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Commercialization

Has SpaceX Shocked The Launch Industry To Transform?

By Keith Cowing
NASA Watch
September 10, 2015
Filed under , ,
Has SpaceX Shocked The Launch Industry To Transform?

SpaceX Rival ULA May Get Boost In New Space Race, Investors.com
“Aerojet Rocketdyne made the offer, and negotiations are in advanced stages, the Wall Street Journal reported, citing sources. Those sources also said a buyout could enhance ULA leadership and improve funding for its development of U.S.-made rockets. The offer comes as United Launch Alliance is seeking to keep its position as the Pentagon’s top rocket supplier while also grappling with economic sanctions on Russia that threaten ULA’s supply of Russian-made RD-180 engines needed to power its Atlas 5 rocket.”
Jeff Bezos’ rocket engine plans could be snuffed out if this $2B deal goes through
“The problem for Bezos’ Blue Origin is that the Kent-based space company is currently the leading contender to build a new rocket engine, the BE-4, to replace Russian rocket engines that now power the ULA’s Atlas 5 rockets. But California-based Aerojet Rocketdyne, long the nation’s largest builder of rocket engines, badly wanted that contract, and has been fighting to beat out Blue Origin for the deal. So if Aeroject Rocketdyne buys ULA, the company will likely use its own engines on the Atlas 5, and not Blue Origin’s engines.”
Bid for ULA would cap a tumultous 18 months, and shake up the rocket industry, Washington Post
“Ultimately, leveraging of the commercial space market drives down cost to the American taxpayer and improves our military’s resiliency,” said Air Force Secretary Deborah Lee James said in May. All of which may make ULA’s board eager to sellfor the right price.”

NASA Watch founder, Explorers Club Fellow, ex-NASA, Away Teams, Journalist, Space & Astrobiology, Lapsed climber.

35 responses to “Has SpaceX Shocked The Launch Industry To Transform?”

  1. numbers_guy101 says:
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    Yes.

  2. DTARS says:
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    As Goliath grows, this picture seems appropriate.

  3. dbooker says:
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    Don’t understand the title of the Investors.com article “SpaceX Rival ULA May Get Boost In New Space Race” . Boeing and Lockheed have much more money than Aerojet/Rocketdyne to invest in ULA if they decided to. I think a sale to AR would be a death sentence to ULA.

    • Jeff Smith says:
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      It could go one of two ways, but I’m not sure which. Boeing/Lockheed are only in the space business due to history, not because they see them as growth markets. I could see AJR messing it up and wrecking all these companies, or, they would have the laser focus on space launch to make it really work. With space launch prices and margins getting ready to fall, this is what you’d expect from holding companies… sell the unprofitable unit.
      Sad, but true.

      • Jeff2Space says:
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        Part of the reason they don’t see them as growth markets is their lack of vision beyond what they have been doing since the 1960s. It’s this lack of vision that has been holding them back from innovating. Upper management has not invested in R&D, instead being content to keep milking their cash cow of government launches since they were the only company certified for those contracts.

        But, that’s not the case today.

  4. Jeff2Space says:
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    If Aerojet Rocketdyne buys ULA, this would stop a huge part of the industry transformation.

    • Michael Spencer says:
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      How?

      • Jeff2Space says:
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        I consider ULA buying its first stage engines for their new Vulcan launch vehicle from Blue Origin to be a huge part of the industry transformation.

        • Michael Spencer says:
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          Point taken.

        • Patrick Bane says:
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          And by transform, do you mean rely entirely on an unproven company, an unproven engine & unproven reliability. I’m not bashing Blue Origin, I like the endeavor, but it’s all too easy to hop on the bandwagon of new space & disregard the foundations for which the industry was built on – and quite frankly, AR built the rocket engine industry.

          Space launch is hard, just ask Space X & Orbital. Their predecessors went thru the same growing pains too… Those many of you call old space. Nothing in this business is easy, but all too often General Joe Public diminishes the efforts put forth, disregards the people (the companies) that worked so hard at it for all these years. Companies may be about money (SpaceX is, don’t doubt that for a minute), but the people who engineer, who build, who support the space effort in these “old dog” companies have a passion for space. I know firsthand many of them, I know their roots, I know their passion.

          Don’t be so brazen as to suggest that AR isn’t an industry leader who can help evolve the industry, that’s just naive and arrogant. And further, your statement is a conundrum in that ULA itself has been one of the biggest barriers to transformation in the industry, and not until recent is trying to purport a “new space” face. By simply proposing a new space supplier isn’t transformative, it’s public relations in an otherwise sour media. Remember they are supporting AR-1 development; they know better than to put all their eggs in one unproven basket.

