its small size, Belgium spends more on space per capita than any other nation in Europe, and 95 percent of the investment is dedicated to ESA. Belgium has no real space agency of its own. The result is that Belgium is ESA’s fifth-largest contributor, ahead of Spain and behind France, Germany, Italy and Britain.

Sen. Luc Willems, also a member of Belgium’s parliamentary space group, said the space sector cannot be permitted to consolidate beyond a certain point even if such a move is driven by financial logic.

“We are certainly for a competitive space industry,” Willems said here May 27 during a visit of a Belgian parliamentary delegation to Europe’s Guiana Space Center spaceport. “But competitive business reasoning is not the sole measure for this industry. We have to consider the effects on national employment, and the effects on space-industry subcontractors. They would be hard hit by any move toward a monopoly.”

Willems said 40 companies employing more than 1,200 people make up the core of Belgium’s space subcontractor base. A satellite prime contractor in a monopoly position in Europe would tend toward vertical integration, keeping for itself component manufacturing and other tasks now performed by second-tier contractors, he said.

Belgium holds this year’s rotating presidency of the European Interparliamentary Space Conference, a gathering of European parliamentary delegations that seek to influence government policy. This year’s conference is scheduled for June 12-14 in Brussels.

Roelants du Vivier is chairman of this year’s meeting. In addition to industrial consolidation issues, du Vivier said he hopes the conference’s final resolutions will send a warning against what he called “re-nationalization of space policy.”

“To achieve economies of scale, and to avoid duplicating each other’s investments, we need to reaffirm that space investment is best made in a European context,” Roelants du Vivier said.

In the past two years, the governments of France, Germany and Italy have all signaled that they would be putting more emphasis on national programs as opposed to missions conducted inside ESA.

Roelants du Vivier said he hoped to use the Brussels meeting to influence especially German policy because Germany is assuming the rotating presidency of the 25-nation European Union in January.

“For a long time France was Europe’s space leader,” Roelants du Vivier said. “Now Germany, in part because of its government coalition and the fact that it does not face elections soon, unlike France, can have an eminent role in Europe’s space program. In that sense the parliamentary conference aims to send a message” to Germany.

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