Eddie Kato, Chief Executive, Thales Alenia Space North America Inc.

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Thales Alenia Space North America Inc. (TASNA), an arm of the Franco-Italian space hardware manufacturer Thales Alenia Space, is still a small operation focused on providing U.S.-based marketing and technical services, primarily on behalf of its parent company.

That services work includes support for Orbital Sciences Corp. of Dulles, Va., which is building a logistics system for the international space station under NASA’s Commercial Orbital Transportation Services (COTS) program. The system utilizes a capsule supplied by Thales Alenia Space.

Orbital also is doing final assembly, integration and testing in Chandler, Ariz., of the Iridium Next constellation of communications satellites under subcontract to Thales Alenia Space. TASNA will support Orbital and other Iridium Next subcontractors with technical monitoring under a six-year contract awarded late last year and expects to more than double in size — from about 10 to 25 employees — over the next year or so as a result.

Eddie Kato says the Iridium Next contract will account for half of TASNA’s revenue in the coming years and is a key step toward rebalancing the company’s business in favor of technical services. He envisions TASNA staffing up to about 50 employees within the next 10 years and eventually becoming an independent Thales Alenia Space subsidiary with more of its own contracts with U.S. government and other North American customers.

Kato also supports Thales Alenia Space’s marketing efforts in Asia and the Pacific Rim, leveraging years of experience in that part of the world. He recuses himself, however, from controversial deals involving satellites deliberately devoid of restricted U.S. components that Thales Alenia Space has been able to export to China for launch on Long March rockets.

Kato spoke recently with Space News Editor Warren Ferster.

 

What sort of support will you be providing under the Iridium Next contract?

Technical monitoring. Out of the $2 billion Iridium contract we have sourced out maybe 35 percent of the volume to U.S. subcontractors, including Orbital Sciences for assembly, integration and test, Lockheed Martin for software, and many other U.S. and Canadian subcontractors for components and other work. So we need to monitor their progress and provide technical guidance.

 

Is monitoring compliance with U.S. export rules a part of that?

It does include that, yes. TASNA is hiring U.S. citizens to be stationed at or regularly visit those subcontractors’ premises. Within this year we anticipate that we will need to hire up to six or seven additional engineers to do this job. In the meantime we are bringing people from France and Italy, up to seven or eight people, to the United States to carry out this job on an expatriate basis. They will become our employees temporarily. We’ve received a Technical Assistance Agreement from the State Department because this involves dealing with Thales Alenia Space in France and Italy. We will have, for example, a U.S. person stationed at each subcontractor location together with one French person. Whatever technical data he or she learns through the job they must clearly identify what can be shared with the French side and the Italian side and what cannot be. So we actually have an export control function and two certified export control officers in TASNA.

 

What are some of the growth opportunities for TASNA?

We have lots of good opportunities not only in the commercial field but also in U.S. government-related businesses. But in many cases it’s probably right for us to ally with U.S. players leveraging our unique products and services. Every budget in every part of the world is now declining and international cooperation is becoming more important. We might not have a chance to directly sell the U.S. Defense Department a satellite by ourselves. I don’t think that’s the market we’re looking at. But there is the hosted payload market, and other kinds of unique projects. Last year we won a U.S. Navy project, Geosat Follow-On (GFO) 2, with our unique altimeter product. We probably are the only manufacturer in the world of altimeters like those being used for the U.S.-European Jason project. So we teamed with a U.S. supplier and succeeded in selling this product to the Navy. This kind of model features a U.S. prime and we would contribute with a unique product. Human spaceflight is another example. COTS is a very good example of how we worked with a U.S. company to sell to NASA, not as a generic subcontractor but in a strategic way, leveraging our unique product. We are proactively pursuing various hosted payload projects in the communications arena.

 

Is GFO-2 going forward?

The budget situation is preventing us from implementing this for now. It could be delayed, it could be funded through another way or in the very worst case the whole project may be gone. We don’t know yet. But it was a very good way to pursue this opportunity.

 

What about satellite platforms?

We are looking at the potential application of our low Earth orbit platform. We’re building the Globalstar, O3b and Iridium Next constellations so we need to think about what happens after we finish those projects. Is there any market in the U.S. government for this kind of platform? That’s what I am interested in looking at right now.

 

How might you sell that platform to U.S. government customers, who generally must buy from American companies?

We may need to partner with U.S. players, depending on the situation or the nature of the opportunity. What we’re doing with Iridium Next is a very good precursor for our strategy.

 

What applications are there for an Iridium Next-type platform?

It’s very precise in control. So nontelecom applications can be possible, like sensors. It’s also a low-cost platform so it’s good as a technology test bed or as a hosting solution for developing sensors. There might be other constellation type applications as well.

 

Are you talking about weather or space environment sensors?

Yes. Even space situational awareness types of applications.

 

Are you assisting efforts to find hosted payloads for Iridium Next?

We own the system design so we need to work like a partner to evaluate candidate hosted payloads and validate the designs and interfaces. So yes, we have some involvement. Also, mainly on the European side, we are trying to introduce opportunities as well because we have a very good access to customers who may be interested in hosted payloads.

 

What other unique capabilities do you offer?

We are developing UHF and Ka-band military satellite communications systems for France and Italy and we have always been the Syracuse system provider to the French Ministry of Defense. We have lots of technical capabilities through those projects. In fact we are pursuing an opportunity in Japan today — Japan is buying its first military satellite communications system and they may need a channelizer, which is the heart of the system. They are buying one military X-band satellite very shortly and then they will buy another one within the next year.

 

Has Japan signed a prime contract for this satellite system?

They have issued a request for proposals to two domestic companies, NEC and Melco, but I don’t think they have the capability to build the channelizer so that may be the market for us. They’re going to select the payload vendor first and then sign the bus vendor.

 

What are your revenue projections for next year?

It’s a little bit fuzzy but I would say around $5 million, including our work for Thales Alenia Space and some other customers.

 

How do you see that revenue growing in the next five years?

I would say 10 to 15 percent growth — that’s what we are looking at.

 

Do you envision opening up an office at NASA’s Wallops Flight Facility in Virginia as your space station-related work winds down at Kennedy Space Center in Florida?

We have one person who is dividing time between Wallops and Orbital’s Dulles campus. There are some security related topics that we need to go through. I think by springtime we’ll have a conclusion as to what’s best but yes, we are looking at that possibility.

 

Thales Alenia Space has a capable remote sensing satellite platform. Do you see opportunities in the U.S. market for that?

The platform side is very limited. We just lost to Orbital in the competition to build the IceSat-2 satellite for NASA. Our platforms are registered in the Rapid Spacecraft catalog administered by NASA’s Goddard Space Flight Center. For this opportunity we didn’t pursue teaming with a U.S. company; we just competed with them. In the future we need to probably evaluate what’s the best process.