{"id":79062,"date":"2013-12-17T19:07:21","date_gmt":"2013-12-17T11:07:21","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/lockheed-martin-to-re-enter-the-commercial-satellite-business\/"},"modified":"2013-12-17T19:07:21","modified_gmt":"2013-12-17T11:07:21","slug":"lockheed-martin-to-re-enter-the-commercial-satellite-business","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/lockheed-martin-to-re-enter-the-commercial-satellite-business\/","title":{"rendered":"Lockheed Martin to Re-Enter the Commercial Satellite Business"},"content":{"rendered":"

Lockheed Martin is an industry giant, and ready to make a splash again in both the commercial satellite manufacturing space, as well as the commercial launch arena. We find out their plans.<\/em><\/strong><\/p>\n<\/p>\n

\"Artist
Artist rendering of the A2100 satellite bus.
Photo: Lockheed Martin<\/figcaption><\/figure>\n<\/p>\n

Lockheed Martin has a rich heritage in the space industry but in recent years it has concentrated more on its domestic government business rather than being a commercial force around the world. However, with U.S. government budgets shrinking, and opportunities arising in emerging markets, the company is ready for a \u201ccoming out\u201d party in the commercial market.<\/p>\n

Satellite Bus<\/strong><\/p>\n

Linda Reiners, president, commercial ventures, Lockheed Martin Space Systems, talks about the company needing to \u201cre-invigorate\u201d its commercial satellite communications business. So, what are Lockheed\u2019s ambitions in the manufacturing space in 12 months time? \u201cTwo things, you will see that we have been bidding. I think a year from now we should have success with our endeavors. We will also be introducing new products. We will have a new set of products a year from now, and then another set of products a year after that. This is a business that is ripe for innovation,\u201d Reiners says.<\/p>\n

It is always exciting when we see one of the industry giants re-engage with the industry. Reiners talks about this being a \u201ctransformation\u201d process for the company. \u201cWe have got the benefit of this tremendous development effort on the A2100 that we have just completed. We are bringing this platform back into the commercial market in a more robust manner. It will be a different Lockheed Martin Space Systems company going forward. So, a little bit of it is timing. We need to get our price point down. You will know when we reach that point because we will be winning,\u201d she says.<\/p>\n

Reiners is charged with leading Lockheed Martin back into the promised land of the commercial satellite communications market. As she talks of a \u201cre-ingivigoration\u201d process, you can\u2019t help but wonder whether things had got a lot of stale for the company in terms of its approach to the commercial market. Reiners denies this and adds, \u201cWe have 45 spacecraft on orbit with the A2100 bus. It has turned over 400 years of orbit life. We have 23 in production right now for the military. We have learned a lot about the spacecraft itself, but more importantly things like advanced manufacturing techniques that help drive down costs, and improve the process flow of the spacecraft itself for mistake-proofing. So, making fewer parts, using more common subsystems and components. We have an opportunity to bring so much of that type of innovation as well that I think it is going to give us an advantage from a price, schedule and reliability point of view.\u201d<\/p>\n

Lockheed has been through a fairly significant development cycle with the U.S. government with space missions such as navigation, weather, human spaceflight, etc. Reiners admits its attention has been \u201cliterally consumed\u201d by the volume of work that they have had, but now the company is in a position where it is able to bring its \u201clatest developments\u201d in spacecraft manufacturing to the commercial market. She calls this a \u201ccoming out party\u201d for Lockheed Martin.<\/p>\n

The satellite market has fundamentally changed in the last 10 years, with big military satellite communications programs being cut back as the United States, like many other countries, is still going through a time of economic austerity. At the same time, the satellite market is proving vibrant in regions such as Latin America and Asia. This is a fact that Reiners readily admits. She says the company is \u201cexcited\u201d about the opportunities in the rest of the world.<\/p>\n

\u201cThere are emerging companies and national interests that are often every bit as sophisticated as others getting started. Each of those has a very different complexity associated with them. Space is a global venture; there are regions and segments, which means there are opportunities everywhere,\u201d she says.<\/p>\n

The satellite manufacturing space is a competitive one with the likes of Boeing, Thales Alenia Space, Astrium and Space Systems Loral contending for not huge amounts of new commercial satellite orders right now. Boeing caused a stir last year when it announced deals with Asia Broadcast Satellite and Satmex for satellites based on electric propulsion. As for Lockheed Martin, Reiners adds, \u201cWe are using electric propulsion on our military systems. It is the only electric propulsion system that has achieved transfer orbit using electric propulsion. We are very excited about bringing that to the commercial market. The technology also happens to be higher thrust than our competitors so you will suffer less time in the transfer orbit which I think is a real benefit. You will see increased flexibility and benefits around payloads, the ability of the spacecraft to host dual payloads. A lot of innovation is around our manufacturing process.\u201d<\/p>\n

Price will also be an important differentiator for the company. Like the launch division of Lockheed Martin, bringing down price could be key. \u201cIt is a buyer\u2019s market in terms of price. That is where our energy has been focused on. I don\u2019t know if my peers have really focused on that, but I think they will be facing that very shortly. They value flexibility as well. A lot of focus has been on that, and a lot of that comes in different flavors. So, that means you have to launch on a variety of vehicles and offer configurations that cover a variety of power levels, so they don\u2019t have to customize for vehicle,\u201d Reiners says. \u201cAt Lockheed Martin, we are targeting a very significant investment to drive those costs down and improve the flexibility of the spacecraft and ensure the platform itself meets the range of needs of customers, not just now but where they are going. I am not concerned about our ability to compete.\u201d<\/p>\n

