Twelve weeks ago I stepped into the role of CEO at Maxar at a challenging time for the company. We had just lost our newest imaging satellite to an on-orbit component failure, the future of our satellite manufacturing business was undecided, and our stock price had suffered during the past 12 months. Despite those challenges, I believe more strongly than ever that Maxar holds a truly unique position in our industry, with a world-class team, integrated space capabilities and a decades-long track record of serving the critical missions of our government and commercial customers around the world.
This belief comes from my experience in several leadership roles at DigitalGlobe, most recently president, where I got to see first-hand the difference our satellite imagery data and analytics capabilities make for our customers and how much more value we could provide to them with complementary capabilities offered by the other Maxar businesses. For example, some of our international government customers would like to own and operate their own high-resolution imaging satellite, but the cost to build the global tasking, processing, exploitation and dissemination systems to support that satellite is very high. With our Legion X program, these customers can tap into our Space Solutions group’s decades of commercial satellite manufacturing experience and our existing global ground infrastructure to obtain these capabilities more cost effectively than ever before.
So for the last three months we’ve been moving at high velocity to make decisions that unlock the value that lies within Maxar. We made the decision to retain and restructure our satellite manufacturing organization, to make it leaner and more nimble, and to take advantage of the long-term strategic opportunities available to us as a US-headquartered company. We commenced a review of alternatives to deleverage the balance sheet. We cut the shareholder dividend to preserve cash. We undertook a careful review of innovative satellite programs like RSGS, to ensure that we are making the best use of our capital. Finally, we filed a claim for the WorldView-4 insurance proceeds, which we expect our insurance underwriters to accept this quarter and deliver payment within 30 days of that acceptance.
Maxar’s organizational structure also needed to be addressed. We were operating as four independent business units, and our customers and our employees identified as members of our original businesses, which kept us siloed. Those barriers prevented us from achieving our potential as a unified company. I firmly believe the thesis of the value unlock that could be created by our businesses coming together in 2017 still stands, but we weren’t organized in a way to realize that value. Now we are. In February we restructured the company to become one Maxar. This creates strong strategic focus and alignment, unlocks integrated solutions that our customers need, strengthens customer intimacy and will allow us to reduce operating costs by almost $60 million this year.
By simplifying the organization and giving leaders direct authority and accountability, we enable faster innovation and are better able to serve customers, which are essential for better financial performance and growing our business. Maxar is now structured by business functions:
- Tony Frazier leads Global Field Operations, with responsibility for all sales, business development, account management and service delivery across our combined national security and commercial customer base.
- Jeff Culwell leads our Product organization that develops and manages our combined imagery, information and analytics portfolio.
- Megan Fitzgerald leads Space Solutions, leading the teams that engineer, design and manufacture our dual spacecraft product lines, the 1300 class platform and the Legion-class platform, for both commercial and U.S. government markets.
- Jeff Robertson leads Internal Operations, which includes satellite and mission operations, product operations and Maxar-wide enterprise technology and cybersecurity.
- Mike Greenley continues to lead MDA, which remains an independent business unit due to the unique requirements of being a trusted partner to the Canadian government and a merchant supplier to the international satellite industry.
- DigitalGlobe’s founder, Dr. Walter Scott, continues to lead technology innovation as CTO.
- The Corporate functional leaders are Biggs Porter (CFO), Jim Lee (General Counsel), Andrea Bortner (Human Resources), Nancy Coleman (Marketing & Communications), Randy Lynch (Finance & Corporate Development), and Jason Gursky (Investor Relations).
This new operating structure will allow us to deliver on our strategic priorities and serve our customers with more integrated offerings in our two focus areas: Earth Intelligence and Space Solutions.
As a leadership team, we know we have a lot of work to do. We are well along in resolving key challenges, we have a clear sense of urgency and direction, and we are committed to a strategy that aims to bolster Maxar’s position as an industry leader.
We are focused on disciplined capital prioritization, serving our customers and partners and delivering value to our shareholders. We will deliver on our promise to reduce our total leverage and achieve a more suitable capital structure. Under our new operating model, we will create a leading-edge, collaborative work environment that allows our team members to do the best, most challenging and exciting work of their careers. As one Maxar, we will succeed in doing these things together, and we will fulfill our purpose of Building a Better World.