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ASTRIUM IS THE NEW EUROPEAN SPACE GIANT

A new era of the German aerospace industry has begun. At the ILA in Berlin, the new European aerospace concern Astrium is giving its first public debut. The merger of the space businesses from DaimlerChrysler Aerospace with the French-British Matra Marconi Space creates a competitor which will be taken seriously by the large rivals in the USA. An interview with Dr. Klaus Ensslin, Head of the Earth Observation and Science Business Division of the new European space company Astrium.

FLUG REVUE: The European Commission issued the green light for the formation of the Astrium space company at the end of March. What impact will this new alliance of space companies have on the competitiveness of the European space industry?

Dr. Klaus Enßlin: Now that we have received the go-ahead from Brussels, we can press ahead with creating a space company which will be the number 1 in Europe. With a total of 7400 employees, 3400 of them in Germany, and an annual turnover of Euro 2,2billion, we are number 3 in the global market. With regard to the competitive strength of our space industry, the situation will improve. The space landscape in Europe will no longer resemble a patchwork rug, but for the first time we are founding a company which will be capable of competing on the world market. Especially since it is planned that the Italian Alenia will join Astrium in a second step.

FR: Which chances do you see in the new structure?

Enßlin: As Astrium, we can now seriously compete with large companies, for example in the USA. The prerequesites for this are favourable. We have a highly qualified and motivated workforce which builds on the experiences and culture from Great Britain, France and Germany. Astrium als has the financial power, which will allow us to take on projects with large dimensions and higher economical risks. It was time to react to the mergers in the American space industry.

FR: Which field of activity of the new company do you see as having the biggest growth prospects?

Enßlin: That is a very complex question. In principle there is identifiable growth potential in every field of activity, though on different time scales. Since within the management of Astrium I am responsible for the earth observation business let me give an example out of this area: So far, satellite data have almost exclusively been used for scientific research of environmental problems. The time has come for special Geo information services which are used commercially. This includes thematic charts for agriculture, but also information for traffic infrastructures. Also, insurance companies are customers of information based on satellite data. For example when it concerns floodings, forest fires or natural desasters.

FR: Are there already a commercial approach to market such data?

Enßlin: Yes, our concept Infoterra which we will realize together with the British space agency and the German Research Center DLR. As a first step we plan to offer geo-information services on the basis of existing satellite data and data obtained from aircraft. Later, around 2004, we plan to launch our own radar satellite TerraSAR, which will orbit at an altitude of 600 km, enabling resolutions of up to 1 metre. The utilization of a second frequency band will broaden the spectrum of the satellite.
But we also believe that earth observation is relevant to the development of a European foreign and security policy. The issue of early warning and preventive measures for trouble-spots might also give Germany a way of presenting itself as a partner to be taken seriously, for example in NATO.

FR: What are the prospects in the other business areas?

Enßlin: In the scientific area, Astrium is doubtless the leading supplier of satellite systems in Europe. However, here we are dependent on governmental orders as scientific projects are commissioned on a national basis, which in turn means that we can only grow if governmental budgets increase. But in the medium term these are not geared towards growth but at most towards maintaining the status quo.

In telecommunications, the world market is the all-important factor. Here the main developments will be in the area of broadband systems, i.e. the predominant themes will be "Internet in the sky", mobile phones and new applications of the information era. With the required high data rates, satellite have some distinct advantages as compared to terrestrial applications.

One major growth area for the future is navigation. Europe has decided to carry out a feasibility study for a satellite navigation system of its own, Galileo. The EU and ESA have set themselves a target date of December by which to establish whether a decision can be made to build such a satellite system. If the answer is yes, we will get a significant amount of the development work.

FR: In addition to its role as supplier of satellite systems, will Astrium also enter the commercially extremely promising operator business ?

Enßlin: That is certainly an important part of our strategy. The areas of operations and service are looking at a much bigger growth than our traditional supplier business would allow. Basically we are already active in this market today, albeit only to a modest extent. "Leo One" is one such example. This is a small system for the collection of data, for example, for messaging and remote controlling systems. In this case, as well as manufacturing the satellite fleet, we are also involved in operating it.

The same will happen in the area of navigation, where we would like an equity participation. Infoterra/TerraSAR is another project on which we don't just manufacture satellites but are also involved on the operations and service side. This is likely to be a pattern we follow more and more. Strategically, we are definitely aiming to be involved on the operational side.

FR: Is the German space industry getting the support it needs from the government to tackle these tasks?

Enßlin: The federal government's policy regarding space programmes requires that the space industry should increasingly act on its own initiative as it moves forward. The government sees its role in the future less as the customer than as a financier whose role is to encourage private industry. The danger here is that German space activities will be largely dependent on the directions that industry decides to go in - with the result that other European countries in which state initiatives are more far-reaching will take over the lead.

FR: So the German government's strategy on space doesn't meet industry's requirements?

Enßlin: If the strategy one is developing is constrained within existing budgetary limits, then there is a limit to how far one can advance. We would have liked to be able to collectively develop a German space strategy which for once was not limited. By this I don't mean that industry should be able to push forward unrealistic ideas. Of course the federal ministry for education and research (BMFB) has its hands tied. We appreciate that. But space and the German government's strategy on space technology cannot be a technological programme of the BMBF.

