PARIS — Canada’s MDA Corp. purchased U.S. satellite builder SSL and U.S. geospatial-imaging company DigitalGlobe and relocated its corporate HQ to the United States in a straightforward application of Sutton’s law: Because that’s where the money is.
The corporate ensemble, Maxar Technologies, now has a broader base of business — U.S.-based Radiant Solutions is the most-recent addition — and more importantly has access to U.S. government military and intelligence space work.
It is much less dependent on the commercial telecommunications satellite sector, with SSL now accounting for just 10% of Maxar’s EBITDA — not a bad thing given the perhaps-cyclical, perhaps-structural decline in that market over the past couple of years.
Seeking to avoid a repeat of Airbus in Europe
A similar logic drove the consolidation of the company now known as Airbus Defence and Space. Starting in the 1990s, Airbus’s French, German, British and Spanish components, once national champions in their territories, wee consolidated and became Airbus-branded.
But what’s obvious for a business is not necessarily attractive to national governments.
In the Airbus case, the German government looked at the enlarged company not as a stronger player in international space markets, but as a former German entity now taking on a French coloration.
The result: Berlin seeded the small OHB with government contracts including the German military’s satellite radar surveillance system and help create what is now OHB SE, formally designated by the 22-nation European Space Agency (ESA) as Europe’s third satellite system integrator.
Canada is not Germany but Maxar is clearly aware of the need to portray MDA Group as being just as Canadian as maple syrup.
That job fails first on Mike Greenley, who in January was named president of MDA Group.
Greenley knows something about being a Canadian unit inside a larger multinational. His background is with L-3 WESCAM, CAE Canada and General Dynamics.
Like his predecessors at MDA, Greenley wants to persuade the Canadian government that a healthy Maxar makes for a healthy MDA, and that a growing space-technology company must look beyond Canada if it wants to survive.
He would like the Canadian government — which has a cooperation agreement with ESA to take part in some ESA programs — to elaborate a clear strategy to help MDA maintain its 1,900-person work force and offer business to Canada’s small- and midsize space technology companies.
Six months into his job, Greenley is now beating the bushes to that end. On June 28, he gave a speech to the Greater Vancouver Board of Trade. On July 3, he spoke to Business Vancouver’s BIV radio: https://bit.ly/2ufHBEx
“MDA is the Canadian business within Maxar,” Greenley said during the broadcast. “The Canadian market’s only so large and you have to export worldwide…. In many of those [space] sectors, the United States is one-half of the world market. If you want to continue to grow, it’s great to have access to that market.
“In things like space, especially military or more classified space work, you need to be an American company o have access. So we will get growth from that.”
That’s for the background. Now the direct pitch to the Canadian government:
“My job is to run MDA with the 1,900 people at five cities across the country and to get exports from Canada to other countries worldwide. We will absolutely continue to the that — with technology developed in Canada, intellectual property registered in Canada, employees employed in Canada and taxes paid in Canada. So we’re Canadian, we’re just inside a more dynamic international firm.”
Greenley said 80-90% Canada’s economy is from small and midsize companies. To be sure that small space-technology companies get a hearing from Canada’s largest space company for their products and services, MDA is creating the MDA Launch Pad. It’s a separate office that will funnel ideas to MDA’s leadership.
How successful Greenley will be is unclear. MDA officials for years, along with the Aerospace Industries Association of Canada, have warned that Canada’s government space spending lags that of other OECD nations.