Maxar warns pandemic could delay deliveries but work continues

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Updated at 9:05 pm Eastern with information from Maxar CEO’s blog on the firm’s pandemic response.

WASHINGTON and SAN FRANCISCO — Maxar Technologies warned customers that it may not be able to deliver spacecraft on time or on budget due to the coronavirus pandemic. Nevertheless, all Maxar locations are continuing operations because they are considered part of the nation’s critical infrastructure.

In a March 20 filing with the U.S. Securities and Exchange Commission, Maxar said the March 16 order by California’s Santa Clara County directing residents to stay home to prevent the spread of the COVID-19 virus amounts to a “force majeure” event for the company’s Space Infrastructure business there. 

Maxar’s manufacturing facilities in Palo Alto and San Jose are in Santa Clara County. Maxar initially closed both facilities after the March 16 order, but reopened them two days later after determining it was exempt from the county rule. Satellite manufacturing and testing resumed on March 19, said Maxar spokesman Turner Brinton.

“We resumed essential work on our satellite programs in the factory including manufacturing, satellite assembly and test,” Brinton said by email. “We maintained the work-from-home approach for a large proportion of our staff even after we determined that we qualified for the exemption. Employee health and safety are paramount, and we have taken numerous steps to make our work environment safe by limiting the number of people in our manufacturing facility; implementing social distancing and isolation strategies such as spreading the onsite workforce out over more shifts; and enhancing the cleaning of our facilities.”

In a March 23 blog post, Dan Jablonsky, Maxar president and CEO, said the company activated its “standing pandemic crisis response plan” to protect workers, families and communities “while continuing to meet our commitments to customers.” All Maxar locations are open with “limited personnel working onsite for essential operations,” he added.

Maxar is exempt from the shelter-in-place order issued March 19 by California Gov. Gavin Newsom because aerospace manufacturing, communications and defense are federal critical infrastructure sectors, Jablonsky said.

Nonetheless, Maxar said in the March 20 SEC filing it is observing stress in its supply chain because of the pandemic. Maxar sent force majeure notices to customers to “protect its legal rights given the uncertain nature of the current pandemic,” and its impact on cost and schedule, according to the SEC filing.

Maxar is building spacecraft for Intelsat, EchoStar, NASA and other customers. In the SEC filing, Maxar said its satellite manufacturing contracts sometimes include “liquidated damages clauses” that can be triggered if programs miss contractual milestones. 

In addition to manufacturing satellites, Maxar is supporting the operations of 92 communications satellites in orbit, Jablonsky said. “A large proportion of these provide critical communications to national governments, state and local first responders and television and radio networks,” he added. “We also continue work on various satellite programs that will provide important resiliency and capacity for these critical communications and network infrastructures.”

At the same time, Maxar is building the WorldView Legion Earth-imaging constellation, developing spacecraft and robotics for in-orbit satellite refueling, building a satellite to travel to an all-metal asteroid, and developing the power and propulsion element for NASA’s lunar Gateway.

“No one can predict exactly how the course of events will unfold in the weeks and months ahead, but I am encouraged by the tremendous cooperation we have already seen between governments and the private sector,” Jablonsky said. “America, allied nations and citizens across the world are uniquely reliant on commercial firms for many essential services, and commercial firms like Maxar have a duty to continue delivering those services while minimizing risk to employees.”

Santa Clara County had 141 confirmed cases of COVID-19 and 1 death as of March 23, according to data compiled by Johns Hopkins University Coronavirus Resource Center.