Maxar warns customers pandemic may delay spacecraft deliveries

WASHINGTON and SAN FRANCISCO — Maxar Technologies warned customers that it may not be able to deliver spacecraft on time or on budget due to the coronavirus pandemic. Nevertheless, satellite manufacturing and testing are continuing in its California facilities. 

In a March 20 filing with the U.S. Securities and Exchange Commission, Maxar said Santa Clara, County’s March 16 order directing residents to stay home to prevent the spread of the COVID-19 virus amounts to a “force majeure” event for the company’s Space Infrastructure business there. 

Maxar operates manufacturing facilities in Santa Clara County, in Palo Alto and San Jose. Maxar initially closed both facilities, but reopened them two days later after determining it was exempt from the county rule. Satellite manufacturing and testing on March 19, said Maxar spokesman Turner Brinton.

“We resumed essential work on our satellite programs in the factory including manufacturing, satellite assembly and test,” Brinton said by email. “We maintained the work-from-home approach for a large proportion of our staff even after we determined that we qualified for the exemption. Employee health and safety are paramount, and we have taken numerous steps to make our work environment safe by limiting the number of people in our manufacturing facility; implementing social distancing and isoltation strategies such as spreading the onsite workforce out over more shifts; and enhancing the cleaning of our facilities.”

Nonetheless, Maxar said it is observing stress in its supply chain because of the pandemic. The majority of Maxar staff are working remotely, the company said, with essential personnel keeping facilities open.

Maxar sent force majeure notices to customers to “protect its legal rights given the uncertain nature of the current pandemic,” and its impact on cost and schedule.

Maxar is building spacecraft for Intelsat, EchoStar, NASA and other customers. In a March 2 SEC filing, Maxar said its satellite manufacturing contracts sometimes include “liquidated damages clauses” that can be triggered if programs miss contractual milestones. 

No Maxar employees have been diagnosed with COVID-19, the company said. California had 1,642 confirmed cases of COVID-19 and 30 deaths as of March 22, according to data compiled by Johns Hopkins University & Medicine. 

California escalated its response to the coronavirus on March 19 when Gov. Gavin Newsom issued a “stay at home” order to “establish consistency … in order to slow the spread of COVID-19.”

“As aerospace manufacturing, communications and defense are federal critical infrastructure sectors, Maxar is permitted to continue its work under the shelter-in-place order issued by California,” Brinton said. “We have implemented workfrom home where we were able to do so, and we also have some of our workforce on site to maintain critical operations. This approach protects our ongoing business operations adn supports our efforts to continue to meet critical customer commitments.”

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