Satellite launchings from China could revive Palmdale company.

Satellite launchings from China could revive Palmdale company

Scott Science and Technology expects $90 million deal

Palmdale-based Scott Science and Technology Inc. announced this month that it has signed a letter of intent to oversee the launching of two satellites for Naples, Fla.-based Dominion Video Satellite Inc.

If the $90 million deal goes through, it will represent the first revenue generated by Scott since 1985. The company, which handles all arrangements needed to get commercial satellites into orbit, had been exclusively focused on providing services to the space shuttle program.

But the company's business went up in smoke when NASA declared -- following the January 1986 Challenger explosion -- that the shuttle program would be indefinitely suspended and, once revived, would preclude the delivery of commercial satellites into space.

"We had to re-adjust and found we could adapt our services to any expendable launch vehicle," said David R. Scott, president of Scott Science and Technology.

If Scott's deal with Dominion goes through, Dominion's two satellites -- which have already been constructed by General Electric Co. -- will be delivered to Scott's Palmdale facility.

Scott will then conduct its "turn-key launch system," which includes purchasing launch vehicles, arranging for insurance, conducting safety and operation checks on the satellites and vehicles, transporting the satellites and vehicles to the launch site, overseeing the launch, and operating the satellite for its first 90 days in orbit to make sure everything is functioning properly.

Operation of the satellite would then be turned over to Dominion, Scott said.

The Florida company plans to launch the first satellite between July and August of 1989, and the second in the spring of 1990.

Scott last week refused to disclose the net income his company is expecting from the deal but said, "Our margin is typical of others in the business."

The company lost $1.2 million in fiscal year 1987 and lost $1 million in

fiscal year 1986, Scott said. Its nearly 16 million shares of stock are trading for 10 cents to 20 cents.

If the Dominion deal is consummated, Scott said he does not expect to add many employees to his payroll.

"We have five employees now and never intend to have more than 12," he said.

Dominion's high-powered satellites, if launched on schedule, will be the first to transmit TV signals strong enough to be directly received by inexpensive, home-receiving dishes with 12-inch diameters, according to a company statement. Current satellite TV transmissions require much larger, more expensive receiving dishes.

Another noteworthy aspect of Scott's tentative agreement with Dominion is Scott's plan to use a Chinese-manufactured Long March launch vehicle to propel the satellites into orbit. The Reagan Administration just this year approved the export of U.S. manufactured satellites for such a launch in the People's Republic of China.

Scott said the opening of China as a possible launch site should increase his company's business opportunities, as should the current backlog of commercial satellites waiting to be launched in the United States. This backlog is the result of the two-year hiatus in the U.S. space program.

"Communications companies aren't schooled in the art of launching, insurance, engineering and all the other things that go into a launch," Scott said. "And why should they be? The launch process takes only about 90 days, while the life of the satellite is eight to 10 years."

Scott said most communications companies find it more cost effective to hire a company such as his to handle the 90-day launch process. In this way, they can avoid having to develop expertise in an area that plays a very minor role in their overall operations, he said.

PHOTO : Long March rocket: Scott aims to use Chinese-built vehicle to boost satellites