Monday, October 16, 2017

A Game Changer for Canada: Airbus Takes a Majority Stake in Bombardier's C Series Program

          By Henry Stewart

Here's something which, over the next few weeks, will completely destroy several very, very traditional "Chinese Walls," erected decades ago within the Canadian aerospace industry.

Until today, those information barriers (originally erected around business verticals to prevent exchanges that could lead to conflicts of interest with the Federal government) separated not just Canadian aerospace military and civilian providers, but also the aeronautical and space focused providers which traditionally populated the Canadian aerospace industry.

But not anymore. Airbus, a European multinational corporation that designs, manufactures, and sells civil and military products for both the aerospace and space sectors, is poised to buy a majority stake in the Bombardier C Series program.

As outlined in the October 16th, 2017 Globe and Mail post, "Bombardier teams up with Airbus to secure C Series future," Bombardier Inc. has struck an agreement "to sell control of its marquee C Series airliner program to Europe's Airbus Group SE, a bet that handing the keys to a better-financed global giant will ensure the Canadian plane maker's future in the face of relentless competition and punishingly high tariffs imposed by the United States."

As outlined most recently in the October 8th, 2017 post, "Au Revoir, Bombardier," the C Series program has been at the centre of major political and investor drama in Canada since its inception, and has driven Bombardier to the brink of bankruptcy.

According to the Globe and Mail article, the Quebec government supports the transaction with Airbus, as does the Caisse de dépôt et placement du Québec, a major Bombardier shareholder. Ottawa has also offered a preliminary endorsement of the transaction, saying "it would require review under federal investment law."

As outlined in the article:
Although Bombardier itself has not been sold, the deal is an acknowledgment that the company could not go it alone in the global market for passenger airlines.
Under the agreement, Airbus will take a 50.01-per-cent interest in the C Series limited partnership for no cash consideration.

In exchange, it will offer Bombardier's 100- to 150-seat plane its global procurement, sales, marketing and customer support expertise. Bombardier's stake will be 31% and Quebec will own about 19% when the deal is finalized.

Of course, Airbus is comprised of both military and civilian subsidiaries, as well as aerospace and space components and possesses an aggressive Canadian subsidiary which would surely like to expand its list of successful contracts. Boeing's fight with Bombardier over the C Series has already influenced the Canadian military procurement of new Boeing F-18's.

This is certainly a novel situation for Canadian industry to be in. As outlined in the October 12th, 2017 post, "Osborne Steps Down at Canadian MDA as it Responds to Questions About its US Based "Maxar" Future," US based MacDonald Dettwiler (MDA) president Howard Lance even called Airbus the only company able to compete with MDA/ MAXAR across the various business verticals.

And now both companies are well entrenched in the Great White North and able to use a wide variety of both domestic and international business resources to influence procurement decisions. Will the Federal government be strong enough to control the power these two behemoths bring to the table?

Time to queue up the explosions and stand by for action. Anything can happen now.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Researchers, Heal Thy Selves!

          By Brian Orlotti

According to Alan Bernstein, the president and CEO of the Canadian Institute for Advanced Research (CIFAR), the Canadian scientific and research community needs more than money. It needs a "bold new vision" of how to perform scientific research.

Bernstein at the 2015 Canadian Science Policy Conference (CSPC), which took place in Ottawa, ON on November 25th - 27th, 2015. As outlined in his Wikipedia entry, Bernstein has received a variety of awards and accolades including "the McLaughlin Medal of the Royal Society of Canada, the Robert L. Noble Prize from the National Cancer Institute of Canada, the Genetics Society of Canada Award of Excellence, the 2001 Australian Society of Medical Research Medal, four honorary degrees, the 2007 Medaille du merite from the Institut de Recherche Clinique de Montreal, the 2008 Gairdner Wightman Award and the Order of Canada in 2002. He is a Senior Fellow at Massey College, University of Toronto. In 2015, Bernstein was inducted into the Canadian Medical Hall of Fame." Screenshot c/o Canadian Science Policy Centre.

As outlined in his October 12th, 2017 MacLean's post, "It’s time for a bold new vision for Canadian fundamental science," Bernstein made the point that aside from the need for more funding, the Canadian research field has large barriers to entry, especially for young researchers.

He questioned why ambitious young researchers would choose a career in science when the odds of securing a grant are only between 8-12% in health research, or when average funding for physical sciences has remained nearly unchanged for the past decade at less than $35,000 per year and is lower today than in the early 2000s. Bernstein warned that Canada risks losing an entire generation of scientists unless it finds ways to attract and fund the best young researchers.

Bernstein provided two examples for Canada to learn from.
  • The first was the last "golden age" of Canadian science funding i.e 1997-2007 which saw large across the board funding increases. According to Bernstein, "that transformation wasn’t just about money: It also profoundly changed the landscape for research in Canada. New agencies to fund research infrastructure, health research and genome science were created as were new programs like the Canada Research Chairs, the Indirect Costs Program and the Canada First Research Excellence Fund. These changes were not easy; real change rarely is. For example, the creation of the Canadian Institutes of Health Research (CIHR) in 2000 was the culmination of an intense and difficult national discussion that lasted almost two years."
  • The second example was more recent, more difficult and occurred in the UK, whose government recently introduced major changes including the merging of eight separate agencies into a single entity overseen by a single board and chief executive; UK Research and Innovation. In essence, the second example produced a fast-moving system composed of increasingly international, interdisciplinary, and collaborative units operating under a centralized structure. 
Bernstein noted that the UK model appeared too ambitious for Canadians given that the committee that wrote the 2017 Canada's Fundamental Science Review, which was headed by Canadian physician David Naylor, rejected similar changes for Canada as being "too risky."

But he thinks we should do it anyway.

Bernstein did agree with the crux of the 2017 Naylor report’s findings, namely that Canada’s scientific research structure suffers from 20 years of balkanization and bloat, with too many agencies (in traditional academic style) at each other’s throats with varying cultures, rules, grant levels and partner requirements.

This disunity and lack of coordination has compromised the Canadian research establishment’s ability to plan and act strategically.

Bernstein stated that Canada’s research system must place far more emphasis on interdisciplinary and international research teams, rather than the current individualist "superstar/prima dona" oriented approach.

