GPS a map to aerospace revenue streams

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Global positioning satellites kept the aerospace industry — and Colorado Springs companies — aloft in 2010.

The aerospace economy grew 7.7 percent in 2010, reaching a record total of $276.5 billion, and the industry as a whole has grown 48 percent since 2005, thanks in large part to the boom in GPS products.

Nowhere is the GPS success more evident than at the 27th annual Space Symposium, held this week at The Broadmoor.

Aerospace companies filled three halls and part of the parking garage to show off the latest GPS monitoring equipment, satellites and rocket propulsion systems.

Braxton Technologies, headquartered in Colorado Springs, is one company that has benefited from GPS sales. Braxton has spent years researching and developing its next generation of ground systems for the GPS satellite constellation. Those systems are now on the market — and selling well.

“We expect we’ll see those sales continue as we roll out the next generation,” said spokeswoman Julie Willis. “GPS, we use it and we don’t even know we’re using it.”

The U.S. military relies on GPS to conduct ground and flight operations in theaters of war, while its commercial uses include weather mapping, navigation and tracking.

Braxton not only relies on military and government contracts, like others in the aerospace industry, it also is focusing more on the commercial side of business.

It’s not alone. Devices and chipsets that use the global positioning system satellites for navigation and logistics were the biggest contributor to the space economy last year. It’s part of a trend that has been in play since 2005.

Government spending

Government spending, on the other hand, is growing at much smaller rates, according to the Space Foundation.

That’s because government spending for aerospace in 2010 grew only 0.3 percent to $64.63 billion last year, according to the Space Foundation.

Diversity in the industry is the key to its strength, said Micah Walker-Range, director of research and analysis at the Space Foundation.

“We’re seeing a greater growth on the commercial side than the government side,” he said. “We’re not seeing the sort of government cuts though that are so visible in other areas of government. That’s good news.”

It’s definitely good news for ITT Mission Systems, headquartered in Colorado Springs. Thanks to more than $1.8 billion in government contracts last year, it hired more than 10,000 employees, most of them stationed overseas.

ITT Mission Services is a branch of ITT that focuses on logistics and services to the military. After a recent reorganization that involved arranging its business by global geographic region, the company is working closely with Afghan security forces, as well as providing services to Qatar and Kuwait, said spokesman George Rhynedance.

Local hiring

While some companies in the Springs might be hiring, the overall U.S. space workforce declined about 1 percent since 2009, mostly due to the phase-out of the space shuttle program, due to end this month.

However, the sector has shown remarkable salary growth, with the average space industry salary more than double the average private-sector salary.

The U.S. military cut space jobs by 6 percent in 2009, the most recent period reported.

But Braxton might be picking up some of those jobs. Once the government issues the final award for its GPS ground systems contract, the company could be in hiring mode, Mills said.

“We typically hire based on the contract,” she said. “So we’re waiting on that to happen. It’s probably going to be in the next few weeks.”

International competition

The U.S. isn’t alone up there — and hasn’t been for a long time. In fact, it’s getting a little crowded. But satellite launches have slowed, said Walker-Range.

While the number of launches worldwide was down for the first time since 2006, the number of payloads was up. Troubling news: China’s launch rate equaled the United States’ for the first time, he said.

“But that’s for number of launches,” Walker-Range said. “When you look at payload weight, they still have a long way to go to catch up.”

Congressional concerns

Despite healthy growth in both salaries and the industry, budget battles in Congress cast a pall over the glitzy events this week. All the local companies were keeping an eye out for what might happen with the 2012 budget, after a bruising political battle about this year’s budget.

“I don’t think you’d find anyone who isn’t worried,” said ITT’s Rynedance. “These are tough times economically. We’re keeping an eye out.”

For ITT the budget battles mean a delay on an anticipated Air Force request for proposals to provide services and maintenance for its space launch areas. It’s agreed to partner with L3 and BAE to provide infrastructure. All three companies are waiting on the government to issue the request, so they can give their proposal.

“It’s a big contract, and we have some great partners,” he said. “We’re confident that it will be released very soon.”

Yet even as the government pulls back its support, private industry is trying to step in. Prize models and export credit agencies are also filling the gap.

“It’s interesting, the way it works,” said Walker-Range. “Export credit agencies provide loan guarantees for the financial sector that back space projects. Banks can lend money and know that they’re backed by the government.”

And the export credit agencies can make strange bed fellows. Recently, American company Iridium wanted to finance the next generation of satellites. A French credit export agency backed the loan, he said.

“That way, they could guarantee some of the manufacturing for the satellites would be done in France,” he said. “It benefits everyone.”

Despite slowing government involvement, the U.S. government still spends more money in space that all the other nations combined.

To Braxton’s Willis, that isn’t surprising.

“Really, it’s the backbone of the country,” she said. “Think about GPS, satellites, communication. It really is the backbone of who we are.”

Colorado aerospace

63,230 employed in space-related jobs

24,740 employed by private space companies

400+ companies & suppliers

6.5% space employment growth 2005-2010

Government spending

$64.3 billion – United States

$4.60 billion – European Space Agency

$2.24 billion – China

$1.63 billion – European Union

$.18 billion – Brazil

$.29 billion – Canada

Photos from the event

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