Satellite manufacturer joins others in rationalisation moves in bid to reduce costs

Teledesic has suspended work on the first two of a planned 30 Alenia Spazio-built medium Earth orbiting global broadband communications spacecraft in response to the downturn in the satellite market. Teledesic joins a number of satellite manufacturers and launcher companies that are rationalising.

Teledesic has already cut its workforce from 115 to 75 and says it will "significantly reduce its staff" as a result of the "speculative" nature of the point-to-point communications market which shows "no foreseeable financial market or commercial prospects".

Teledesic has spent millions of dollars in the last 10 years hoping to capitalise on the predicted demand for global broadband satellite services. That market, however, has failed to meet expectations. This, along with the collapse of the global mobile communications satellite sector, has contributed to the present severe downturn in the civil space market for satellites and launch services.

France's Alcatel Space has also announced a rationalisation plan to cope with the downturn in the space market, which will see it restructuring its activities and laying off 400 of the 5,200 workforce at its four facilities "to cope with the steady decline in the space sector". One of the facilities, at Valenco, which employs 250 staff, will be subject to a "conversion", which may involve joint work with other companies.

In addition, overcapacity in the space industry and losses in satellite manufacturing and launchers has led Italy's Finmeccanica to reopen discussions with Alcatel Space and Astrium about possible co-operation with its subsidiary Alenia Spazio.

European launcher company Arianespace is restructuring to reduce costs, but has rejected reports that this would affect a third of the company's 380 staff in the first quarter of 2003. The French space agency CNES, meanwhile, will reduce its 2003 space budget by 2.7%, delaying ambitious plans for Mars sample return technology demonstration missions with NASA.

Romano Prodi, the European Commission president, has warned that work on Europe's Galileo navigation satellite system is in danger of collapse due to rivalry between Germany and Italy over which country will lead the effort.

Source: Flight International