F 
R

1
2
- 
9 
8

---

Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 12/98

EUROPEAN AEROSPACE INDUSTRIE RESTRUCTURES

Currently there is no other industry that is trying to shape up radically at European level like the Aerospace Industry. This is happening to withstand the intense competitive pressure from American giants like Boeing or Lockheed Martin.

However, while the merger of Airbus Industrie to a European joint-share company is making little progress, the Space Flight Sector is a lot further forward. According to Manfred Bischoff, boss of Daimler-Benz Aerospace, Dasa intends to merge its entire spaceflight business with Matra-Marconi Space (MMS) "possibly even before 1998 is out".

The new joint venture, for which the partners could as yet not agree on a name, will then have a turnover of about DM 4.5 billion and 8,200 employees, 3,400 in Germany - in Ottobrunn, Bremen and Lampoldshausen -, 2,200 in France and 2,600 in Great Britain. In will then be the third biggest spaceflight company in the world after Lockheed Martin and Boeing.

After a phase of drastic consolidation, the German Aerospace Industry is well placed for its Europeanization. The spaceflight industry's 7,000 employees in 1990 dwindled to 5,200 employees in 1997. Since then the number has stayed more or less the same.

At the same time the spaceflight industry was able to strengthen its position within the Aerospace Industry. In 1986 only 8.6 per cent of aerospace's entire workforce was employed in the spaceflight sector. The share will be by 10.2 per cent at the end of this year.

Turnover has been stabilised too. While spaceflight business decreased in the years between 1991 and 1994 from DM 2.998 billion to DM 1.894 billion, in 1997 turnover climbed up to DM 2.666 billion. For 1998 a slight slump in business to DM 2.5 billion is predicted. This is an impressive 12 per cent of the aerospace industry.

In Germany the spaceflight businesss is very concentrated. Dasa is responsible for 95 per cent of the entire turnover. Other industrial players in the spaceflight sector worth naming are MAN Technology and the two medium sized companies OHB in Bremen and Kayser-Threde in Munich. The German spaceflight industry is active in three distinct areas: with the International Space Station (ISS), with Ariane launchers and with the construction of satellites.

And all three areas are under tremendous commercial pressure, which was made even stronger by the former Minister for Research Jürgen Rütters. The reason is that public funding for spaceflight is stagnating. German spaceflight enterprises and scientists receive about a billion DM through the Europen Space Agency (ESA) each year. The German Aerospace Centre (DLR) looks after the national moneys for spaceflight, (DM 310 million). Neither DLR's nor ESA's contributions will increase significantly within the near future.

The commercial process has progressed furthest with the Ariane launcher. German companies hold 18.58 per cent of a stake in the operating company Arianespace, (Dasa: 7.58 per cent, MAN Technology: 7.49 per cent, the Dasa subsidiary Dornier: 2.66 per cent and three German banks together with less than one per cent).

There is another indicator showing the strength of the German influence: The French Government, which controls 32.22 per cent of Arianespace via its national Space Flight Authority CNES (Centre Nationale des Etudes Spatiales), is prepared to give up shares. Dasa, who managed to realise a turnover of over 700 million DM with the Ariane-4 rocket has already declared an interest.

The second German company which is making a significant turnover with the European launcher is MAN Technology. MAN is the supplier of tanks, turbo pumps and gas generators. The annual turnover from Ariane business is around DM400 million for MAN.

The second important field of activity for Germany's spaceflight industry is the International Space Station. Dasa has the overall control for the construction of the European Space Lab COF (Columbus Orbital Facility), which is intended to dock with the station in 2003. One is currently working on a concept at Dasa in Hamburg, which will indicate how to use the laboratory commercially.

One of the most interesting future markets for Germany's spaceflight industry is only now becoming evident: the communication and media satellites, which are becoming more and more important. Many of these will be orbiting earth at low altitudes. The Iridium System, which was provisionally put into service two months ago, consists of 66 satellites, the Teledesic system, which had been suggested by Bill Gates is said to consist of 288 satellites.

However, at the moment Germany has hardly a presence in this futuristic market which is estimated to have a value of over DM 50 billion in the next few years. It has to be said that the Dasa subsidiary Dornier Satellite Systems (DSS, annual turnover: DM1.4 billion), has supplied attitude control systems and solar generators for the Globalstar System, which consists of 64 satellites. It will be put into service at the beginning of 1999. DSS was able to gain some experience in small serial manufacturing and will attempt to widen its market position in this area.

In the long run the operation of satellites will be commercially more viable than their construction - according to experts a ten times bigger turnover is possible. This is why Dasa will also try to get more involved in the running of satellite systems.

However, any long term perspectives depend on how quickly the industry will be able to merge into a European enterprise. If this will not happen in time Bischoff predicts a "slow or fast infirmity" for European and German companies.

From page 45 of FLUG REVUE 12/98