LockMart Sort Of Threatens to Kill ULA Over RD-180 Imports
Lockheed says rocket launch venture hinges on U.S. law waiver
“Lockheed Martin Corp issued a warning on Sunday over the viability of its rocket launch joint venture with Boeing Co, saying the venture urgently needed the United States to waive a law banning the use of Russian engines to launch military and spy satellites. Rick Ambrose, who heads Lockheed’s space business, told Reuters in an interview that concerns about the United Launch Alliance (ULA) venture’s prospects had prompted the partners to approve funding for its new U.S.-powered Vulcan rocket only one quarter at time.”
So, the company that used to be in it for “the long haul” is now only in it for the next quarter, depending on what the government decides about letting it buy more Russian RD-180 engines? Oh, how the mighty have fallen.
Viability requires (1) OEMing a cheap import, (2) monopoly protection, and (3) a one billion dollar annual retainer? Three strikes. You’re out.
And the second (inevitable) shoe drops. So predictable. Next up-the DoD asking for more money to re-manifest everything possible onto Delta’s (wink, wink, with transfer funds to Atlas redesign, so in practice LockMart never has to invest anything in NET on Vulcan and wink, wink, a few crumbs to SpaceX for good show).
Or…I don’t know…they could try to compete in the open marketplace. That might include scratch-building their own engine. They’ve done this kind of thing before, right? Isn’t their “experience” supposed to be one of their selling points?
No, Lockheed, Boeing and ULA don’t build engines. Aerojet (Titan), Rocketdyne (Atlas and Delta), and Pratt & Whitney (Centaur) built their engines prior to their buying RD-180 from Russia. They’ve contracted with Blue Origin to build engines for Vulcan. Congress and the DoD seem to be meddling and want them to buy a Rocketdyne engine instead.
Neither Lockheed Martin or Boeing have a capacity to make their own engines at any point in the space age. The current US large liquid fuel engine manufacturers are Aerojet Rocketdyne (RS-68,RS-25?), Blue Origin (BE-4) & SpaceX (Merlin, Raptor?).
At the dawn of the automotive age didn’t Ford and GM make their own engines??
Who used to own Rocketdyne?
And now the same company that owns Rcoketdyne owns Aerojet.
Poor planning on your part should not constitute an emergency on my part. Also, could talk about eggs in one basket. Cliche but true.
Boeing did acquire Rocketdyne as part of their takeover of Rockwell International in the late 90s. They quickly sold it off to United Technologies to avoid the legacy costs and partly leverage their takeover of Rockwell International. Boeing didn’t appear to be keeping Rocketdyne from the start of the takeover.
Not too long ago Boeing owned Rocketdyne. Apparently they did not generate enough cash after Shuttle was shut down, so Boeing sold them off.
I feel sorry for ULA. You don’t get to pick your parents.
I think they are not quite as innocent as that. There’s been bad business all along the line, bad decisions by USAF, and some bad faith too, it seems to me.
So, it’s “prudent” for them to proceed cautiously because of growing competition? Wouldn’t growing competition dictate that they agressively pursue more competitive designs, not reluctantly nibble off little bits of innovation? How can ULA effectively design and manufacture a new and competitive launch system if the participants (and suppliers) never know if the project will still be there in the next quarter?
Vulcan comes across as being all show and no substance, framed like this. If it’s meant to be a tool to scare Congress into letting them buy more Russian engines, I believe Senator McCain will let them know how successful that tactic is likely to be.
(an aside: I find myself wondering whether they will be holding their breath and stamping their feet, too…)
Lockheed Martin threaten US Congress if they don’t get waiver for RD-180 Russian Rocket Engines ban for the Atlas V Rocket or ULA dead. IF I were John McCain I tell them to to take a hike no deal. I think Lockheed Martin&Boeing Company too lazy to fully fund Vulcan Rocket that they promise to develop by 2019 to compete against SpaceX Falcon 9 V1.2 This Summer day view on SES 9 Launch.
Laughing at LockMart. The definition of mediocrity.
Not a brilliant move, on Lockmart’s part, to threaten (even by implication) the U.S. Congress, and paint the DOD into a corner, when the LRS-B contract award is about to go down. I am sure the folks at Northrup Grumman approve of Lockmart’s latest gaffe.
This is nothing more than the military industrial complex protecting “their turf”. This is also why Boeing and LockMart are really fighting all of the commercial efforts.
Mommy and Daddy are pissed because the kid is leaving home. While free internet, WoW, and healthcare is enticing to most – the over achievers want to do more in life.
When the feds agreed to let lockmart use the rd-180 it was with the stipulation that there would US production of the engine. Afterwards LM got a waiver because a 2 year stockpile of engines would be created and the various delta 4s would provide the backup. So ULA cancels the d4 medium and now threatens the US.
I can’t wait for the falcon heavy.
I think (emphasis on *think*) the language in your first sentence needs tweaking.