This notion has met resistance from senior researchers who fear encroachment on their individual fiefdoms. Bernstein himself sees no conflict between individual  and team-based research, arguing that the Canadian system should utilize both.

There are hundreds of academic space science conferences going on every month in Canada and around the world. Most focus not just on publicizing and promoting new research and developments, but also depend on driving revenue generating and fee paying undergrad admissions to the faculties and organizations being promoted, whether or not there are jobs available for the surviving graduates and post docs. This particular, just concluded event was sponsored by a variety of universities, colleges, institutes, associations and private organizations. After all, low cost, well trained and pliable help is hard to find. Graphic c/o MSSA

While streamlining bureaucracy and bringing squabbling fiefdoms into line are positive steps, the Canadian research field must take more immediate steps to make itself more attractive to young talent.

After all, we live in a time when the tech industry is using multiple incentives to entice new talent (bonuses, catered meals, gym memberships, paid training) and senior academics draw six figure salaries at their respective institutions, but Canadian graduate students live in poverty and squalor..

Researchers heal thy selves.
Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

Friday, October 13, 2017

Short List for the $950Mln CDN Supercluster Initiative

          By Henry Stewart

The Canadian government has selected nine consortium's for its supercluster program shortlist, including the MOST21 aerospace focused bid led by Montreal-based flight simulator maker CAE Inc., and an agrifood focused proposal spearheaded by Calgary-based Agrium Inc., which includes Richmond BC based MacDonald Dettwiler (soon to be re-branded as "MDA" in much the same way as what was once Kentucky Fried Chicken is now known only as "KFC").

Screenshot of the MOST21 website taken on October 13th, 2017. The Canadian aerospace community is mostly on-board with this choice. As outlined in the October 10th, 2017 Aerospace Industries Association of Canada (AIAC) post, "AIAC Applauds Shortlisting of Aerospace Supercluster," quoted AIAC president and CEO Jim Quick as expressing his "delight" at the choice. The October 10th, 2017 CARIC newsletter quoted Consortium for Aerospace Research and Innovation in Canada (CARIC) CEO Denis Faubert as stating that, "It’s a strong message from the mobility industry: a willingness to participate actively to the creation of jobs and wealth in Canada. This supercluster may become a major player and narrative for Canada’s role on the international scene." Graphic c/o MOST21.

As outlined in the August 31st, 2017 post, "MacDonald Dettwiler is Part of an Alberta Based Agrifood ‘Supercluster’ Proposal," the agrifood proposal plans to explore the uses of satellite data and other technology to improve crop yields.

Left out of the final selection is Satellite Canada which, as announced in the August 3rd, 2017 post, "Satellite Canada Applies for Innovation SuperCluster Funds," put together a consortium of thirty-nine Canadian space focused corporations, associations and academic institutions willing to contribute time, effort and up to $328Mln CDN, to apply for the Federal supercluster matching funds.

An overview of the nine remaining successful applicants is included with the October 10th, 2017 Globe and Mail post, "Short list for $950 million supercluster initiative revealed." For more on the program, its worth checking out the October 12th, 2017 Federal government Innovation superclusters initiative (ISI): Program guide.

Final bids, due from the shortlisted groups by November 24th, could end up being different from the current shortlist. The consortiums have been encouraged to add more participants, including those from unsuccessful applications, in order to create “more ambitious job-creation plans.”

It's also worth noting that not everyone is enamored with the supercluster concept. A good place to start exploring that is the October 11th, 2017 Financial Post article, "Tech accelerators are booming — what's not clear is whether they work."

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Thursday, October 12, 2017

Osborne Steps Down at Canadian MDA as it Responds to Questions About its US Based "Maxar" Future

          By Chuck Black

This blog, along with quite a few of the internal staff at the Richmond, BC based MacDonald Dettwiler (MDA) office, has known for a week that Don Osborne, the president of MDA's Information Systems Group, was resigning his position. 

It's unusual to have a conference call during the blackout period leading up to the formal quarterly announcement of earnings, which in this case will be on November 2nd, 2017. But Maxar CEO Howard Lance held one anyway. He even included Osborne as part of his leadership team as recently as today, as can be seen from these power-points taken from the October 12th, 2017 Maxar Shareholder Luncheon and Webcast, which Lance hosted. During the presentation, Lance introduced the other MAXAR executives by name but forgot to mention Osborne, although he was prominently listed in the power-point presentation. For a complete audio recording of the presentation, check out the webcast  and presentation here. Graphic c/o MDA/Maxar.

But now it's official. According to an October 12th, 2017 e-mail from Wendy Keyser, the manager of marketing communications with the MDA Information Systems group:
Don Osborne has chosen to step down from his position as president of MDA effective October 31st. We’ve begun a search for the best internal or external candidate to lead MDA with a focus on Canadian nationals.

Don has been a valuable member of the team and we appreciate his many contributions to our success. We wish Don the best in all his future endeavours.
Osborne, at least until his resignation takes effect at the end of the month, is the senior Canadian based MDA employee of the new San Francisco, CA based Maxar Technologies Ltd. As outlined in the October 5th, 2017 post, "MDA Acquisition of DigitalGlobe Closes; New US Based Combined Company now called Maxar Technologies," the new Maxar technologies includes the old Space Systems Loral (SSL), MDA and DigitalGlobe, which have been combined into a single entity.

Earlier this month, Osborne sent out an e-mail to internal MDA staff stating that he would be leaving his role effective October 31st. The blog became aware of the e-mail last week and requested clarification from Osborne, Keyser and MDA director of public affairs Leslie Swartman.

In response, MDA released the resignation announcement from Keyser. 

As outlined in the October 12th, 2017 Maxar Shareholder Luncheon and Webcast: the revenues by market and by product line and the synergies expected from elimination of duplicate costs and increased size expected to be realized over the next two years. According to Lance, only Netherlands based Airbus Group can compete with Maxar synergies, "but they're not organized (for commercial operation) the way we are." According to Lance, "MDA and SSL never integrated. Even across Canada, MDA is not integrated. And so the opportunities, we put some of that on pause while we were waiting for the closing, the opportunity now to integrate the whole enterprise, is extremely attractive. That's what's going to deliver the synergies. Its going to deliver an operating cadence and a level of efficiency which we believe is going to be helpful to all four of the (Maxar operating) businesses." In essence, now that the sale has closed, Maxar can integrate, synergize and cut costs. Graphic c/o MDA/Maxar.

