Posted: Mon, Sep 15, 2003, 11:05 AM ET (1505 GMT)
Boeing Satellite Systems could face up to $1 billion in liability claims because of defects with satellites built by the company, the Wall Street Journal reported Monday. Satellite insurers, meeting at an industry conference in Paris last week, told the Journal that they are considering filing claims against the company for problems with solar concentrators on early Boeing 702 spacecraft. Six of the first 702 spacecraft suffered degradation of the concentrators, which shine additional sunlight on solar panels, causing the spacecraft to lose power faster than planned. Among the spacecraft affected are the two XM Satellite Radio spacecraft as well as the first Thuraya satellite; a second Thuraya spacecraft was launched earlier this year in part to deal with the power problems. The operators of those satellites have filed claims with their insurers, leading the insurers to consider taking action against Boeing to recoup their losses. The insurers are negotiating with Boeing to try and work out a compromise, but if nothing can be worked out by the end of the year legal action, never before taken by insurers against a satellite manufacturer, may follow.

Related Links:

•  Wall Street Journal article (subscription required)
•  Dow Jones article
•  Reuters article