MDA buys Space Systems/Loral but will commercial market still be there?

by | Jun 28, 2012 | Seradata News | 0 comments

The purchase of US spacecraft manufacturer Space Systems/Loral from Loral by the Canadian space firm MacDonald, Dettwiler and Associates (MDA) for $875 million has given MDA a major foothold in commercial spacecraft manufacturing.  For while MDA was only a little smaller than Space Systems/Loral in overall revenues ($761 million (US) compared to $1.1 milllion), it remains a relative minnow compared to Space Systems/Loral in terms of commercial satellite manufacturing.  MDA is stronger in space robotics, making the robot arm and Dextre repair robot for the International Space Station, and Radarsat satellites for the Canadian Space Agency.  

Space Systems/Loral is one of the “big five” in commercial satellite construction and is often rated as one of the top two of the major players.   Originating as part of Ford Aerospace, the spacecraft manufacturer was bought from Ford Motor Company by Loral in 1990. As Loral fell into Chapter 11 bankruptcy protection, mainly as a result of its involvement with the original failed Globalstar business plan, Space Systems/Loral also thus fell into Chapter 11.  However during this time Space Systems/Loral had been extraordinarily effective at winning orders and it emerged from Chapter 11 in 2005 with much fuller order book.  This caused some industry observers to wonder if going into Chapter 11 bankruptcy could be the answer for a company wishing to become competitive!

Whether the operation can maintain its success remains to be seen.  Increasingly countries have their own indigenous satellite manufacturing capabilities.  Meanwhile some launch providers are now offering “all in” turnkey manufacturing and launch contracts which reduces the need to buy commercial spacecraft on the open market.  As it is other space firms are moving into this commercial spacecraft manufacturing field.  All this is making the commercial spacecraft market increasingly competitive and this could limit both revenues and profitability for participants in this market.

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