But Keyser also released answers to several questions this blog was originally hoping to discuss with Osborne. Here are both the original questions and their responses from Keyser:
  • The deal has closed and there's no doubt that the acquisition is a net positive for the company as a whole. But what's next for MDA in Canada?
MDA is – and will continue to be – one of Canada’s leading technology companies and an internationally recognized leader in space robotics, satellite antennas and subsystems, surveillance and intelligence systems, defense and maritime systems, and geospatial radar imagery. 
MDA has provided government and commercial customers with innovative space systems and solutions for decades. 
The acquisition of DigitalGlobe creates a company that has the scale, resources and technology to create even greater growth and innovation, enhancing our ability to invest, innovate and grow these businesses and our Canadian presence. 
The MDA brand associated with the company’s Canadian business will serve a vital role as part of the Maxar Technologies portfolio. 
MDA will continue to operate independently and be led by a Canadian leadership team, and will remain committed to our enduring and valued partnership with the Canadian government and our Canadian employees. 
  • The Federal government put the kibosh on US control of MDA and its sale to ATK in 2008, mostly because RADARSAT-2 was considered essential to Canadian security and needed to remain under Canadian control. How will the re-organization, acquisition and new corporate structure affect the launch and operation of the follow-on RADARSAT Constellation (RCM)?
This acquisition in no way affects the completion and launch of the RADARSAT Constellation Mission (RCM), which will be a Government of Canada-owned satellite mission. 
  • SpaceQ has indicated that MDA will continue under the MDA name and banner in Canada for the foreseeable future but others disagree. The October 5th 2017 Washington Technology post, "Inside MacDonald Dettwiler's new 'Maxar' era as DigitalGlobe buy closes," even quotes CEO Howard Lance as stating that, "each business unit within Maxar will operate under its current branding as the new name is rolled out through the remainder of this year." Will this re-branding include MDA in Canada?
While we will be phasing out use of the name MacDonald, Dettwiler and Associates, the ‘MDA’ brand name will continue to be used by all of our Canadian businesses and serve as a vital brand within the company portfolio. 
Being an instrumental part of Maxar Technologies will mean that the MDA brand, an icon of Canadian technology growth and innovation, will continue.
  • The same article mentions a second re-org in 2019, when the company becomes "fully American." How will this second re-org affect Canadian operations?
While we cannot discuss future, or forward-looking, plans for our business, rest assured that MDA’s Canadian operations will continue to be managed by an experienced Canadian management team, who will continue executing MDA’s Canadian business plans and investments for growth. 
We remain fully committed to our enduring and valued partnership with the Canadian Government and our Canadian employees.
Of course, any future experienced Canadian management team won't include Osborne. And the real concern at the Canadian MDA offices is over the "synergies" expected to be achieved by consolidating the  services of Space Systems Loral (SSL), MDA and DigitalGlobe into a single entity.

As outlined in the September 6th, 2017 SpaceQ post, "Cambridge Facility Sees Workforce Reduction of 49% Since Honeywell Acquired Com Dev International," the last time a US based space company attempted to develop synergies with a recently purchased Canadian subsidiary, the end result was a substantial loss of Canadian jobs.

Here's hoping that doesn't happen this time. 
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Monday, October 09, 2017

A "Network of Incubators Supporting Space Activities;" The REAL Secrets Behind the Doyletech Report

          By Chuck Black

Want to get to space? According to the preamble of a recently released Canadian Space Agency (CSA) funded report, entrepreneurs and the government can leverage the existing Canadian innovation support infrastructure "in a way that supports the growth of space sector companies without incurring the overhead of building new operations."

The front cover and preamble of the March 2017 Doyletech Report. It was written by Doyletech managing partner Glenn McDougall, "entrepreneur in residence" Neil Knudsen and senior consultant Keith Belinko under contract to the CSA. According to McDougall, "the Canadian Space Agency has played a pivotal role on the research, engagement and articulation of the CSIN incubation and acceleration model." For the complete public report (minus redactions), simply click on the graphic above. Graphic c/o CSA & Doyletech.

That's the core message of the eighty-five page "Study on Concepts and Business Models for a Network of Incubators Supporting Space Activities Final Report on the Canadian Space Innovation Network," more commonly known as the "Doyletech Report."

The name comes from the Doyletech Corporation, the firm which delivered the report to the CSA in March 2017. The complete document (minus appendixes and cost estimates) was released to this blog via a Federal Access to Information (ATI) request in September 2017.

As explained in its executive summary, the Doyletech Report outlines the case for leveraging existing and disparate Canadian capabilities by creating what it calls a "Canadian Space Innovation Network" (CSIN). According to the report:
the CSIN will advance Canada's Innovation Agenda (now called "Canada's Innovation and Skills Plan") by focusing on the people, technologies technologies and companies in the Canadian space sector who provide benefits to Canada (emphasis included with the original document). 
These technologies are felt in such wide ranging commercial sectors as entertainment, transport, telecommunications and resource management. 
Canadians also benefit from space through the myriad government departments that utilize space technologies in the course of their day to day operations.
Federal government departments which either support or fund space based assets in order to support their core mandate. Graphic c/o CSA & Doyletech.

The Doyletech Report strongly suggests that Canada is capable of generating world class and important space activities by utilizing a variety of already existing, domestic tools. 

The plan is "modeled on similar entities supported by the UK Space Agency and the European Space Agency (ESA)," but does not simply create new facilities.

"It's a made in Canada solution," explained Neil Knudsen, one of the co-authors of the report in a interview late last week. "It's a scalable model that acknowledges that business is business, whether or not we're conducting it on the ground or in space."

According to co-author Glenn McDougall "We tried to keep away from the bricks and mortar solutions advocated in the UK, the US and the European Union (EU) where a physical HQ is required to coordinate and manage activities of the network."

"Wherever possible, we tried to take advantage of existing facilities," he said.