FR: So what form should a joint strategy of industry and government take?

Enßlin: We would be happy if an overall strategy could be developed that embraced all the Government's user resources, i.e. the transport ministry, the environmental ministry, the development ministry, the research ministry and also the defence ministry. The constraints imposed on us today by the BMBF should not be the critical factor.

FR: Would you say that the German government is lacking in far-sightedness?

Enßlin: No, I don't think that is a fair assumption. It is less a case of a lack of far-sightedness than simply a situation where any minister who supports space technology today has to produce the money up-front right away tomorrow. At a time when the coffers are empty it is hardly surprising that no one is offering to stick his neck out. It is not at all easy in Germany to develop a cost-intensive space strategy, when everyone will then know that it may not be possible for projects to be implemented in the ideal way because of the tight financial situation. Nevertheless it would be a good thing in my opinion if medium-term planning did not end with the year 2003 but that a longer term view was taken.

FR: Is anything positive being done to improve the situation?

Enßlin: Of course there are a few encouraging signs. For example in the transport ministry in the area of satellite navigation systems. Here we are very confident that such a system could also be very beneficial to Germany as a home to industry, promoting growth and jobs in a big way, for example in the service sector. We are also making progress in relation to the environmental ministry. Here, after two workshops we can now develop our arguments so that the application potential to be gained from satellite earth observation falls on sympathetic ears and results in initiatives.

Nevertheless - and here it is a matter of objectives and strategy - it would have been much better if these workshops and other discussions had formed part of a wider framework aimed at covering and developing an overall space strategy which would take real account of a government policy paper.

FR: Is there also a lack of public acceptance?

Enßlin: It is certainly the case that in the past we have put too little effort into explaining our work in a manner which emphasises the advantages of using satellites. We must make clear that it was with satellites that a number of applications which people take for granted in their daily lives today and which are essential to life in the future only became possible because of satellites. But this is very difficult to communicate to politicians, who generally will only take up the cause for space technology if there is a tangible political advantage to be gained from doing so. For example, put simply, navigation systems enhance air safety or are a means of controlling traffic flows so that there is less congestion on motorways. Becaus of this, we must place more emphasis on the political value of space so that the government is happy to accept our suggestions for space programmes.

Wenn man strategische Arbeit leisten möchte, dann muss man sich in einer relativ offenen und freien Diskussion mit Märkten sowie mit Nutzer- und Anwendungspotenzialen auseinandersetzen. Dabei sollte es eigentlich nicht so sein, dass man seine eigenen Möglichkeiten von Anfang an in einem Budgetrahmen einengt. Dieser ist jetzt beinahe zufällig aber historisch bedingt im BMBF angesiedelt und ist und damit die ganzen anderen Aspekte der anderen möglicherweise gar nicht aufnimmt, weil der Korridor von Anfang an zu eng gelegt wurde.

FR: Back to the foundation of Astrium. What synergy effects or overlaps result from the merger of the individual companies?

Enßlin: One of our first tasks is to identify the potential advantages. There will be many things which can not only be done better but also more efficient. We have set up teams, some of which are already working on solutions or are still in the process of analyzing. Everything is heading to generate more room for growth. We will, for example, enjoy benefits in cases where in the past we have submitted three separate tenders in a competition, each of which required a significant outlay to prepare. In future our efforts will be concentrated on a single bid from Astrium.

Another aspect is that in future, when it comes to distributing research and development resources, it will no longer be necessary to shake the watering can three times, but we shall allocate funds to particular competence centres which apply their capabilities in a targeted fashion.

Also, the development of markets generally is extremely important. Each of the companies which are now a part of Astrium has a particular customer base both at home and abroad. These customer bases will now be grouped together and of course expanded further.

FR: What responsibilities will the competence centres be given?

Enßlin: That is a question which I can't answer today as we are still in the early stages of thinking about the precise organisational structure we end up with. We have just completed a stock-taking, from which we have established that we have outstanding competences at all our sites in England, France and Germany. But we have also discovered that there is a certain degree of commonality and there are some locations where similar capabilities overlap or are duplicated. It would be premature to speculate today about which types of activity we plan to perform at which of these sites.

FR: What role will the national interests of the partners play here?

Enßlin: For the good of the company as a whole, national pride should not enter into the establishment of the centres of competence, which must stand up to objective scrutiny. The criteria we apply must be based on objective arguments.

FR: So the German space industry won't be wound down leaving the French in charge?

Enßlin: Certainly not. Astrium can only work if it is a balanced joint venture with equal partners. This principle has been incorporated in every contract signed up to now. It must be possible to create a fair partnership of equals in Europe, which rules out any one partner dominating anyone else. This works both ways. Take a look at our organisation. At Astrium no one party has any more power than another.

On the other hand, we aren't a United States of Europe where national interests are irrelevant. We have to continue to respect each other because at the end of the day our customers are institutional, national customers. Again, there is no uniform European company law which would allow us to set up a single limited company. We are therefore bound to establish legal entities in each of the individual states. So there will be an Astrium Germany, an Astrium France and an Astrium England.

This will not stop us to operate on the market as one company. Probably not everything will work out ideally in the beginning. With Astrium we are stepping on new grounds of Europe's industry. For us this means both, motivation and challenge.

From FLUG REVUE 6/2000