Space Industry Executives Decry Governments’ Lack of Long-term Strategy

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PRAGUE, Czech Republic —  U.S. and European space industry officials said the lack of a long-term strategy from their governments is making it difficult for them to invest.

In remarks made Sept. 27-Oct.1 during the 61st International Astronautical Congress here, officials said their companies have demonstrated a willingness to make risky investments when governments set and stick to a clear, consistent goal. In too many areas, that no longer exists, they said.

“We developed the Delta 4 rocket and the Sea Launch vehicle in six or seven years, so we know how to do this,” said James Chilton, vice president for exploration launch systems at Boeing Co. “The problem is not getting into the business, it is staying there. The issue is not technical, it is that the business models don’t exist today. What we don’t want to do is undertake development at private expense and then end up competing with government systems.”

Boeing invested heavily in launch vehicles starting in the late 1990s on the assumption of a future commercial market that has not materialized. The privately financed Sea Launch venture, which competes with government-financed rockets, is now emerging from Chapter 11 bankruptcy. Boeing has made substantial write-offs of its Sea Launch investment.

Chilton said government policy used to feature well-defined missions for which industry was challenged to create technology, but that the current NASA direction seems to be one of pushing technology toward missions that are not yet in view.

Luigi Pasquali, deputy chief executive of Thales Alenia Space, a major contractor for the international space station, said the move to encourage the development of commercial vehicles for the station is healthy, but that too many questions remain on who will take responsibility for risks.

The policy uncertainty is occurring at a time of a massive downsizing of the U.S. aerospace industrial base. Up to 20,000 jobs are expected to disappear. Taken together, they create an environment in which top engineering students who once would have entered the aerospace sector are entering other industries. “It is especially difficult to attract talent,” Chilton said. “These students have alternatives, and they are selecting the alternatives.”

Gilles Maquet, vice president for institutional affairs at Astrium, Europe’s biggest space hardware and services company, said Europe too is suffering from a lack of long-term strategy. Promised increases in military space budgets, he said, have not materialized, and these budgets are in fact decreasing. This is especially bad news in Europe, whose industry already is forced to depend on the cyclical commercial sector for 40 to 50 percent of its revenue. Maquet said European manufacturers have lost 1 billion euros ($1.3 billion) in orders from traditional commercial customers in the last four months alone, an apparent reference to satellite orders from Inmarsat of London and Hispasat of Spain that have gone to U.S. builders Boeing Space and Intelligence Systems and Space Systems/Loral, respectively.

On the civil side, the French government has decided to abruptly end its 30-year practice of financing the Spot series of Earth observation satellites, demanding that industry now pay 100 percent of the cost of the next Spot generation. Astrium has agreed to spend some 300 million euros to build and launch the next two Spot satellites.

“You cannot go from nearly zero to 100 percent just like that,” Maquet said. “We need a long-term approach. This is the key challenge for us.”

Maquet said that on the Earth observation side, the United States has adopted a long-term approach through 10-year contracts with cash support for industry on the part of the U.S. National Geospatial-Intelligence Agency.

The executive commission of the 27-nation European Union is weighing a new policy in which much of the data from government-financed Earth observation satellites would be made freely available to anyone who wants it. The European Space Agency already has moved to adopt a “free and open” access policy.

Sir Martin Sweeting, executive chairman of small-satellite specialist Surrey Satellite Technology Ltd. of Britain, said he remains uncertain whether this new policy will encourage or impede development of a commercial remote sensing industry.

“If they decide to dump near-real-time data on the market, then it will obviously have a detrimental effect on companies trying to sell data from satellites they have financed in the private sector,” Sir Martin said in an interview. “If the free-and-open-access policy is limited to archived data, then we can live with it. But if governments decide to make all imagery free, they should know they will be obliged to continue financing the construction and launch of Earth observation satellites pretty much forever. I am not sure that’s the most effective use of taxpayers’ money.”