Hughes Wins $1-Billion Deal for 11 Satellites : 1,000 New Jobs Will Be Created at Company’s Facility in El Segundo

Hughes Aircraft said Friday that it received orders and options worth more than $1 billion for 11 communications satellites, a windfall that will create 1,000 new jobs at the firm’s Space & Communications Group in El Segundo.

The orders signal an end to the protracted downturn in the commercial satellite market over the last several years, in which new orders dried up as a result of overcapacity and the Space Shuttle Challenger accident.

“We expect this whole area of the company to grow steadily from now on,” Hughes Chairman Malcolm Currie said in a telephone interview. “You will see some acquisitions and other developments that will result in additional growth.”

Hughes, a subsidiary of General Motors, was awarded an initial $120-million contract by the Navy on Friday for one communications satellite, with options for nine more, a program worth more than $1 billion through 1996, the company said. The Los Angeles-based aerospace firm beat TRW and General Electric in winning the contract.

The firm’s Space & Communications Group has 11,000 employees, with about 9,000 in Los Angeles. The preponderance of the 1,000 new jobs will be for engineers and technicians in El Segundo. Hiring has already started, Hughes said.

Building Japanese Satellite

Separately, Hughes said it received a $74-million order to build a weather and communications satellite for Japan’s National Space Development Agency. Hughes is teamed with Nippon Electric in that program.

Currie said the Navy sale, coupled with another recent sale of two satellites to Australia, shows that Hughes remains the industry leader in communications satellites.

Hughes has long held about half of the world market for communications satellites, but the loss of the space shuttle system, which was used to launch commercial satellites, posed a threat to the company’s position because Hughes had designed its satellites to custom fit the shuttle.

The company quickly designed a new platform, termed the HS 601, which can be launched on expendable launch vehicles, such as the Atlas or Titan rockets. Currie said it was critical for the company’s future to secure production contracts that would get the program going.

“It has great strategic value to the company,” Currie said of the recent awards. “It gives us a production capability.”

So far this year, the company has received orders for 13 of the 16 communications satellites ordered worldwide. Excluding the Navy orders, Hughes still has won three of the six commercial orders placed this year.

The company also has a variety of plans for business video and data transmission systems under way at its Hughes Communications subsidiary, which has been one of the largest users of Hughes satellites.

“We see signs of it taking off, particularly in the business network field,” Currie said. “I feel personally that in the mid-1990s, direct broadcast by satellite for high definition television will be a giant new industry.”

Plans Bid for AT&T;

The company also plans to submit a bid later this year for a new fleet of satellites for American Telephone & Telegraph, whose current Telstar system was built by Hughes, according to Hughes Vice President Steven Dorfman.

In one notable loss this year, the International Telecommunications Satellite Organization selected Ford Aerospace over Hughes for its next generation of satellites.

Although Hughes is building current Intelsat satellites, “We didn’t expect to win Intelsat and weren’t surprised or disappointed,” Dorfman said.

Hughes has sold 32 of its low power HS 376 satellites, sometimes described as the Volkswagen of communications satellites because of its reliability and low cost. In addition, the firm has a growing military satellite business.

The communications satellite for the Navy will be a derivative of the the HS 601, the most powerful Hughes communications satellite.

The satellite will be more than 60 feet long, about the length of a six-story building, and weigh 2,300 pounds, roughly the weight of a compact car.