Satellite builders unsure what Trump will mean for their business
WASHINGTON — Satellite manufacturers aren’t yet sure how the policies of the Trump administration will impact their businesses.
U.S. President Donald Trump campaigned on reenergizing the U.S. industrial base, which already has more satellite manufacturers than any other country in the world. Boosting defense spending, as Trump has promised, would also stand to benefit U.S. satellite manufacturers, many of which are part of larger companies that do the bulk of their business with the Pentagon. But Trump has also advocated protectionist policies that worry companies competing in a global market.
“I think we need to be very careful about how we have the discussion with the administration and with congress,” Frank Culbertson, president of Orbital ATK’s space systems group, said March 8 at the Satellite 2017 conference here. “Simplifying by saying, ‘buy only American’ … this doesn’t work for two integrators who relied on each other, as it is a global business.”
Culbertson highlighted Orbital ATK’s partnership with France-based Thales Alenia Space on the Iridium Next constellation as an example of the importance of international collaboration.
Orbital ATK created a Foreign Trade Zone to ease the process of bringing European components over to the U.S. where the spacecraft for McLean, Virginia-based satellite operator Iridium are being integrated. Together, Thales and Orbital ATK are building one satellite a week for Iridium Next, which will consist of 81 satellites total, including in-orbit assets and ground spares.
Airbus Defence and Space, which like Thales Alenia Space is based in France but has divisions spread across Europe, pointed to the International Space Station and Orion, NASA’s human spaceflight program, as good examples of international cooperation. Europe helped build the ISS, conducted supply missions using Automated Transfer Vehicles, and continues to be involved in maintaining the orbiting research lab. Airbus Defence and Space is also supplying the European Service Module (ESM) to Lockheed Martin and NASA for Orion. Nicolas Chamussy, executive vice president of space systems at Airbus Defense and Space, also described Airbus as being “fortunate enough to have an assembly line in the U.S.” for producing satellites for OneWeb. The bulk of the 900 satellites OneWeb ordered from the Airbus-OneWeb joint venture OneWeb Satellites are to be built at a factory being built in Florida.
The Trump administration might be more of a double-edged sword for Boeing than for any other U.S. company. Mark Spiwak, president of Boeing Satellite Systems International, agreed that the global nature of the satellite industry is important to recognize, but views the administration’s anti-regulation stance as potentially very favorable.
“[W]e have to be very careful in our global market,” Spiwak said, “but being pro-business and being able to help the speed of business and the affordability of business, there are some encouraging signs there. We need to play that out and stay very connected with Congress and the administration. Having discussions that are pro-business and eliminating, I’ll say, extra things that don’t add value is all in a very positive direction.”
Boeing’s hopes for a smaller regulatory burden are counterbalanced by the company’s concern that the Trump administration might pull the plug on Export-Import Bank of the United States. While all major U.S. satellite manufacturers have relied on the export-credit agency, critics sometimes refer to the institution as the “Bank of Boeing” because of Boeing’s frequent use of the agency in supporting exports, more often for aircraft than satellites.
Boeing closed two satellite orders in the past six months without Ex-Im — Amos-17 for Israel-based Spacecom, and the condosat Kacific-1/JSAT-18 for Singapore-based startup Kacific and established Japanese satellite operator Sky Perfect JSAT — but Spiwak cautioned that those successes don’t mean Ex-Im is unnecessary.
“It’s still critically needed,” he said, speaking of Ex-Im. “We’ve lost several competitions and haven’t been a part of competitions because of the inability of customers to get Ex-Im. Customers that we have signed up recently have said we’ve found a way, but we still need Ex-Im.”
Boeing customer ABS of Bermuda placed a satellite order with Boeing in June 2015, but was unable to close the deal when Congress let Ex-Im’s charter lapse. ABS has yet to find a way to move forward with its next satellite, known as ABS-8.
Thales Alenia Space Senior Vice President Martin Van Schaik confirmed the fears of U.S. satellite manufacturers that Ex-Im’s inability to lend over $10 million is sending would-be American business overseas.
“You do see that the U.S. politics have a big influence on our export line,” he said. “So if the relations between the U.S. and foreign partners deteriorate, it automatically improves our chances. It is true, like Ex-Im. I don’t mind that too much.”
But he was quick to add that protectionist policies in the U.S. would ultimately weaken European businesses, too.
“On the other hand, if there are barriers for our companies to work together to optimize our bids, it will help nobody in the end. It would be best for European industry and it will be best for U.S. industry [to work together]. We buy a lot from the U.S.; we work a lot together,” he said.