Boeing's El Segundo division gets big satellite deal with Mexico

The $1-billion contract provides an upgraded satellite communications system for the Mexican government that includes three satellites - two of which will be built locally and one of which will be purchased by Boeing rival Orbital Sciences (an unusual arrangement). From the WSJ:

Since the early 1990s, Boeing has sought to keep its Southern California satellite factory filled by relying on larger, more-capable satellites for both commercial and U.S. government customers. But some of its advanced designs and manufacturing processes initially turned out to have technical glitches, even as large commercial satellite-operators were turning toward simpler, less-expensive models. The result, according to industry officials, was that often Boeing couldn't compete effectively with Orbital or other U.S. and European rivals for commercial-satellite orders.

More recently, the military-satellite market has been depressed by budget pressures and congressional skepticism about ambitious Pentagon plans for next-generation communications links. Long-standing Pentagon development efforts have been scrapped or put on hold indefinitely, and the U.S. military in the next few years isn't expected to have funds to start any big new communications satellite programs.

Boeing has 5,500 employees in the El Segundo area, and while the contract won't necessarily add jobs, a Boeing executive said it's expected to preserve current positions (via Business Journal).