More Double Talk From Mike Griffin
Former NASA administrator Mike Griffin throws cold water on commercial space market, then offers solution, Huntsville Times
“Griffin, a persistent critic of President Obama’s space program, said the current system consists of companies such as SpaceX operating with “government as their venture capitalist.”
For NASA Administrator, This Mission Is a Tad Personal, Washington Post (2009)
“Griffin’s press secretary, David Mould, told the Associated Press that Griffin isn’t campaigning and expects the incoming president to name a new administrator. But Griffin would be “honored” to be asked to stay on, Mould said. “A lot of people seem to like and support Mike and think he’s doing a good job,” he said.”
Keith’s note: Why would Mike Griffin be “honored” to have been Obama’s choice if he is so against what President Obama is doing i.e. continuing – and expanding upon – the pro-commercial (pro-business) space policies started under the Bush II Administration? Indeed, Mike Griffin personally signed a number of these agreements. Baffling.
Please. Stop. STOP calling it “commercial space.” It’s a propaganda term, plain and simple. SpaceX is a government contractor and would fold without government dollars. In this respect, they are no different than Lockheed Martin. Have they done more with their government dollars than Lockheed Martin or Boeing? Sure, and that’s too their credit. But please. The only long term paradigm shift in effect is a redirection of government pork from districts in Houston, Alabama, and Florida to districts in California.
BS.
SpaceX got started without government dollars and at this point, could survive without government contracts, based upon its current flight manifest for commercial comsat launches.
Cut ULA’s government manifest, and ULA would go away, plain and simple.
So yes, there’s a BIG difference, both in terms of how the companies operate and in terms of revenues outside of Uncle Sugar.
The only people who try to throw up the whole “We’re all commercial”/We’re all government contractors are typically the ones most dependent upon government contracting.
According to http://www.spacex.com/launc…, you are an idiot. Government dollars helped speed things up, but they would have got to where they are eventually.
There’s a battle going on between two ways for NASA to spend money. The old way is to have big organizations within NASA do a lot of the detailed decision making and pay some private companies on a cost-plus basis to do what NASA has decided.
The new way is to have NASA set the high-level goals and let out the work on the open market, for any private companies to bid on, then get paid only for what they deliver, based on the prices the companies agreed on in their bids.
The companies that work for NASA in this new way can also shop their same services out to private customers.
From the point of view of the companies providing the services, NASA is just another customer, and is buying from them as any other organization would buy from them. That’s what makes “commercial space” such a good term for this. It works exactly the same way whether the customer is NASA or anyone else. SpaceX, for example, is a commercial space company that has NASA, the Air Force, and various other national space agencies and private companies as customers. That’s very different from, say ATK building SRBs for SLS on a cost-plus basis. There is no market economics at all involved in the ATK deal for SLS boosters.
“Please. Stop. STOP calling it “commercial space.” […] SpaceX is a government contractor”
No, they are a government supplier. There’s a difference between a company that, for example, sells the government boxes of HB pencils that meets their needs, versus a company that bids for a contract to design for the government a wooden-based graphite-to-paper delivery mechanism.
The companies that are working on SLS/Orion/etc are all in the latter category. The companies doing CRS and Commercial-Crew are in the former. It’s an important distinction, given the potential cost savings for the US tax-payer and the leveraging of NASA’s capabilities in space, and they deserve different names. People have tried “Old Space” versus “New Space”, but that doesn’t work because there’s nothing stopping Old Space from competing in the new arena. So “Cost Plus” versus “Fixed Price”, but that’s a slightly different argument and confuses things more.
So we’ve kind of settled on “Arsenal space” versus “Commercial space”. Come up with something better, or just suck it up like a big boy. Because pretending there’s no difference… that’s the real propaganda being sprayed around by the pork mongers.
Mike Griffin is a shameless hypocrite.
Stop the press!
Actually an interesting read. I agree with Griffin about establishing a permanent lunar base. This makes more sense than LEO space stations. It also offers resource, raw materials, for living off of.
“This makes more sense…“
jski,
Wouldn’t that depend entirely on what your long-term goals are?
Yep, simple, my goal is a permanent human presence off earth.
You have my vote. Except that I’d say a permanent, healthy, expanding human presence.
“a permanent lunar base. […] It also offers resource, raw materials, for living off of.”
In theory. The problem is that (with some exceptions such as the ISRU camp) the “Lunar lobby” at NASA never actually gets around to all that stuff. Plans are inevitably about establishing the base, not utilising resources. Kind of like building a launcher when you don’t know what your target is. Building a base without any purpose other than it meeting the goal of being a “lunar base”.