My understanding is the government requested (more than *agreed*) that LockMart to use the RD-180 to keep the engineers and technicians with RD-180 know-how busy supplying engines to the “good guys”. There was the possibility of domestic production, which I believe would have been an agreement between then-Rocketdyne (not LockMart) and Energomash, but production abroad was considered beneficial because it ensured that the established RD-180 infrastructure wouldn’t fall into the wrong hands.
The original DoD FSU at the start of the eelv program required co-production within 4 years
That was only a requirement if Lockheed-Martin won the EELV contract entirely. Winning 40% of the contract didn’t justify a US production line and having Delta around meant the DoD didn’t insist upon it. Boeing got caught with its hand in the cookie jar and the percentages were reversed later, but the deal was done.
Oh brother. (We really need an emoticon to indicate rolling one’s eyes….)
ULA stated it could not justify the “business case” of developing the RD-180 production capability, and the Delta
IV could provide “assured access to space.” This decision came after “hundreds of millions of dollars” of spending, funds that would later be billed to the Government according to a DOD Cost Analysis
Improvement Group report.
Actually Pratt and Whitney still holds the license to domestically produce the RD-180. It expires in 2022.
An option that should have been exercised 20 years ago.
Ever read the “RD-180 Availability Risk Mitigation Study”? It has a nice timeline of the RD-180.
You outta see how far Russia’s technological skills have dropped.
Although, their space industry makes very good diamond-encrusted cars.
http://gizmodo.com/these-ar…
Those aren’t even the worst pics.
That’s pathetic too.
Lockheed and Boeing would not want to cut dividend payments to shareholders in order to compete. Not if it is cheaper to buy votes for a million a pop.
Congress could allocate $1B to the Air Force Research Lab to develop a high performance LOX-RP staged combustion engine and let them run the procurement and pick the vendors. But AFRL is not allowed to hire lobbyists or make campaign contributions so congress doesn’t listen to them.
In this day and age, companies should not need large amounts of government money to develop new rocket engines. Neither SpaceX nor Blue Origin has structured their businesses to require this sort of government money, up front, to fund development. Why should Aerojet-Rockedyne be any different? With their track record, certainly they should be able to attract investors for development of new engines.
Nobody is going to advance Aerojet-Rockedyne the capital for an engine development when congress could turn RD-180 purchases back on at any moment.
From what I read, the reason NASA wants to have this so called commercial crew thing is that people at the top think sending humans to LEO is so easy and technologically backward that it’s not worth NASA’s time. They want someone else to do this taxi job so NASA can focus on more important things such as sending people to some unknown asteroid. The problem is that there is no taxi available and they need to create a taxi fleet first. It’s not totally stupid if space launch is indeed a lucrative business, with NASA’s technological help and private investment, the fleet can be built quickly. However, it does not seem so, because NASA not only need to share technological know-how, they also need to pay for making taxi cabs so astronauts from NASA can ride on.
Currently,I heard there are two players in this game, run with completely different philosophies. One is an old military contractor which focus entirely on the bottom line in its quarterly report, without such focus it will be punished by it’s share holders. To achieve profitability it decides to use the cheapest reliable components on the market. Unfortunately clueless politicians think it is traitorous to ride in cabs with Japanese engines. Unable to make profit by designing a new engine, this company wants out. The other player is a dotcom company which only interested in some kind of domination. It can afford to lose money as long as it can drive the other guy out and keep the media crazy about it everyday, it’s stock will rise. The end game for the owner of this latter company is not to become a reliable service provider but to sell the company to someone more ambitious and with a deeper pocket (I am talking about you google!) at an inflated rate, just like what he did before.
As a spectator I find the unfolding of this history very entertaining.
Do you actually have any actual evidence that SpaceX is selling launches for less than cost? You would think that if this were the case, it would have come up during the air forces uncomfortably thorough examination of the company during certification.
SpaceX has a very innovative way in accounting. Look under the hood.
Ahh, so you’re just making stuff up then. Carry on
Since you seem to have such exclusive insight into SpaceX’s finances, perhaps you could be bothered to cite your sources.
It’s your accusation. You either have proof or you don’t. No one else has to prove what you allege.
Oh, come ON! The denizens here are a very tough crowd.
If you have specific knowledge about accounting at SpaceX, spit it out. I try to follow the space industry, though not as closely as many here.
Spacex has stated directly that they have been profitable since 2009. If you claim that they are liars it is your responsibility to document your accusation or withdraw it.
“a dotcom company which only interested in some kind of domination”
An interesting Weltanschauung, as our German friends say.
The first innovation this great guy came up with is a financial service company which is so smartly structured that the government can’t touch it not to say regulating it. It can screw its users anyway it wants with its monopoly and lack of oversight. Given this track record I am not so sure he will behave any differently.
Ah. The picture starts to clear. Mr. Einstein has had a run-in with paypal at some point.