A strengths, weaknesses, opportunities, and threats (SWOT) analysis of the CSIN, from the Doyletech report. It's worth noting that, although the SWOT analysis specifically mentions "funding" as a concern in two of the four quadrants of the analysis, the specific amounts needed to fund the CSIN have been redacted from the released report. Graphic c/o CSA & Doyletech.

The report focused on four already in existence, Canadian based start-up assistance organizations (SAO's) and the services they provide. These were the Kitchener-Waterloo, ON based Communitech; the Ottawa, ON based Invest Ottawa, the Montreal PQ based District 3 Innovation Centre and the Edmonton, AB based health technology incubator TEC Edmonton.

The report also assessed the network of ESA Business Incubation Centers and the UK Space Incubator Network in order to come up with a listing of key services needing to be delivered by the proposed CSIN.

Those key services included:
  • Networking opportunities - This was the most common request. According to the report, "while the space sector in Canada is small, knowledge among those participants of what other players are doing is very weak."
  • Access to specialized equipment - The second most requested service. 
  • Access to advisers who understand the space industry and "product design certification."
  • Business support and financing.
  • Access to information related to intellectual property and contract services.
The report mostly glossed over the role of the CSA, in favor of focusing on the role the CSIN could provide by supporting entrepreneurs and start-up space companies. 

Specific space missions and partnerships would be left up to individual entrepreneurs to develop as they see fit. Some entrepreneurs could even bypass the traditional space community as represented by the CSA in order to work with other facilitators, an option unheard of just a few years ago.

At the core of the Doyletech report is a simple acceptance of the obvious. We live in a world where space focused companies sell products and services to more than their national space agencies. As outlined in the February 20th, 2017 post, "Those Pesky Kids at Kepler Communications," there are already Canadian based space companies which have chosen a different path. Graphic c/o Commercial Space blog

The report also outlined a set of preliminary policy objectives for the program. These included:
  • Raising awareness of the market opportunities for space technology.
  • Encouraging the launch of new start-ups in the sector.
  • Fostering collaboration between large multinational enterprises (LNE's), who possess the funding, access to markets and space specific resources, and small-medium enterprises (SME) who "have the technical resources and organizational dexterity to develop and experiment with new applications and processes."
  • Ensuring the sector possesses the required skills.
  • Making greater use of the existing infrastructure to support SME's.
According to Ryan Anderson, the lead organizer for Satellite Canada, a consortium of thirty-nine Canadian space focused corporations, associations and academic institutions:
The report reaches a number of the same conclusions as we have in our research. Primarily that there's no need for a standalone, bricks and mortar space-accelerator.  
Rather, Canada is best served by an organization that provides a layer on top of the existing accelerator ecosystem to provide guidance in areas that are unique to space. 
Where we differ is that Satellite Canada places greater emphasis on the technical issues - we think that access to specialized equipment and facilities will have a greater impact on the success of Canadian space SMEs. 
The report reflects this as well, mentioning that access to specialized equipment "was clearly the second most requested service."
As outlined in the August 3rd, 2017 post, "Satellite Canada Applies for Innovation SuperCluster Funds," Anderson and his team have already applied for Federal matching funds under the Justin Trudeau government's new $950Mln CDN Innovation Superclusters Initiative to build a very similar sort of program to what the Doyletech Report has proposed.

As for Doyletech, "I can't say what the next steps are," said McDougall. "We've outlined a good model. It's up to the government to decide what to do next."

Maybe that's true today. But the Doyletech Report suggests that high level, centralized decision making doesn't necessarily need to be a requirement for tomorrow. 
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Sunday, October 08, 2017

Au Revoir, Bombardier

          By Brian Orlotti

The protectionist Donald Trump Administration dealt a potentially fatal blow to Canadian aircraft maker Bombardier by imposing a nearly 80% anti-dumping duty on its new C Series airliners that were to be sold in the US market.

As outlined in the October 6th, 2017 Canadian Press post, "Bombardier C-Series hit with 2nd tariff by US," the penalty comes on top of a separate duty of 220% imposed by the US Department of Commerce the previous week. The moves mark an escalation of the United States’ trade war against Canada and casts grave doubt over the already-tense North American Free Trade Agreement (NAFTA) renegotiation currently underway. 

The rulings, prompted by a lawsuit launched earlier this year by US aerospace behemoth Boeing Co., has triggered political shock waves in both Canada and the United Kingdom, both home to large Bombardier facilities and thousands of its employees.

Prime Minister Justin Trudeau has accused Boeing of trying to put Canadians out of work and threatened to retaliate by cancelling a major contract to buy 18 Boeing Super Hornet fighters to augment Canada’s aging fleet of CF-18s.

Quebec Premier Philippe Couillard has stated that from now on "not one bolt, not one part, not one plane" made by Boeing should be purchased by Canada until the dispute is resolved.

In the UK, where the C Series’ wings are assembled, Defence Minister Michael Fallon has also vowed to retaliate, though like Canada, British officials are using political back channels with the United States in an attempt to get the duties dropped.

Combined, the two levies will more than triple the price of Bombardier C Series aircraft sold to the US.

Boeing alleges Bombardier used “unfair” subsidies from the Canadian, Quebec, and UK governments to slash prices on the C Series and make inroads with major U.S. airlines, in effect selling at far below cost.

Yet, as outlined in the September 28th, 2018 Global News post, "Bombardier got subsidies? Boeing received $64B from the U.S. government," the alleged $2.5Bln USD ($3.1Bln CDN) in subsidies is utterly dwarfed by the $64Bln USD ($80Bln CDN) in federal loans and loan guarantees (typically non-repayable) Boeing received from the U.S. government between 2000 and 2014.

This is in addition to Boeing’s entrenched status as a prime military contractor, almost operating as a branch of the US military itself. When viewed in this light, the US rulings come across as rank hypocrisy.

The rulings, though a product of Donald Trump’s ultra-nationalist “America First” policy, are not without  opposition in the US.

Bombardier relies on US-based subcontractors for supplying many of the C-series’ subsystems. In an ironic twist, the US Dept of Commerce’s rulings may put many Americans out of work as well.

As outlined in the October 6th, 2017 Globe and Mail post, "Trump administration punishes Bombardier with another import duty," six members of the US Congress representing Kansas and other states that are home to Bombardier suppliers have also weighed in.