Asteroid missions have the same risk. They’ll be reduced to “going, coming back, bit of science in the middle that robots could have done”, with no real benefit because there’s no real purpose for them other than the stated goal of going and coming back.
Apollo suffered the same problem. No purpose other than The Purpose.
[From below/above: “my goal is a permanent human presence off earth.”
Define “presence”. Is ISS a permanent human presence in LEO? Is a six man science base on the lunar equator sufficient to meet your goal?]
OK, no one mention the positive cash flow or the more than $1 billion backlog manifested over at Hawthorne. We don’t want Mr Griffin to have to improvise some new definition of “significant”.
Sounds legit, that non-commercial Space Shuttle fleet had a completely unblemished safety record…oh wait a minute.
Thanks again Mr Griffin, you’re always good for giggle.
“The International Space Station is not a big enough or long-lasting
enough market” for those commercial companies, Griffin said, even if the
station’s life is extended to 2028, as NASA now plans. It wouldn’t be a
good market even if one company could capture it exclusively, he said,
because “the rate of return on investment is unfavorable as opposed to
market alternatives. The wise investor would not put his money into it.”
The depths of Griffin’s delusion always amazes me. Companies are lining up to serve the ISS market. Boeing, SpaceX, ULA, Orbital, and Sierra-Nevada are all actively working with NASA to get in the market. ATK wanted to also, but was rebuffed by NASA. And yet Griffin insists the private sector wouldn’t enter this market.
In fact, Griffin’s contention that the return on investment is unfavorable is completely illogical. The price NASA has to pay is dictated by what it takes to make the return on investment favorable! Remember, NASA isn’t setting the prices here. NASA is putting out requests for bids, then choosing the one or more bids that give it the lowest price for the result it wants. That’s basic microeconomics. The judgement of the suppliers about the return on investment determines the price the consumer (NASA, in this case) needs to pay.
Griffin then goes on to say that setting up a moon base would require logistics that would be ten times the cost of those of the ISS, and claims that somehow scaling by a factor of ten makes it economically viable for commercial companies when the ISS service market isn’t. That’s completely crazy. As with the ISS service market, a lunar base logistics market would work because NASA would put out a request and have companies bid for the work. The price would be determined by what it would take to make it economically viable.
Mike is just so bent on his mega-plans that he sees anything relating to those mega-plans automatically working and everything not relating to his mega-plans as automatically doomed to failure.
“Griffin, a persistent critic of President Obama’s space program,
said the current system consists of companies such as SpaceX operating
with “government as their venture capitalist.”
Griffin should really learn the difference between venture capital and NRE. NRE is a non-recurring engineering cost to develop a product. In the private sector, it’s not uncommon for a customer to pay part or all of the NRE of its supplier if it needs a product for which there are few or no other customers.
For example, I used to work at a chip company where we developed specialized chips for particular customers, with the customer paying the NRE for the specialized chips. They were chips that were only for that customer. The chip company doesn’t want to invest its own money because if the customer changes its mind, the chip company is out all that money. The customer has to pay it because the customer has the power to decide to change its mind and not use the chip.
COTS, CCDev, etc. are all exactly like this. NASA wants a product, but if suppliers develop the product on their own dime and then NASA changes its mind, the suppliers are out all that money with nothing to show for it. So NASA pays a portion of the development costs (the NRE) to show it is serious and reduce the risk for the supplier of having NASA change its mind.
Venture Capital is totally different. That’s where an entity (usually not a customer, though in some cases it can be a customer) pays money in exchange for an equity stake in the company, sharing in both the risk and reward of the entire business. There is only a superficial similarity between VC and NRE — that someone is paying a company and that money helps finance development. Anyone with even a basic understanding of finance shouldn’t confuse the two.
“Griffin, a persistent critic of President Obama’s space program,
said the current system consists of companies such as SpaceX operating
with “government as their venture capitalist.”
Dr. Griffin needs to study history. This is far from the first time that the U.S. government supported the development of a nascent industry. From the monopoly awarded to Robert Fulton for steamship travel on the Hudson river that allowed him to raise the capital to build the world first steamship, to the Pacific Railway Act of 1862 and the Airmail act in this century, the government has acted this way. Venture capital has far too short of an ROI though in this case Musk has raised significant VC capital. The government market that has enabled Musk to do this is in the finest tradition of the American government to support the development of commerce in as yet untested realms.