The only flaws with that argument are:
-SpaceX doesn’t trade in public options. Therefore, no stock to rise, it is 100% privately owned with Musk holding a controlling interest.
-ULA buys no “Japanese engines”. Tough Japan does make some rocket engines, they are strictly for their indigenous launcher, the H-2, a kind of miniature Arianne V. They do buy RD-180s, but that is more for political and historical reasons other than cost.
-None of the Vulcan components are available “in the open market”. The main engine really chosen yet, never mind test-fired. The whole rocket has a big development road ahead of it. Not like, say, Orbital’s Antares, which will fly with Russian engines, Ukrainian tanks, and a repurposed american solid stage on top, later this year.
-ULA makes a fixed profit on each launch as a percentage of the total cost. Hence why they have always been said to push the costs higher than they need to, the traditional “cost-plus” contracts used in aerospace.
-That contracting difference (going to a fixed price per service instead of a cost-plus with a lot of management overhead) is the main real difference between COTS and Commercial Crew, and the kind of contracts the EELV line has lived off of. On the face of the success of COTS, it seems like a good idea, and if you don’t believe go check out what the ATV program cost ESA.
So yeah, a lot of things wrong on that one. Might want to check your facts a bit?
DId anyone say stocks have to be publicly traded??? LOL
One correction to: ULA makes a fixed profit on each launch as a percentage of the total cost.
Nope. DoD and NASA use a cost + award fee model, and have for years. If costs exceed the pre-negotiated amounts, it will lower the award fee. If deliveries are late, it will lower the award fee. If there are quality problems, it will lower the award fee. If the government changes requirements, it can result in a changed cost and the contractor isn’t penalized. If the contractor can figure out how to reduce costs, they often get a part of that as a bonus to the award fee, as long as the auditors don’t think they padded the original cost basis.
Go back to working on the Unified Field Theory, Einstein. You certainly have a right to believe human space exploration is foolish, but I doubt you are going to get much traction with that in this venue.
You have to wonder how long ULA’s parent organisations can afford to keep doubling down before they have to fold.
Seems to me this whole fiasco goes back to the days when Boeing absorbed Rocketdyne as part of North American Rockewell, and then spun it off to P&W. Rocketdyne was a major US asset, critical to civil and defense space. Somehow the obligation to keep that asset together and healthy seems to got lost long before it was reduced to a department of “GenCorp”….
Rocketdyne was in trouble from the time Pratt & Whitney won the Shuttle Main Engine upgrade program in the ’90s.
At this point the outfit that has the most practical knowledge in designing and producing liquid propellent rocket engines is clearly SpaceX. Like it or not, they have become a national asset. They have flown 180 Merlin’s on the Falcon 9 (counting both first and second stages) with just one serious engine failure early in the program.
I think it would be a wise business decision for SpaceX (as well as a civic gift to America) for them to build on that base and expand it: First by offering Merlins (at a decent markup) to all comers in the US, second by working on them to make them fully competitive, performance wise, with the RD-180 and all other LOX/RP1 competitors, and third by continuing with their development of other propellant combinations, notably LNG, and eventually breaking into LOX/LH2 for upper stage use, where that would give a big gain in payload capability.
(Contrary to some other refs, SpaceX’s web site claims the Merlin 1D has a sea level Isp of 311s, and “~340s?” in vacuum; see also http://www.reddit.com/r/spa… Merlin’s high thrust/weight ratio is also a consideration)
People talk about the “complexity” of clustering engines to achieve higher thrust, without mentioning the advantages in high volume production efficiency, reliability, and engine-out capability. I think their big booster designs should stick with enough clustering to give them engine-out capability before flying higher thrust engines, sexy as they are.
They really might consider trying to buy out the RL10 (? does “GenCorp” really care about it?), develop a cheaper, still reliable version, and cluster it, to remove the vulnerability of their second stages on Falcon 9 to an engine failure, which currently seems to dominate the mission failure risk.
Cool ideas
Retweet 🙂
Doesn’t solve the single supplier problem.
Well I would hope the Air Force would do the responsible thing and use the remaining RD 180 engines in question to launch those DOD satellites that the Falcon 9 cannot launch. Then award those launches we don’t have engines for to the Falcon 9. That assumes Spacex can ramp up production to meet the additional demand. After the existing supply of engines for the Atlas 5 are gone you can use the Delta 4, and depending on the timing maybe the Falcon Heavy, to fill any launch capability gap. If I have this right The Air Force meets its requirements, United States continues to stand with Europe on the Russian sanctions, UAL continues for now to get its a”launch capability” dollars so no impact to employment. Heck, the savings to the Air Force using the Falcon 9 may even pay the difference in using the Delta 4 instead of the Atlas 5 after the supply of existing engines runs out. And of course theres alway the risk that Russia takes the new engine order but does not fulfill it when it comes time to deliver. That would really put the Air Force in a spot. This seems to easy, where am I wrong?
While most space companies are trying to scramble to make more engines. SPACEX has a market already to make less!!!