Commercial Spaceflight Federation Seeks Bailout Money for Industry

by Douglas Messier
Managing Editor
With the economy grinding to a halt, the Commercial Spaceflight Federation (CSF) is seeking billions of dollars from the federal government to keep the rockets launching on time.
In a March 18 letter sent to Congressional leaders, CSF President Eric Stallmer proposed establishing “a $5 billion grant and/or low-interest loan program to ensure the continued availability of critical aerospace infrastructure, capability, personnel, and mission readiness to maintain assured access to space for national security, civil, and commercial space missions.
“This goal could be satisfied at least in part by considering aerospace/space launch as a ‘critical’ industry qualified under the $150 billion fund proposed by the White House earlier today,” the letter added.
CSF also asked Congress to:
- create a supply chain stabilization program to provide access to zero or low-interest loans for companies as bridge capital in supporting ongoing operations and downstream suppliers;
- provide refunds of all R&D tax credits accumulated through fiscal year 2019;
- direct the Export-Import Bank to speed up the processing of applications for the funding of overseas aerospace deals;
- designate the space manufacturing workforce and critical suppliers as essential and exempt production facilities from local closure orders; and,
- provide essential contractor status to companies serving critical national security needs to allow them to continue operations.
“To maintain operations of essential contractors while minimizing transmission of COVID-19, the Federal Government should make available funding for personal protective equipment (PPE), thermometers, and other support necessary for employees at ‘essential contractors’ to safely continue operations,” the letter said.
The CSF letter follows.
The Honorable Mitch McConnell
Majority Leader
United States Senate
The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
The Honorable Steny Hoyer Majority Leader
U.S. House of Representatives
The Honorable Charles E. Schumer
Minority Leader
United States Senate
The Honorable Kevin McCarthy
Minority Leader
U.S. House of Representatives
18 March 2020
Re: Support critical aerospace capability to ensure mission readiness for critical access to space capability
Dear Congressional Leaders:
On behalf of the Commercial Spaceflight Federation (CSF) and our more than 85 member organizations, I write to seek your support for protecting America’s commercial space industrial base during this time of crisis. Access to space is fundamental to the Nation’s immediate national security, economic, and scientific goals. However, the ongoing COVID-19 situation threatens to inflict lasting harm to this capability without urgent Congressional action.
The United States partners with the domestic commercial space industry to conduct all of its missions to space, including those for the Department of Defense, the Intelligence Community, and NASA. As commercial space companies and government agencies work diligently to prevent the spread of this virus and protect our workforces, the sudden slowdown in programmatic work, combined with the possible shuttering of federal space launch ranges, poses significant challenges to operational continuity for assured access to space for critical missions, and substantial impacts to the commercial space supply chain.
We ask for your attention to six primary measures to provide near-term relief and to maintain America’s assured access to space for NASA, the Space Force, and the Intelligence Community:
1) Establish a Critical Aerospace Capability Grant/Loan Program to ensure mission readiness for critical access to space capability. This program would seek to establish a $5 billion grant and/or low-interest loan program to ensure the continued availability of critical aerospace infrastructure, capability, personnel, and mission readiness to maintain assured access to space for national security, civil, and commercial space missions. This goal could be satisfied at least in part by considering aerospace / space launch as a “critical” industry qualified under the $150 billion fund proposed by the White House earlier today. If companies supporting national security or civil space activities are unable to conduct missions for the Government due to closures of federal facilities (including Launch Ranges), they will not be able to receive mission completion milestone payments, resulting in a significant shortfall of operating capital.
2) Speed up Ex-Im Bank Operations. The Ex-Im bank facilitates the export of U.S. goods and services and provides necessary financing solutions that keeps our nation’s companies competitive overseas. In addition, more than 90% of the Bank’s transactions have directly supported small business. It is a difficult time for the nation, as we struggle to reconcile the impact to our economy from COVID-19, it is important to keep U.S. industries open for business. The Bank could play a crucial role in reducing unemployment and maintaining American manufacturing base if Congress mandated that Ex-Im:
- Quickly process large and small transactions for American businesses to continue to effectively bring in business overseas.
3) Designate the nation’s space manufacturing workforce and its critical suppliers as essential. The Administration should designate the nation’s space manufacturing workforce and its critical suppliers as essential and exempt manufacturing facilities from city-wide closures as long as a plan to contain spread of COVID-19 is in place. This workforce is essential to maintaining the nation’s national security, transportation, and infrastructure industrial base, and support critical government missions. Any interruptions in the work these companies are doing could result in loss of high-tech jobs and talent, as well delays that could put risk in our nation’s space access infrastructure.