Dr. Mike may be a good aerospace engineer but his criticism shows that he knows nothing of history.
Mike Grinch
I find Mr. Cowing’s attitude, as well as that of most commenters here, embarrassing, shameful, and almost unbelievably distasteful. Mike Griffin has a well thought-out point. He worked very hard and did a great deal of good during his tenure at NASA, and he is still one of a very small handful of people in the country with the kind of expertise needed to effectively run that agency. You may disagree with him, but attacking his personal integrity, character, intentions, or especially his competence, is simply shockingly petty and disgusting. If a man with the resume of a Mike Griffin can’t speak his mind about issues that trouble him with respect to the space program without being attacked and called terrible names, who can? This whole thread, as well as Mr. Cowing’s inexplicable and completely unnecessary editorializing, is extremely dismaying. If this is what NASA Watch is about, then I’ve got to say “no, thanks”.
I’m sorry but I seem to missed the part where my right to freedom of speech was revoked.
Keith,
As long as you’re being attacked anyhow, let me point out that you used “Mike Griffin” and “Baffling” in the same statement. That is total redundancy.
Steve
“Mike Griffin has a well thought-out point.”
A well thought out position can still be wrong, wrong, wrong.
“He worked very hard….”
Hard work does not equal good results.
“….and did a great deal of good during his tenure at NASA”
That, Sir, is highly debateable, and many do not agree with your opinion of his efforts.
Joseph,
I think you’re going to find yourself very much in the minority with this opinion. Sorry.
I agree with you sir, the 10-12 folks who dominate the posts here on KeithHatesGriffinWatch are definitely not of a like mind with Mr. Stern.
Welcome back!
Deleted bye author to be nice.
I’m puzzled that you apparently don’t wonder about or even think to ask where the venom against Griffin stems from?
If one person calls you an ass, pay no attention. If a hundred tell you the same, a wise man at least checks for the saddle.
Griffin could have explained what national interest is so compelling that taxpayers would pay for a lunar base at ten times the cost of ISS. He did not, and it seems improbable given budget pressure. If we want human spaceflight we need to do it cheaply. Without Griffin its hard to say what would have happened, but it is at least possible that the Shuttle would have been kept in operation another five years, until other human launch systems were operational. It is just not obvious to me what he did that benefits the country.
If SpaceX is getting 90% of it’s money from NASA (which I highly doubt just because Griffin said it), that’s much better than giving them 120% of what the job costs. That is the “old procurement” method. Cost-plus + profit, probably more like 150%.
Why does this site and its following continue to demonize Griffin? After awhile it appears to be personal.
So .. why do you read this website?
You have your lucid moments.
He’s seen as a shill for his old bosses who did their bidding while at NASA in order to push a project idea that he had worked on, punished anyone who criticised the plan, and basically left NASA without any path forward at a time of its greatest crisis since the end of Apollo; then, unlike any other previous director, proceeded to snipe at NASA and the Administration that fired him from the side-lines as a chief lobbyist for one of the worse projects in NASA’s history.
There’s more, but essentially it’s like having the jerk who trashed your car coming back and criticising your attempt at repairs.
[Deleted: Double post.]
Griffin is demonized because he destroyed NASA. He shut down the Shuttle program to an irreversible point before he left. He derailed the replacement architecture by forcing his personal rocket design on the Agency. This rocket was a technical and programmatic disaster, and as a result, NASA human spaceflight is a footnote in history. He is highly educated, but is an extremely poor program manager,and as a result, NASA will be suffering the consequences for decades.
“… Griffin said…in his model, companies would sell services to the government as needed, but would be able to go on without government investment….”
Yea, well I think we’d all love to see that happen in a commercial process-its not a new idea.
“Griffin wants America to build a permanent base on the moon. such a base multiplies the logistical challenges by a factor of 10 over the station…that market is 10 times larger and 10 times longer than the space station”
The US doesn’t seem to be able to handle the existing 1/10th scale ISS and is depending on Europeans, Japanese and Russians to provide virtually all of the required support. The US system Griffin defined that would support ISS, Orion, is so far about ten years behind schedule after being in development for about 7 years.
There’s a lot more scenery in LEO to see than on the moon. Its a thousand times closer, and according to Griffin, ten times less expensive to support, so what is his logic in saying that it would be much easier to support a lunar base than a space station?
Personally I think that with a proper build up strategy you could have both and they would both lead not just to self-supporting infrastructure but an entirely new growth industry and economy. But you have to get beyond the current round of complaining and show people what its going to take to get to the growth stage.