April 28, 2020. Federal Chancellor Angela Merkel recently called the coronavirus pandemic an "imposition for democracy". This is a very apt description of what we are experiencing at the moment and, above all, what we must endure. The nationwide lockdown is forcing the economy and society to adapt to restrictions of their elementary rights of freedom, which are unprecedented in peacetime. I am sure that each and every one of us can tell many stories from our own environment and from that of our friends and acquaintances, which demonstrate the tremendous effort that is required to combat the virus.
Cultural and economic lockdown
The pandemic is forcing churches and religious communities as well as cultural institutions to cease their activities. For many people that makes the situation even harder, since these are the organizations that give comfort in difficult times and bring variety and joy into many a difficult life. Sports facilities, schools and day-care centers are closed – an additional heavy burden for many families. Only after the crisis will we know what effects the nationwide compulsion to retreat into the private sphere will have on society and on how people deal with each other.
It is not for me to judge who is affected how badly, I can only speak as an entrepreneur and as such I see that the economy is also affected in all its diversity and breadth: all companies involved in travel, hotels and restaurants, mobility, events, trade, art and culture are dramatically affected. I could never have imagined that the automotive industry in Germany would ever come to a standstill. In the aviation industry and the air transport sector, many companies fear for their survival. For OHB, it is therefore very fortunate that we are part of the space industry. In this industry, we do not have to fear for our existence. Not yet.
Impact on the space industry
Companies in the space industry have the advantage that their projects are generally long-term contracts; we are also not so strongly tied to an industrial just-in-time supply chain. But let's not fool ourselves: Even the one-eyed among the blind is still impaired. We will have to face delays due to supply bottlenecks. And our employees are at the limit of their ability to cope with the balancing act between childcare and working from home. We are therefore preparing to have to use the instrument of short-time working. At our Milan location, which has been strongly affected by the measures due to the coronavirus pandemic, we have already been doing this for some time. And I do not want to rule out the possibility of this happening at other locations as well.
As a professionally structured organization, we have of course geared our crisis management to various scenarios. We have established a well-balanced system allowing us to quickly identify possible underutilization in all areas of our company. So far, this has helped us to keep both productivity and motivation high. What I am particularly pleased about is that our customers recognize and appreciate this. The message is: So far, we have coped well with the crisis. At the same time we must not fool ourselves: Germany, like many other countries, is only at the beginning of the pandemic. No one is currently in a position to predict how long the crisis will last.
For this reason, the Management Board and Supervisory Board of OHB SE have recommended to the annual general meeting that no dividend be paid this year. Instead, we will be keeping the sum of the planned dividend - around EUR 7.5 million - within the company in order to be able to respond more effectively and flexibly to crisis scenarios. It will also give us additional possibilities to secure what is OHB's greatest asset: the expertise of our employees. However, it is also true that in these times all involved parties have to make a contribution if they are to survive the crisis together. From today's point of view, "surviving" means that OHB will be able to remain in the market with roughly the same strength, size and substance. This is our common goal and to achieve this we must all continue to work in a focused, efficient and above all prudent and forward-looking manner.
Space is a European industry
Of course I cannot promise that it will develop in this way. Nobody can do that. Things are progressing far too dynamically for that. It is already difficult enough to plan from week to week. Much will also depend on how quickly the southern European countries, Spain and Italy, but also France, get their economies back on track and how quickly the supply chains are back up. If this happens by the summer, I am confident that the German space industry will get through the year without serious dents. Space is a European industry, something we are proud of in more normal times and hopefully will be able to be proud of again after the current crisis is over. That is why it is now also part of solidarity to accept the much harsher effects of the crisis on our southern partner countries and to give confidence and encouragement to our colleagues in Italy, France and Spain.
Subsidies are not enough
But let us not delude ourselves either: Most companies will not be able to do so without government support. And I am not talking about short-time working allowances or other subsidy measures. Rather, the aim will be to support reconstruction, while retaining technological know-how in Europe and safeguarding important jobs, and to ensure that not only the states of Europe but also their citizens derive the greatest possible benefit from space activities. Space programs in the fields of navigation (Galileo) and Earth observation (Copernicus) are ideally suited to this and, since most of the individual instruments of these programs have already been defined, it is now important to develop them further and get them up and running as quickly as possible with the resources available from ESA and the EU.
Born in 1962, Marco Fuchs studied law in Berlin, Hamburg and New York. He worked as an attorney in New York and Frankfurt am Main from 1992 to 1995. In 1995, he joined OHB, the company that his parents had built up. He has been Chief Executive Officer of OHB SE since 2000 and of OHB System AG since 2011. Marco Fuchs is married and has two children.