"This decision is short-sighted and threatens thousands of good jobs across the country," they said in a joint statement. "We urge the department to work with the parties to find a responsible solution."

Is the true target of US sanctions against Bombardier Canada or China? The October 9th, 2017 Aviation Week post, "Opinion: Why Boeing vs. Bombardier Is Really About China," argues the latter. Screenshot c/o Aviation Week.

Bombardier’s management say they are confident that they will win several new orders for the C-series this year from customers in Asia and Africa. Meanwhile, the US rulings’ true test will come next year when Boeing will need to prove before the International Trade Commission (ITC) that it suffered injury at the hands of the C Series.

Only then will the duties be finalized. Prospects for a repeal of the rulings are slim, however, since US law is biased in favour of the domestic complainant.

As Boeing and the Trump Administration move to crush their Canadian competition, Bombardier (and Canada) must seek out new partners and finally embrace a global mindset.

It’s time for Canadians to truly stand on guard.
Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

Thursday, October 05, 2017

1st National Space Council Meeting in 25 Years Hopes for Money, Promises the Moon & Bemoans Excess Regulations

          By Henry Stewart

US VP Mike Pence might want to see American astronauts return to the Moon, but SpaceX president and COO Gwynne Shotwell called instead for deregulation and more deregulation as space industry executives met with White House officials Thursday.

Screenshot from the CNBC news report on the event. As outlined in the report, "SpaceX is bringing back the dominance U.S. experienced in space in the 90s," an idea repeated by the executives of Lockheed Martin, Boeing, Orbital ATK, Blue Origin and Sierra Nevada Corporation. Photo c/o CNBC.

The occasion was the first National Space Council meeting held since the organization was disbanded in 1993.

As outlined in the October 5th, 2017 CNBC post, "SpaceX president slams space regulations: 'It requires heroics' to make minor changes,'" SpaceX wants that licensing process for rocket launches streamlined so it can launch more frequently. The company it has successfully completed thirteen of thirteen launches this year using a combination of new and reused rocket engines, which Shotwell said "is more than any nation."

According to Shotwell, "If we want to achieve rapid progress in space, the US government must remove bureaucratic practices that run counter to innovation and speed."

Shotwell with the SpaceX Dragon. Photo c/o Success Story.
Others in attendance included Lockheed Martin CEO Marilyn Hewson, Sierra Nevada CEO Fatih Ozmen and Boeing CEO Dennis Muilenburg.

But while, as outlined in the October 5th, 2017 BBC post, "Mike Pence wants to see astronauts return to the Moon" the Trump administration was hoping to inspire business with the exploration of the final frontier, perhaps the real attendance driver for the meeting was the potential for future Federal funding.

According to Pence, ""We will return astronauts to the Moon - not only to leave behind footprints and flags, but to build the foundation we need to send Americans to Mars and Beyond."

And that costs money.

Of course, there's no real doubt that Pence sincerely believes what he said at the meeting. And there's no real doubt that our Canadian Space Agency (CSA) also believes sincerely in what VP Pence is saying.

This belief most assuredly accounts for the CSA's embrace of the proposed US Moon station (as outlined in the September 29th, 2017 Canadian Press post, "Canadian Space Agency developing robotic arms for moon station") and the recent scramble to set up public meetings with US based space companies, such as Sierra Nevada Corporation (SNC), as outlined in the October 3rd, 2017 CSA press release, "Canadian space firms to get access to work on American space vehicles."

In essence, and although without real power or a real mission, the CSA is going to great lengths to create the perception of proximity to power and a mission which can be shared.

Maybe next time, the CSA will even be able to get into the important meetings. As outlined in the October 5th, 2017 SpaceQ post, "Canadian Space Agency President Speaks to a Primarily Student Audience at the Montreal Space Symposium," CSA president Sylvain Laporte spent Thursday in Montreal at a student organized space conference.

According to Wikipedia, the National Space Council is an executive body created in 1989 during the George Bush administration, disbanded in 1993 but re-established in June 2017 by current president Donald Trump. It is a modified version of the earlier National Aeronautics and Space Council which existed from 1958-1973.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

MDA Acquisition of DigitalGlobe Closes; New US Based Combined Company now called Maxar Technologies

          By Chuck Black

Burnaby, BC based MacDonald Dettwiler (MDA) has completed its acquisition of Westminister, CO based DigitalGlobe, Inc.

Screen shot from the October 5th, 2017 MDA "Winning Together Webpage" which provides a high level marketing overview of the new company and lists the new Maxar executive team. Screenshot c/o Maxar Technologies.

The combined company will no longer be known as MDA, but will instead be known as Maxar Technologies, and operate out of the San Francisco, CA offices currently used by SSL MDA Holdings Inc. SSL MDA is the holding company MDA CEO Howard Lance created last year in order to facilitate MDA's US access plan strategy.

The new company will be dual listed on both the New York (NYSE) and Toronto Stock Exchanges (TSX) and will continue to use "the individual business unit brands" over the short term, "but will roll out the new corporate branding design elements by the end of 2017,” according to the October 5th, 2017 MDA press release, "MDA Completes Acquisition of DigitalGlobe, Creates Industry Leader in Satellite Systems, Earth Imagery, Geospatial Solutions and Analytics."

"Our new corporate name highlights the broader capabilities of the combined organization," according to current MDA CEO Howard Lance. "Maxar Technologies encompasses four of the leading commercial space technology brands—SSL, MDA, DigitalGlobe and Radiant—and represents the expanded benefits and value we will offer to our customers, shareholders, partners and employees."

Lance will become CEO of Maxar. However, as outlined in the October 10th, 2017 Denver Business Journal post, "With acquisition by MDA complete, DigitalGlobe's CEO steps down," DigitalGlobe CEO Jeffrey Tarr has stepped down from his role.

According to the article, he will remain "as an advisor to Maxar Technologies through at least January 2018."

