By Tim Hepher
PARIS (Reuters) -The European Space Agency unveiled plans on Thursday to speed up payments to the space industry in the face of mounting job cuts, while imposing more scrutiny following cost overruns and delays.
Director General Josef Aschbacher announced the measure after a council meeting of the 22-nation agency, a week after Airbus announced 2,500 job cuts mainly in its loss-making satellites business.
“Profitability has been raised as a major issue,” Aschbacher said, citing recent announcements at Airbus Defence and Space and Franco-Italian rival Thales Alenia Space.
The proposed support will include increasing the level of downpayments on new contracts and releasing progress payments more quickly without waiting for all development milestones to be completed, “which of course takes much longer,” he added.
But the package of help also comes with greater scrutiny.
Aschbacher said a newly formed Independent Project Management Authority would be tasked with examining new programmes to ensure they are “realistically prepared”.
“We are working in space technology where we are always expecting the unexpected… We will have to deal with this, but at least from a cost and schedule perspective, we would like more of a conservative manner to make sure that the planning is going very well,” Aschbacher said.
Neither Airbus nor Thales had any immediate comment.
Aschbacher told Reuters last week that Europe’s space industry needed the muscle to compete globally, warning Europe risks falling behind in the new space race. European firms face fierce competition from fast-growing constellations in low Earth orbit such as Starlink, developed by Elon Musk’s SpaceX.
Airbus has taken a total of 1.5 billion euros ($1.62 billion) of charges on satellite manufacturing losses in recent quarters.
These are mainly driven by the commercial OneSat programme, but industry experts have said ESA’s EGNOS system, which improves the accuracy of existing global positioning signals, is also one of the projects that has been struggling.
Also under scrutiny are parts of the Galileo navigation system that is spread across the industry and some ESA-related Earth observation programmes.
ESA did not identify any of the projects on its watchlist.
Airbus is expected to give more details of job cuts at its space systems business, as well as a wider reorganisation of its Defence and Space division code-named Proton, in early December. It has told staff it aims to avoid forced redundancies.
Thales is also in talks with unions over plans announced earlier this year to cut 1,300 positions in its loss-making space activities, including around 1,000 in France.
France’s CFDT union said on Thursday the space losses at Airbus were due to bad management and the Force Ouvriere union said the growing industry crisis raised political concerns.
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(Reporting by Tim HepherEditing by Peter Graff, Susan Fenton and Sharon Singleton)
