Boeing in Satellite Deal With Alcatel

Boeing Co., hoping to bolster its beleaguered satellite-making unit in El Segundo, is teaming up with a European rival to develop and build components for commercial satellites.

Boeing said Thursday it struck a partnership deal with France-based Alcatel, Europe’s largest satellite maker, to help develop and make communication subsystems for future satellite projects.

The pact is the latest by aerospace companies to form transatlantic partnerships as a way to expand the market for their products. It also represents a fundamental shift for Boeing, which has been a “soup to nuts” maker of satellites.

“For Boeing, it’s rather novel,” said Marco Caceres, a space analyst for Teal Group Corp. “Boeing likes to do things on its own. They would contract out a few things, but the actual assembly, integration, major subsystems, they’ve done in house.”

But Caceres said that with recent technical problems with one of Boeing’s line of commercial satellites and because it faced a serious downturn in demand for commercial satellites, the company was “looking for any way to keep its production as busy as possible.”

Boeing was once the world’s largest commercial satellite maker but has lost market share to European competitors such as Alcatel. Since 2000, its satellite-making unit, Boeing Satellite Systems, has slashed nearly half of its workforce in El Segundo to about 5,000 employees

A Boeing spokeswoman described the partnership as a “strategic” move and said it would not entail any cuts in the workforce.

Among the first projects for the partnership will be developing a satellite for a radio service, Boeing said.