Pentagon keeping an eye on space industry bankruptcies but no actions planned yet

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Will Roper: DoD would intervene it were at risk of losing access to key supplies.

WASHINGTON — The Pentagon does not plan to rescue companies in financial distress except in extreme circumstances, said Will Roper, assistant secretary of the Air Force for acquisition, technology and logistics.

DoD would intervene it were at risk of losing access to key supplies or if a U.S. company that develops technology of great value to the military were being targeted by foreign buyers, said Roper. Otherwise, “we simply cannot do stimulus for every company that is under duress right now. Every company is being impacted by COVID-19,” he told reporters May 14.

Roper was asked for reaction to recent developments such as satellite operator Intelsat filing for bankruptcy less than two months after space broadband provider OneWeb went out of business.

“As we see the Chapter 11’s being filed we are tracking them,” he said. “But our concern is the health of the industrial base and not picking winners and losers.”

Roper chairs the Space Acquisition Council — which includes the senior leadership of the Department of Defense, the U.S. Air Force and Space Force, and the intelligence community. The council in the coming weeks will be reviewing the results of a survey that could help identify what companies or sub-sectors of the industry need emergency help.

“Hopefully that will provide us insight” of what is happening across a broad section of the industry, said Roper.

The survey is being conducted by the Space Enterprise Consortium, an organization run by the U.S Space Force’s Space and Missile Systems Center. The consortium works with about 400 companies in the space industry, many of which are small businesses and startups. The SpEC is viewed as a nexus between DoD and commercial industry.

“Our job is to ensure we have an industrial base today so we can go to war today and into the future, and modernization is not at risk,” said Roper. “I look at sub-sections of the industrial base like space micro electronics, like propulsion and I want to know ‘do we have a healthy supplier base?’”

Roper declined to comment on reports that Chinese companies are interested in buying OneWeb assets and possibly other space and aerospace businesses in the United States that are in financial straits.

“We are tracking what countries are doing,” he said. “It’s unfortunate to say that we’re seeing behavior that we wish it were not happening.”

Possible acquisitions by China is a “topic that is hard to publicly talk about,” he said. “We’re mindful of the adversarial tactics.”

Every crisis creates an opportunity for “predatory tactics targeting intellectual property that countries would not have access to otherwise.”

Roper said DoD might consider rescuing a company if the United States determined that it did not want that IP to go to China. “We’re ready to take aggressive action if we’re put in that situation. We’re hoping that won’t be the case. But hope is not a strategy.”