          • Jeff2Space says:
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            I am certainly not advocating that ULA put all of their eggs in one basket, because that would leave them in the same situation they’ve currently got with the Russian engines in the Atlas V first stage.

            That said, AR is the backup for Blue Origin, not the primary, for a couple of reasons. Firstly, Blue Origin is several years along in developing their engine, while AR has been sitting on their hands for decades, waiting for the next big government handout before fully developing a next generation LOX/kerosene engine. Secondly, Blue Origin’s engines will almost certainly be cheaper than AR’s, which ULA needs in order to better compete with the likes of SpaceX and possibly regain a bigger share of the global commercial launch market.

            Doing the same thing over and over again in the face of aggressive competition is not a recipe for success. ULA must adapt, or die.

          • Patrick Bane says:
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            I agree, ULA must adapt in a changing environment; however, taking a harsh & unsubstantiated tone against AR shows a degree of ignorance that I am questioning. First – AR is a publicly traded company, large internally funded R&D is atypical in any business on the open market. Second – AR hasn’t been sitting on their hands for decades, that’s just naive. They developed RS-84, a mammoth LOX/RP-1 engine, but the market didn’t manifest to complete the dev. AR-1 development has actually been going on for 6+ years, it bones stems from a variety of internal R&D projects. Thirdly – BE-4 may be ahead of schedule than AR-1, but don’t assume for 1 minute its development cycle would see the same kind of urgency if not an agreement with ULA. And lastly – cheap usually ends in failure in space. Acquisition strategy rests on far more than the cost of an engine, in fact it’s a second if not a third factor when it comes to space propulsion.

            I’m sorry, but your harsh rhetoric just doesn’t hold water, it simply takes on the tone of “new space” junky without a full understanding of the market at whole. I can profer up significant criticism of SpaceX based on their employee turnover, their agregious working hours, their rush to succeed w/o reservation, etc, but the fact is they are carving their own path; one that will yield its own outcomes, as of recent – a major failure, but that’s not to say they don’t succeed. In addition Bezos is known to run his businesses in somewhat the same manner, an insatiable degree of money miser-ness. That, is not a recipe for success on products that see -400 to 6000+ F temps, 10K+ lb pressures, and vacuum environment. But again, I’m not going to belittle his endeavour for space explorations, it’s a different approach from legacy providers. One that has yet to yield predictable outcomes.

            New space rests on the laurels of deep billionaire funded private pocket books, it’s easy to assume if they have been successful in the Internet they can be successful elsewhere… But, space is an entirely different ballgame, an unforgiving playground.

            Old space, always seems to get aligned with the idea of government handouts, some of which rings true, but not on projects that span the scope of multiple administrations, budget cycles and massive human endeavors – w/o govt & private sector collaboration to minimize the extreme financial risks, many of the things we take pride in would not be available to society (Hoover Dam, the interstate system, the Internet, cell phones, satellites, etc).

            So, what I’m saying is get off your “old school” space bash and realize there is a lot more to the equation than a private sector company making “cheap” rockets. It’s a fragile line between cost effective and disastrous. We’re in an environment that is tugging at both ends of the spectrum – 100% reliabilty v low cost, and neither side has proven they can do both, so don’t assume one will do so over the other.

          • Jeff2Space says:
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            Time will tell, but AR’s unsolicited bid to buy ULA is quite telling.

          • Jeff2Space says:
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            Aerojet Rocketdyne Ties AR1 Schedule to Pentagon Funding
            by Mike Gruss — September 16, 2015 – See more at: http://spacenews.com/aeroje

            Again, AR comes across as wanting the US Government to provide the money to develop the AR1.

          • Patrick Bane says:
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            What exactly don’t you understand about how every publicly traded company works? Of course they aren’t going to go full fledge development without a paying customer. That’s how “making money” works. And if a business, any business wants to survive, someone has to pay for the things they do.

            Stop your old space bashing. As I’ve said before, it’s cheap, it’s ignorant and it’s an all too typical story with new space band wagoners. And I like new space!!! But I appreciate that it’s all built on “old space” R&D. AR has more than paid their dues in R&D. Do you actually know anything about AR, how many engines they’ve developed, how many rockets they’ve provided engines, how many people they have help put in space? Do you have any clue? Because all you seem to want to do is bash… Do you work for SpaceX, is that your angle? I don’t get it…

          • Jeff2Space says:
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            AR has a long and storied history of developing rocket engines, but I’m more interested in discussing where the company is planning to go in the future. In recent years, their outward appearance is that of a company which still requires firm contracts, and cash, before finishing development of a new engine.

