The discussion revolves around the privatization of the space company Beyond Gravity, highlighting the advocacy from the National Council for it to remain federally owned. Since taking charge in 2021, significant financial losses under the previous parent company, Ruag International, prompted a shift towards privatization. The article details the transformation of the company, its strategic focus on the space industry, and the successful contracts secured, including a major deal with Amazon. Concerns over the National Council’s recent motions and the implications for the company’s future, workforce, and technological leadership are also examined, alongside the potential for privatization to ensure sustained growth and investment in a rapidly evolving market.
Understanding the Shift Towards Privatization of Beyond Gravity
Mr. Wall, the National Council is advocating for the space company Beyond Gravity to stay under federal ownership. However, your role since 2021 was to transition it away from its previous parent company, Ruag International. Can you share what the landscape looked like at that time?
Upon my appointment, I was tasked with crafting a privatization strategy within a hundred days. Engaging with numerous employees revealed that Ruag International faced a staggering loss of 224 million francs that year. The then-Finance Minister, Ueli Maurer, emphasized that imposing such losses on taxpayers was untenable, especially given the company’s global presence from Australia to Malaysia. Furthermore, the federal government was dealing with numerous complaints from international clients.
Transforming Challenges into Opportunities
Was it challenging to address the financial deficits?
Indeed, the transformation posed significant hurdles. However, leveraging the outstanding expertise within the company allowed us to reverse our fortunes. Remarkably, just a year later, we achieved a profit of 70 million francs.
How did Ruag International evolve into the Beyond Gravity we know today?
The space sector showcased the most substantial growth potential, primarily as our key client at the time was still the European Space Agency. Thus, it became apparent that the first step was to privatize the defense and aviation sectors, allowing us to concentrate our long-term strategy on the burgeoning space industry.
Since then, you’ve expanded your customer base and secured major contracts, including those for Amazon’s Kuiper satellite network. What was your strategy for this success?
We needed to shift the perception of our company from a stagnant state enterprise to a dynamic startup, despite our 40-year history. This change in mindset, coupled with our rebranding to Beyond Gravity, enabled us to strengthen our foothold in the American market, which operates with a vastly different dynamic than Europe.
What is the current order volume from Amazon?
Amazon plans to launch 3,236 satellites into orbit using our dispenser systems and payload fairings, potentially generating revenue in the mid-three-digit million range. To manage these substantial orders, we have also established two new factories in Sweden and the USA.
The space industry is experiencing remarkable growth. What is the current market growth rate?
Currently, the market is growing at a rate of 15 to 20 percent. It is difficult to find any other industry segment that matches the dynamism of the space sector.
What level of investment will be necessary in the coming years to keep pace with this expansion?
To maintain our technological leadership, we anticipate needing to invest around half a billion francs.
However, the National Council has recently expressed a desire to keep Beyond Gravity under federal control. In September, they approved a related motion, which will be voted on by the Council of States in December. Did this come as a surprise to you?
Yes, it was unexpected. Prior to initiating the privatization process this year, which entails costs amounting to several million, I consulted with the Federal Council back in November 2023. Since then, there haven’t been any geopolitical developments that would warrant such a reassessment.
Can you shed light on why many parliamentarians are suddenly interested in the space sector?
I understand that the Ukraine conflict has heightened awareness among security policymakers regarding space. However, this concern does not pertain to Beyond Gravity. Those familiar with our capabilities recognize that we do not possess security-sensitive technologies nor provide relevant data. Following our unbundling, our focus has strictly been on the commercial market, with military requirements being addressed by Ruag MRO.
The Security Policy Commission of the Council of States has also recommended accepting the motion. Are you actively lobbying the Council of States for privatization?
Yes, together with Christoph Mäder, President of Economiesuisse, and Stefan Brupbacher, Director of Swissmem, I recently shared our position in a personalized letter to each member of the Council of States. This letter advocates for the privatization of Beyond Gravity, emphasizing the need to preserve a leading company in the space sector for Switzerland. We firmly believe that the state can release Beyond Gravity with confidence and valid reasoning.
What points do you emphasize in your arguments?
We argue that the federal government lacks the financial resources for the necessary investments and certainly does not want to shoulder the risks associated with an enterprise that conducts over 95 percent of its business abroad. Moreover, Beyond Gravity holds no significance in terms of security policy for Switzerland.
Is this assertion accurate?
We do not manufacture military systems; our focus is solely on civil spaceflight. As a provider of components integrated into other companies’ systems, we cannot create our own satellites. While we assist with information and studies when possible, these requests occupy at most two employees. What about the other 1,598 employees and our customers? In our correspondence, we pointed out that the federal government could impose extensive conditions on any buyer of Beyond Gravity to safeguard Switzerland’s interests.
What types of conditions are you referring to?
Conditions could include a guarantee that the company’s headquarters will remain in Switzerland for the next ten years, that existing jobs will be preserved, and that technology development continues in Switzerland. Additionally, commitments to support Swiss space interests could be included in such agreements.
Do you believe your letter will achieve the desired impact?
I am optimistic that the small chamber will appreciate our arguments. This discussion isn’t solely about the regulatory implications of keeping Beyond Gravity in state ownership, but also about the potential negative consequences for our company and its workforce.
What kind of negative consequences are you anticipating?
In addition to insufficient investments, we would likely face years of paralysis. The legal framework in Switzerland lacks the necessary provisions to maintain a company like Beyond Gravity under federal control. If the Federal Council is required to establish these first, as the motion suggests, it could take three to four years.
That timeframe seems manageable.
In the rapidly evolving space market, that duration would feel like an eternity, causing us to lose touch completely. Such stagnation would jeopardize our know-how, market share, and potentially our technological leadership. Many jobs in Switzerland—especially in engineering and production—are directly linked to our ability to thrive in the international commercial market. Halting the planned privatization would therefore threaten Swiss employment.
Why is a sale the only option? Could an IPO be considered?
In theory, yes, but preparing for an IPO would also take two to three years. We cannot afford that time; immediate investments are crucial as the space sector is evolving swiftly. We face intensified competition, increasing cost pressures, and shorter production cycles. To navigate this landscape successfully, we require entrepreneurial agility, prompt decision-making, and capital.
Do you foresee numerous acquisition offers?
Absolutely, and we expect interest from across the Western world