April 9, 2020. Within a few weeks, the coronavirus Sars-CoV-2 turned the world as we knew it upside down. According to statistics from Johns Hopkins University, there were around 1.5 million infected people around the globe on the cut-off date of April 8th 2020, and more than 83,000 people died of the lung disease Covid-19 caused by the virus. Depending on the country or region, the virus continues to spread at an alarming rate. Almost all states and governments in the world are taking measures to prevent the virus from spreading further. In some countries these restrictions are massive.
Entire economies are forced to halt
In many cases, social life is severely restricted, and curfews are often imposed. Entire economies are forced to halt, including the German economy. The spring report published on April 8th by the most important economic research institutes on behalf of the Federal Ministry of Economics therefore predicts a recession for 2020. „Under these assumptions“, the experts say, „GDP will already shrink by 1.9 % in the first quarter of 2020 and collapse by 9.8 % in the second quarter. This is the sharpest decline ever recorded in Germany since the beginning of the quarterly accounts in 1970 and more than twice as large as that recorded during the global financial crisis in the first quarter of 2009“.
Companies must prove their ability to act
These are the omens under which companies in Germany must prove their ability to act in the further course of this unprecedented challenge. I am glad that the space industry is doing better than other sectors and that market fluctuations are not affecting us to the same extent. In the space sector, we are mainly dealing with long-term contracts, which will ensure long-term capacity utilization despite the crisis. But let us not delude ourselves: In a few weeks' time, companies in the space industry will also notice that components from suppliers are no longer coming on time. OHB, for example, naturally also has suppliers and partners from Italy, Spain and France - countries in Europe that are particularly hard hit by the corona pandemic. And I also anticipate that there could be delays in the awarding of contracts.
OHB took measures early on
So what can a company do to meet such a challenge? I have, of course, been talking a lot about this issue with my friends and acquaintances for a number of weeks now; many of them are themselves in responsible positions in larger companies, some of them are owners like me and are concerned about their family's life's work and the jobs of their employees that depend on it. I confess that these thoughts also concern me. For this reason, I would like to take this opportunity to describe what OHB has done and continues to do to ensure that the company remains capable of acting under the conditions described at the beginning of this report.
First of all, we formed a corona coordination team early on, namely at the end of February, in which representatives from various divisions have been meeting on a daily basis ever since. The team makes decisions based on current information and developments. On the basis of these decisions, we provide the workforce with very specific information. This information policy follows the principles of topicality, transparency and speed. What counts for us is: care comes before speed. Above all, we provide our managers with a guideline against which they can base their decisions in the projects and departments. This is rewarded by the employees. Since we started this crisis team at a very early stage, we were certainly able to prepare ourselves a little better for this at one point or another. The protection of the workforce is absolutely paramount.
This crisis is a stress test for the workforce, for the entire organization. And I would give us as a company a positive report so far. However, we certainly have a more advantageous situation than many other companies at present, because with a few exceptions we can continue to work. Even though we are not a just-in-time manufacturing company, I would still not like to play down our concern about the future. We certainly have a somewhat larger time buffer than companies that depend on just-in-time production supply, but if the current wave of restrictions continues, as we have to fear, we will not be spared the need to prepare further measures to remain capable of action.
None of us knows at the moment how long this crisis, the shutdown and the restrictions linked to the course of the pandemic will last. At our subsidiary OHB Italia in Milan we have been working short-time for some time now. Our subsidiary MT Aerospace in Augsburg, where we produce the components for the European Ariane launch vehicle, has extended its Easter vacation until April 19. Whether we have to consider measures such as company holidays or short-time working at other OHB locations depends on the duration of the pandemic.
Values continue to prevail
We are all thinking about how things will continue in the future, and I expressly include myself in this. And depending on the extent to which people are affected by Corona, there is of course also a certain degree of uncertainty. Fortunately, however, it is clear that our OHB values of solidarity, trust and a "we can do this" mentality will continue to prevail. After initial irritations about how to deal with restrictions in the supply chain or in public life as a company, a common commitment was immediately evident. Those who have to be in the company, come whenever they can and stand their ground. Those who can or must work from home make use of this. And there's no one who doesn't go along with that.
POLItics MUST FOCUS ON CONTRACTS RATHER THAN SUBSIDIES
That's why I am quite confident about our company. I have the same confidence for the space industry. However, we should now use clever instruments as quickly as possible so that certain projects and programs can be continued without loss of know-how, jobs or other setbacks. In my view, it is important, for example, that politicians focus less on subsidies and more on orders in these difficult times. There are a number of beneficial projects that could be commissioned in the near future. What we now need to do is to strengthen the role of the space industry through more applications and by stimulating demand. After all, the crisis has made the need for space activities more visible.
For example, the European Commission could quickly order additional Galileo satellites with funds from the current financial framework in order to further increase the accuracy and speed of the system. Under the Copernicus programme, which will provide important new data on climate change, the planned six missions could now be initiated - the budgetary basis for this was decided by ESA in November 2019 and the need to understand the changes in our environment has not changed as a result of the corona pandemic. In the beginning, ESA funds could be used disproportionately. The EU could then follow suit later, when the new financial framework is in place.
We will be plunged into an economic crisis and public spending will not be as generous as it would be without the crisis. Nevertheless, our industry is less concerned about the future than other companies: The resilience of the space industry in the current situation lies in our products and services, which have lost none of their purpose or usefulness. Satellite systems are essential for many industries and thus bring added value to the economy which is many times greater than the original investment. For this reason, space budgets must not shrink, but must continue to safeguard the performance of the German space industry, which has been built up over the past decades.
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.