Launch Services<\/strong><\/p>\n<\/p>\n

Lockheed Martin also wants to become more of a key player in the commercial launch services business. This is a market with incredibly interesting dynamics right now. Not only there are established players such as Arianespace and ILS, but there is also Sea Launch, which is trying to re-invent itself, and SpaceX, a company that has the potential to shake-up the launch industry.<\/p>\n

The man in charge of leading Lockheed Martin\u2019s re-emergence in the commercial launch market is Robert Cleave, president, Lockheed Martin Commercial Launch Services. One of the biggest perceptions he will have to overcome is a price perception issue. The company is seen as expensive, and while some would argue the cost of a successful launch is priceless, it is clear Lockheed Martin will have to adapt its approach.<\/p>\n

\u201cPrice point is a function of rate. If you don\u2019t have the rate, you can\u2019t have the price point. The question is who is your anchor tenant? Every launch provider, including Atlas has an anchor tenant. There is no rocket out there which will survive without an anchor tenant,\u201d Cleave says. \u201cIf you look at Atlas, the U.S. government recently committed to a block buy of Atlas and Delta launches. The shareholders upped the ante and we ended up with a very low cost basis. You have to have the rocket science, the quality control and then the price point.\u201d<\/p>\n

The big question is how much can Lockheed Martin bring down the cost of its launch services. Ultimately, this could determine its success in the market. Cleave says the company\u2019s supplier, ULA, has done a \u201cterrific job\u201d not only in terms of mission success but consolidating the operations of two product lines \u2013 the Delta and the Atlas. \u201cThey have also been able to take advantage of the purchasing power that was given to them by the shareholders and the U.S. government to give us a substantial reduction in our price points,\u201d he adds. \u201cSo, yes, it is over 30 percent less in terms of price point compared to two or three years ago. We will never be as inexpensive as a Proton. We could not have gone into the market at the price point we had two years ago. I think we are able to go in and compete.\u201d<\/p>\n

Like Reiners, Cleave is focused on doing new deals in the commercial sector. In September, the company announced has it had been selected by the Secretaria de Comunicaciones y Transportes, a government agency of Mexico, to provide commercial launch services using the Atlas 5 launch vehicle for Mexico\u2019s Morelos 3 communications satellite (also known as Mexsat 2). The launch is scheduled to occur as early as 2015 from Cape Canaveral. Morelos 3 will be the third of three communications satellites that comprise the Mexsat communications satellite system. Mexsat is a constellation of satellites owned by the Secretaria de Comunicaciones y Transportes and operated by Telecomunicaciones de Mexico that delivers advanced telecommunications throughout Mexico.<\/p>\n

Doing a deal with one of the \u201cBig Four\u201d among FSS operators (Intelsat, SES, Eutelsat and Telesat) could be on the horizon, Cleave says. \u201cWhen we look at markets around the globe, the likes of SES, Intelsat, Eutelsat, and Telesat control a substantial fraction of the market. Those companies have always wanted to use Atlas; their capital expenditure cycles is pretty well fixed in the near term, particularly when one looks at Intelsat. Will they be changing their plans in the next few months? It is hard to say,\u201d he says. \u201cIt may take time to make breakthroughs with the \u2018Big Four.\u2019 In 2013, we hope to get another deal. In the next 12 months, we are targeting one or two deals a year.\u201d<\/p>\n

If Lockheed Martin were able to close a deal with these companies, it would be a real statement of intent. \u201cSome operators have said \u2018we are fully booked for a while,\u2019 but at least one has said they have interest. So, I would say within the next six months,\u201d Cleave says. \u201cAtlas is a shared asset between the U.S. government and us, so, we have to maintain that. The Atlas vehicle will become increasingly available in 2016 as ULA peaks in launches with the U.S. government over the next two years or so.\u201d<\/p>\n

Lockheed Martin sees one competitor as standing out. \u201cWe see Arianespace as our major competitor, and we have several key discriminators,\u201d Cleave says. \u201cFor example, Ariane 6 has no rideshare. In terms of reliability, we believe we have an edge.\u201d Considering that Arianespace is perhaps their only competitor, one or two deals per year could be perceived as conservative. \u201cMy father taught me something very valuable when I first got in the business, which is that your career is a marathon and not a sprint,\u201d says Cleave. \u201cThe minute one starts cutting corners is when one gets into trouble. So, yes I do think there is an upside business case. But, there is also a downside business case if we are not careful.\u201d VS<\/p>\n

\n

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Lockheed Martin is an industry giant, and ready to make a splash again in both the commercial satellite manufacturing space, as well as the commercial launch arena. We find out their plans. Artist rendering of the A2100 satellite bus.Photo: Lockheed Martin Lockheed Martin has a rich heritage in the space industry but in recent years […]<\/p>\n","protected":false},"author":1,"featured_media":79063,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-79062","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/79062"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=79062"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/79062\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/79063"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=79062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=79062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=79062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}