The final corporate name was still unknown, but the broad outlines of MDA's US Access plan, released last year, made it clear that the company was about to undergo substantial changes in order to gain access to the US market and US military contracts. As outlined in the October 7th, 2017 post, "Iconic MacDonald Dettwiler is now SSL MDA Holdings, a US Based Company with a Canadian Subsidiary," MDA would need to be reconfigured into a Canadian subsidiary of a US based company. By the end of the year, as outlined in the December 16th, 2016 post, "MDA says No Sale of Canadarm Technology to the US Government in NASA RESTORE-L, DARPA RSGS or "Any Other" Project," the company was insisting that no Canadian developed technology was being used in any of its US contract bids. Screen shot c/o Commercial Space blog.

But other DigitalGlobe employees will join the new Maxar board.

As outlined in the October 5th, 2017 MDA press release, "MDA Announces Senior Leadership Team Appointments Following Closing of its Acquisition of DigitalGlobe," senior executive appointments include:
  • William McCombe, executive vice president and chief financial officer. McCombe was previously senior vice president and chief financial officer of SSL MDA Holdings, Inc.
  • Anil Wirasekara, the "senior financial executive based in Canada, reporting to Mr. Lance." He was previously the MDA executive vice president and chief financial officer.
  • Timothy M. Hascall, executive vice president and chief operations officer. Mr. Hascall previously served as executive vice president responsible for the Imagery business unit at DigitalGlobe.
  • Dr. Walter S. Scott, executive vice president and chief technology officer. Dr. Scott is the founder of DigitalGlobe and previously served as chief technology officer and executive leader of the Platform and Services businesses for the company.
  • Daniel Jablonsky, president of DigitalGlobe. Mr. Jablonsky previously served as general manager of the U.S. and International Defense and Intelligence businesses and senior vice president and general counsel of the company.
  • Tony Frazier, president of Radiant Solutions, the newly created business unit formed from the combination of MDA Information Systems and DigitalGlobe | Radiant. Mr. Frazier was previously senior vice president and general manager of DigitalGlobe | Radiant.
You say "to-may-toes" and I say "to-mah-toes.” MDA calls it an "acquisition," but DigitalGlobe calls it a "merger." Twitter accounts from new partners use slightly different words to describe the same thing. Graphic c/o @LeslieSwartman

  • Bruce Stephenson, senior vice president and chief strategy and corporate development officer. Mr. Stephenson previously served as senior vice president and chief strategy and corporate development officer of SSL MDA Holdings, Inc.
  • Stephanie Georges, senior vice president and chief marketing officer. Ms. Georges previously served as senior vice president at DigitalGlobe responsible for corporate strategy, communications and marketing.
  • Marcy Steinke, senior vice president of government relations and public policy. Ms. Steinke previously served as senior vice president of government relations and public policy for DigitalGlobe.
  • Jeff Robertson, senior vice president and chief Information officer with responsibilities for deployment and development of information technology and cybersecurity. Mr. Robertson previously served as senior vice president and chief information officer for DigitalGlobe.
  • Michelle Kley, senior vice president, general counsel and corporate secretary. Ms. Kley has served as senior vice president and chief legal and compliance officer and secretary of SSL MDA Holdings, Inc.
  • Andrea Bortner is appointed senior vice president and chief human resources officer. Ms. Bortner previously served as senior vice president and chief human resource officer of SSL MDA Holdings, Inc.
All things considered, there's not a lot of ex-MDA employees on the new Maxar board, although there are quite a few ex-DigitalGlobe people. No doubt, that's just a side effect of the cost of entry into the US market.

Expect more changes to occur at MDA's Canadian operations over the next few weeks.
Editors Note: Some of those changes may come faster than originally anticipated. 
As outlined in the October 5th, 2017 Washington Technology post, "Inside MacDonald Dettwiler's new 'Maxar' era as DigitalGlobe buy closes," the new Maxar corporate structure will only remain in place until 2019, "when the company will undertake another reorganization to be fully incorporated in the US."
Bye Bye MDA. We were just beginning to appreciate you. 
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Tuesday, October 03, 2017

Thirty Meter Telescope Construction Moves Forward in "Fits and Starts"

          By Henry Stewart

Almost two years after construction of the controversial Thirty Meter Telescope (TMT) on Mauna Kea (Hawaii's tallest mountain) stalled when the Hawaiian State Supreme Court rescinded its construction permit, the project is officially moving forward again after the state land board granted a new permit for the $1.4Bln USD project.

However, and as outlined in the September 28th, 2017 Associated Press post, "Controversial plans for $1.4bn giant alien hunting telescope on land sacred to Native Hawaiians gets go ahead," the decision has ignited new controversy and opponents are expected to again appeal the decision to the state Supreme Court.

According to the post, "telescope officials don't have any immediate construction plans and will consider its next steps." Plans for the project date to 2009, when scientists selected Mauna Kea after a five-year, around-the-world campaign to find the ideal site for what telescope.

However, and as outlined in the November 1st, 2016 post, "Thirty Meter Telescope Builders Choose Alternative Site To Mauna Kea In Hawaii," the consortium promoting the project has begun exploring alternative construction sites as a back-up plan.

Should the TMT ever move forward the project is "set to alter Canadian astronomy," at least as outlined in the April 7th, 2015 Globe and Mail post, "Thirty Meter Telescope project set to alter Canadian astronomy." According to the article the Stephen Harper conservative government committed to spending $243.5Mln CDN on the TMT in 2015.

For background on the TMT, its worth checking out the December 6th, 2015 post, "Hawaii Supreme Court Rescinds Permit to Build Thirty Meter Telescope."

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Monday, October 02, 2017

Policy Options Begins the "Real" Debate over Canada's Future in Space

          By Chuck Black

It's worth noting that the failure of the Federal government's Space Advisory Board (SAB) to do any more than provide a generalized shopping list of concerns and possible options (under the amusing title of "Consultations on Canada’s future in space: What we heard,") has at least left the door open for others to begin the real discussion.

Will things improve now that the "grown-ups" have joined the conversation? As noted in the IRPP Wikipedia page, "the IRPP's inception was sparked by a proposal by prime minister Pierre Elliot Trudeau in 1968 for the establishment of an "independent and autonomous" institute for public policy research, whose work would be 'available to all governments'"  The IRPP "attempts to broker pertinent policy research between expert researchers, and policy makers and the 'educated lay public.'" Here's hoping the discussion will benefit from these new "independent and autonomous" participants. Screen shot c/o IRPP.

