INDUSTRIAL PATTERNS OF CHANGE

Clearly, the increasingly competitive satellite communications and space applications businesses have resulted in a push toward creating more cost efficient satellite manufacturers. This is exemplified in the United States by the consolidation within Lockheed Martin of RCA, GE, parts of Loral, Martin Marietta and Lockheed; and the consolidation within Boeing of Rockwell and, in time, McDonnell Douglas. On the European side, Matra Marconi appears likely to consolidate with Daimler-Benz and may possibly acquire the tube division of Thomson. (Should this happen it would create a full service satellite communications manufacturer with nearly 8,000 employees and complete manufacturing, assembly, and testing facilities.)

Other forms of consolidation, however, do not appear to be contemplated in the near term. In Japan, further consolidation does not seem to be contemplated, but there appears to be increased focus on specialization with various companies, such as NEC on ground antenna systems, Toshiba on large structure antennas, and Mitsubishi on integration and testing of spacecraft. In contrast to this trend toward either specialization or large scale consolidation, Hyundai, in Korea, is seeking to become capable of complete design, manufacture, assembly and test of entire satellites.

On the launch vehicle side, the effort to create more cost efficient launch vehicles continues. Arianespace's 37th consecutive successful launch and its capture of over half of the total commercial satellite launches establishes it clearly as the world leader. In Europe and Japan there are clearly defined and integrated single entities (namely Arianespace with its latest hopes riding on Ariane 5 and NASDA with its future based on the H class of rockets). These organizations appear well positioned for the next century although there is a need for increased cost efficiency out of the Japanese launch systems and this might accelerate efforts to combine NASDA and ISAS and their launcher development programs. Russia and the Ukraine to not show moves toward consolidation. In fact, several entities are now offering launch services (and significantly INTELSAT has committed its INTELSAT IX satellite program to a Russian launch).

The United States has a variety of start-up and established commercial launch providers, with the U.S. Alliance perhaps offering another option for "excess capacity" launch of commercial systems. Meanwhile China and India offer a range of launch capacities and these are not likely candidates for international consolidation in light of national defense considerations. Finally, Korea, which is just beginning to explore medium to small class LEO launch systems, completes the picture. This picture is at once multi-national, complex, and still to be clarified. At this point the launch systems appear to be more and more commercial and competitive, but nevertheless not optimized nor consolidated so as to achieve maximum cost efficiencies. In light of national defense considerations and "national standard bearer" issues, further consolidations do not seem likely, at least in the near term future.


Published: December 1998; WTEC Hyper-Librarian