4) Direct the IRS to provide for refunds of all R&D Tax Credits accumulated through FY2019 so that companies may immediately access this deferred asset for liquidity, allowing for continued innovation through R&D reinvestment. Companies across the United States are seeing a significant reduction in operating capital as a result of COVID shutdowns and the broader economic slowdown, but companies require access to capital in order to continue operations. Therefore, the IRS should provide for refunds of all R&D Tax Credits accumulated through FY2019 so that companies may immediately access this deferred asset for liquidity.
5) Establish a Supply Chain Stabilization program. This program would provide access to zero or low-interest loans for companies in the aerospace and space launch industries to serve as bridge capital in supporting ongoing operations and downstream suppliers as existing cash flows slow or halt as a result of the ongoing public health crisis. This effort would allow companies to continue to pay suppliers for ongoing orders even as government programs slow for the foreseeable future.
6) Provide an “essential contractor” designation to companies serving critical national security needs to allow work to proceed. Widespread closures associated with COVID threaten to significantly postpone critical national security and civil space efforts. These closures could also halt cash flow to prime contractors and suppliers, potentially resulting in downstream closures that would harm the industrial base. Offering a Federal “essential contractor” designation to companies supporting national security and critical civil space programs would allow for continued operations within key sectors of the industrial base in support of critical national priorities. To maintain operations of essential contractors while minimizing transmission of COVID-19, the Federal Government should make available funding for personal protective equipment (PPE), thermometers, and other support necessary for employees at “essential contractors” to safely continue operations.
CSF and its members look forward to working with Congress on this matter that directly impacts the health, safety, and economic security of America’s critical aerospace capability and ability to maintain mission readiness for critical access to space. We appreciate your attention to this matter. Should you have any questions or wish to discuss further, please contact me.
Sincerely,
Eric W. Stallmer
President
Commercial Spaceflight Federation
11 responses to “Commercial Spaceflight Federation Seeks Bailout Money for Industry”
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How about we take these funds from SLS / Orion and JWST ?
The $150B mentioned is far more than the budget on all three of them.
As a cheerleader for true commercial as opposed to cost plus government contractors, I am skeptical that this would be a good move. It’s quite possible I could be convinced, but in general taking the Kings’ shilling involves carrying the Kings’ pike. True commercial should first seek private financing if absolutely necessary.
You must be misreading something. The $150 billion is for travel industry as a whole, not for CSF. CSF is trying to make the case that commercial space should fall under that $150B umbrella
Also, private financing is going to be incredibly limited in very short order
Okay, I missed the $5 billion number which does change things a bit. Still concerned, but not as much. I agree the three programs are not as useful as commercial space.
I am not so sure i agree on the private financing. I think many of the limitations can be overcome by the profit motive with higher ROI. Given the choice, I would pay 10% interest privately rather than 0% and have government strings attached. Most will likely disagree.
I’m not sure if people have poor memories or just never paid attention before .. private financing markets will dry up very fast. It’s not the first crashing of economy in history.
It’s not the first crash. It’s also not unlikely that government involvement causes harm along with the good. Historically anyway. The commercial space industry might well be better off in the long run if it has to find and secure that expensive and scarce investment money. The ones that can’t will go away or find a way to tighten the belt to stay alive.
Much of the private money is still there for a good enough deal. Harder to find, harder to get, and more expensive, but still in existence. I went broke during the recession and managed to find a deal. I would likely have taken “free” money if offered, but what ended up happening was better in the long run.
If you read the letter, it shows that commercial space companies are being affected by government actions: Lockdowns, possible closing of launch ranges, etc. Since government is causing this problem, why shouldn’t government provide money to solve it?
My construction work will take a hit from government offices closing. No permits or inspections stops many jobs cold. Even if the government were to try to alleviate the problems, the help would arrive after the problem had been addressed, whether it was solved or it ruined the company. An assistance check doesn’t help after the car has been repossessed.
Help would go to the connected companies anyway and that ain’t us. That’s my lens on government assistance.
socialism is good
The historical record says otherwise.
Those that don’t study history are bound to repeat it.
Some that do study history are fine with repeating it, as long as it puts them on top.