One of the organizations attempting to take the lead in this discussion is Montreal, PQ based Policy Options, the flagship publication of the Institute for Research on Public Policy (IRPP), one of Canada's oldest nonpartisan public policy think tanks.

Last week, the Policy Options published the second of two, loosely affiliated articles outlining contrasting viewpoints on Canada's future in space.

As outlined in the September 27th, 2017 Policy Options post, "Let’s base our space priorities on our national needs," when it comes to satellite communications and earth observation, Canada has played a leadership role over the last fifty years and these areas were chosen as areas of Canadian accomplishment because of domestic considerations, not because of a need to develop partnerships with the US or contribute to international space activities. 

According to the author:
Let’s not just dance to the American tune. Instead, let’s base our space priorities on our national needs first and foremost, while continuing to be good partners with the US on initiatives that complement America’s needs and that will then continue to result in Canadian sales to the US. 
For example, we have developed amazing space technologies in earth observation and navigation that play an increasingly important role in the monitoring of our vast coastal areas and northern regions, but that also suitably serve the needs of the US and many other nations. 
It’s a business model that has worked well for us in the past.
It's worth noting that, if your potential partners are just as confused as you are, there are times when you might want to strike out on your own. As outlined in the September 15th, 2017 post, "Politico Revisits Kennedy's Famous "We choose to go to the Moon" Speech," the current US administration is revisiting many of the questions which concerned earlier administrations. Graphic c/o Politico

The article stands in contrast to the September 15th, 2017 Policy Options post, "Canada's space policy and the U.S.'s gravitational pull," which advocated for a closer alignment of Canada's space interests with US objectives, even when those objectives were focused around military applications.

As outlined in that post:
... expanding Canada’s military role in space in partnership with the United States will be controversial: opposition to the “weaponization” of space has been significant since the 1980s. 
As in the case of US-Canadian missile defence cooperation, there is the risk that moral arguments against Canadian participation will prevail and result in Canada’s space assets being protected by the United States by default, just as Canadian cities assume US missile defences will protect them in the event of an attack. 
It would be far better for Canadians to partner with the United States in the protection of their space-based interests, thereby securing a role for Canada in international dialogue on the peaceful use of near-earth orbit and more distant zones.
Curiously enough, both viewpoints have their champions even within this blog.

It's also worth noting that these day, the best laid plans for exploring space come from the private sector. As outlined in the  September 11th, 2017 Start-up division video, "Elon Musk - When "EXPERTS" Were Against SpaceX - MUST WATCH," the experts are normally a cautious bunch. Video screen shot c/o Start-Up Division.

The twelve part series on "A History of the Canadian Space Program - Policies & Lessons Learned Coping with Modest Budgets," which finished up in June 2017 and was written by Graham Gibbs & W. M. ("Mac") Evans, argued forcefully that the Canadian space program, "because it is and always has been a modestly budgeted program, has learned that leveraging international cooperation is a necessity, not a luxury."

And the sixteen part series on "150 Years of Canadian Aerospace History," which finished up in July 2017 and was written by Robert Godwin, made the argument that, "Canada's aerospace raison d'être" always derived from its uniqueness, "its immense size, its location in the far north as a vast, barely-tracked wilderness of incalculable resources and the logical requirements relating to defence, communications, utilization and exploration which naturally follow from its size and location."

Who will end up defining Canada's future in space. Maybe the answer is that both approaches have their usefulness.

Canada should partner with others when that partnership makes sense for Canada and go it alone when we're able and when it makes sense to do so. In essence, and as outlined beginning with the December 27th, 2010 post, "Canada's Military Space Policy: Part 1, The Axworthy Doctrine," it's pretty much what we've always done.

Either way, at least the grown-ups are finally taking note and coming to the table to discuss the issues. This is a good thing.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Friday, September 29, 2017

Elon Musk Shrinks his SpaceX Mars Rocket to Cut Costs

          By Henry Stewart

Speaking of private sector space pioneers, SpaceX CEO Elon Musk has modified and updated his one year old plan to land on and colonize the planet Mars. 

As outlined in the September 29th, 2017 Thompson Reuters post, "Elon Musk shrinks SpaceX Mars rocket to cut costs," SpaceX now plans its first trip to the red planet in 2022, carrying only cargo, to be followed by a manned mission in 2024.

According to the post:
NASA's first human mission to Mars is expected about a decade later. 
Musk had previously planned to use a suite of space vehicles to support the colonization of Mars, beginning with an unmanned capsule called Red Dragon in 2018, but he (Musk) said SpaceX is now focused on a single, slimmer and shorter rocket instead...
In a presentation at the International Astronautical Congress in Adelaide, Australia, Musk outlined a revised version of his original scheme.

To pay for that rocket, Musk suggested using it to deliver satellites into orbit and to service the International Space Station (ISS). He also suggested that the rocket could be used to transport people between any two points on Earth in less than an hour— or perhaps help build an outpost on the moon.

The complete presentation is available online.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Thursday, September 28, 2017

A New Science Advisor, that "Massive" Science Review, the Deep Space Gateway & the Latest JWST Postponement

          By Chuck Black

Science is a method to help us answer questions about the physical world, officially at least. 

But in this age of military/university partnerships, government grants, industry-funded research and "evidence based decision making," it's not the scientists, but instead its the people who fund the science, who control the questions being asked and the answers being provided.

After all, even scientists have families and gotta eat. Given that, it's useful to note the context of some of the important government focused science and space stories which broke this week.
  • Canadian Prime Minister Justin Trudeau, along with Science Minister Kirsty Duncan, have announced the appointment of Canada’s new chief science advisor, Dr. Mona Nemer. 
As outlined in the September 26th, 2017 Canadian Press post, "Mona Nemer, heart researcher, appointed Canada's new chief scientist," the new chief scientist begins with a staff of two "to help with transition" and a $2Mln CDN annual budget. Her job will be to advise the government on ways to keep "government science accessible and public" and protect "federal scientists from being muzzled."
Dr. Nemer. Photo c/o Sean Kilpatrick/Canadian Press
Many remain cautious over the new appointment. 
As outlined in the September 25th, 2017 Macleans post, "Commander Spock, report to the PMO," the real purpose of the 2015 Liberal campaign promise, and the subsequent appointment, might have been simply to "remind people that Stephen Harper had fired the previous science advisor, Arthur Carty, in 2008." 
But the announcement does provide Trudeau, Duncan and the Liberal government a little extra time and goodwill to deal with their Federal review of science, released back in April 2017 and officially ignored ever since. 
As outlined in the April 17th, 2017 post, "'Massive' Review of Federal Science Funding Finally Released; Will Likely Soon 'Drop Down the Memory Hole,'" no one in government really wants to tackle the reports key recommendation, which is an increase in "core" Federal science funding from $3.5Bln CDN per year to $4.8Bln CDN. Canada currently spends more than $10Bln CDN annually on science research and development. 
Here's hoping the new chief scientist has enough time and funding to cover her new beat.
  • They call it the "Deep Space Gateway," but it's really a US/ Russian collaboration (with the potential for other countries, such as Canada, to contribute) to consider building another space station, this time near the Moon.
As outlined in the September 28th, 2017 Popular Mechanics post, "NASA is teaming up with Russia to put a new space station near the moon. Here's why," the main thrust of this new proposal, first unleashed publicly at the 2017 International Astronautical Congress (IAC2017), which is being held in Adelaide, Australia from September 25th - 29th, is to build a way-point to anywhere we might want to go in the solar system. 
Politically incorrect. Graphic c/o Quote Addicts.
The International Space Station (ISS) in Earth orbit was once considered to be a way-point to anywhere we wanted to go in the solar system, but evidently that was wrong. 
The new station has been pitched as an "enabler" for an "affordable" and "sustainable" exploration architecture and far better than the aging ISS, at least according to the article. 
But the new station is only affordable because its just "half way" to any potential destination and nothing important has so far been defined. 
As outlined in the article, "speculation on the cost of the station is not available yet."
It could certainly end up as a gateway to nowhere, in much the same way as the NASA Space Launch System (SLS), which currently has no real mission to justify its ongoing existence.
Of course, if the Deep Space Gateway is build then the SLS has at least one destination. It could go to the Deep Space Gateway. As outlined in the article, "These plans are all based around the Space Launch System and Orion capsule, NASA’s next-generation system that it hopes will have its first crewed launch in 2023."
Problem solved.  
In addition to Russia and the United States, Canada, Japan, and the European Space Agency (ESA) are all interested in the project. The Canadian Space Agency (CSA) has already issued several small proposals (and pitched at least one idea for the Gateway to use a solar sail) to generate potential contributions.
And that's the real problem with this proposal. Nothing is yet defined and the funding does not yet exist. The Deep Space Gateway is simply a paper study awaiting funding from whichever government or private concern sees fit to salute the proposal, now that its been hoisted up its public flagpole. 
Will the proposal move forward? Stay tuned. 

  • For a sense of what political promises related to science are currently worth in the real world it's worth noting that the James Webb Space Telescope (JWST) has been delayed, again.
As outlined in the September 28th, 2017 Ars Technica post, "The oft-delayed James Webb Space Telescope gets delayed again," the latest delays will push out the next-generation space telescope expected launch in October 2018 into 2019. According to the article, the integration of the various subsystems into a complete satellite is simply taking longer than expected.
The original JWST contract, as described by the September 11th, 2002 New York Times (NYT) article "Next Generation Space Telescope Chosen to Peer into Past" was expected to cost $824.8Mln USD ($1.1Bln CDN) and launch in 2010. 
The current budget is estimated at $8.8Bln USD ($11Bln CDN) and the launch is currently scheduled for 2019, but only if everything goes well, which is kinda like hoping for a miracle based on the history of the program. 
For a sense of the cost overruns and delays which have dogged the program since the beginning, its worth checking out the July 12th, 2011 post, "Tracking Costs for the James Webb Telescope." 
Here's hoping everyone in government funded space and science programs a bit more luck next week.

Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Monday, September 25, 2017

Kepler Communications Co-Founds US Based Small-Sat Lobby Group

          By Chuck Black

Here's another reminder that Canadian space companies must compete in the world marketplace and not just domestically.

Toronto, ON based Kepler Communications has joined with ten other small satellite companies to establish a Washington, DC based trade association tasked with addressing spectrum policies and regulations specific to the growing small-sat industry.

Now they have their own club. As outlined in the  July 13th, 2017 Euroconsult press release, "$30 Billion Market Value for Small Satellites over Coming Decade," over 6,200 small-sats are expected to be launched over the next ten years, "a substantial augmentation over that of the previous decade." The total market value could reach $30.1Bln US ($37Bln CDN) in the next ten years, up from $8.9Bln US ($11Bln CDN) over the previous decade. Infographic c/o Euroconsult.

The new organization, called the Commercial Smallsat Spectrum Management Association (CSSMA), will focus on "issues unique to small-sats" which are not addressed by the larger and more established Satellite Industry Association (SIA), according to the September 22nd, 2017 Space News post, "Smallsat companies band together in new spectrum-advocacy organization."

Founding members of the CSSMA include San Jose CA based Astro Digital, Herndon VA based HawkEye 360, San Francisco CA based Planet and Spire Global, Norwegian based Kongsberg Satellite Services (KSAT), Redmond WA based RBC Signals,  El Segundo, CA based The Aerospace Corporation, international law firm Hogan Lovells and Kepler. Planet, Spire, The Aerospace Corp. and HawkEye 360 are also a part of the Washington DC based SIA.

As outlined in the article, CSSMA members hope that their collective voices "will gain more attention when it comes to spectrum access."

The article also quoted Spire general council Jonathan Rosenblatt as stating that:
... a notice of proposed rule making from the US Federal Communications Commission (FCC) expected early next year about small satellites will be a “big priority” for CSSMA. 
Similarly, small-sat rule-making at the 2019 World Radiocommunications Conference — the United Nation’s once-every-four-years gathering of governments, regulators and companies to address international spectrum allocations — sits near the top of the association’s agenda...
Kepler was last profiled in the February 20th, 2017 post on "Those Pesky Kids at Kepler Communications."
eveChuck Black.

Chuck Black is the editor of the Commercial Space blog.

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