            Nothing fundamental is stopping AR from developing engines without firm commitments from other companies to buy the AR1 from them. However, I do understand why that’s problematic, which is why they put forth an unsolicited bid to buy ULA. The resulting vertical integration would mean that they would be their own customer for their rocket engines.

            That said, the latest reports are that ULA’s parent companies aren’t at all interested in AR’s unsolicited offer and that they are moving forward with Blue Origin’s BE-4 engine as the baseline first stage engine for Vulcan.

            Also, I understand all “new space” tech is built on the backs of “old space” tech. The SpaceX Merlin engine design is based on NASA’s Fastrac (MC-1 engine). NASA has been developing new tech and allowing the US Aerospace industry to reap the benefit since before it was named NASA.

            But, tech has *never* been the problem with the launch industry in the US. The problem is the business model and the management style. ULA was quite content to “milk” the government billions of dollars a year with its EELV contracts while its engineers published papers about what they would like to include in a next generation ACES upper stage and how they could easily adapt Centaur into an orbital fuel depot. But, the parent companies never funded any of those ideas to completion.

          • Bill Housley says:
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            Patrick–No one doubts the passion of their people, we critics of Old Space criticize the priorities of its corporate mindset…as it is demonstrated by its actions…, not the passions of its workforce.
            Prime example: In the days leading up to the latest Commercial Crew contract awards announcement last year, Boeing announced that if they didn’t get the contract they would cancel the CST-100 project and lay-off the workforce (and I think I recall that they even told us how many folks would lose their jobs). No one was surprised by that, nor did anyone doubt that they would do what they said.
            Sierra Nevada said that they would have to lay-off some folks but would forge ahead without the contract…which is happening. Again, no surprises there given their limited resources vs their high goals.
            SpaceX made no announcement and they didn’t need to. Everyone just knows that Commercial Crew is, for them, simply a means to and end and that not getting that round of CC would have slowed them down, not stopped them, on their march to Mars.
            It’s not an issue of workforce passion, but of where the companys’ sights are set. Old Space has become too comfortable with the status quo and still would prefer that launch costs not drop any decimal points, in fact they may have a survival stake in maintaining those prices. They want to carry NASA to Mars, once NASA is ready to pay the price. Other folks firmly believe that manned space exploration has reached a plateau and cannot progress further under the traditional cost structure or under the watch and vision of the traditional providers…in spite of their experience.
            The result is that the new guys will expand the market for themselves and, in the process, adequately catch-up on the experience in a lot shorter time than the good-old boys gained in their smaller market.
            Everyone who was around during the micro-computer revolution that started in the 70s, and is just now winding down, knows how this game works. One example of that…I once asked a rep from Ashton Tate if their (then) new DBaseV would have a native-code compiler, his email response contained a one-word answer which described their attitude and pretty much predicted the future of their influence over that marketplace. He just said, “Why?”
            That product had problems, but might have survived if they’d advanced their footprint to encompass new vision. Where are they now?

  5. Christopher Miles says:
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    It’s not about the tech.

    Follow the money, the contracts- short and the long term. Who benefits from a potential merger, and for how long? Who gets the bonus, the parachute, the buyout? Bezos is mercurial and tenacious- Would a future ULA really want to be beholden to someone like that for its future engine(s)?

    Also, it may benefit LockMart and Boeing to be out of ULA for Corporate/Enterprise reasons. The tech doesn’t matter- If it did- we would have a host of amazing engines on rockets right now. We don’t. We have tech that feeds the most congressional districts, employs the most retiring congress and NASA people and maybe, just maybe (as an afterthought) gets us back into the manned LEO business.

    Why is this still an issue here? Contractors will do what they have to. Period. Following that, there will be the requisite spin – as if the contractor’s preferred outcome is good for the nation.

    Rinse, repeat.

    • Jeff2Space says:
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      That will continue to work, unless the future brings both SpaceX and Blue Origin certified by the Air Force for launching DOD and NRO payloads and prove to be successful at it. If that future comes to pass, what does Aerojet Rockedyne/ULA do then?

      To put this another way, is it a successful business plan to assume that all start-ups in the field will continue to fail, despite the growing evidence to the contrary?

      • DTARS says:
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        Maybe @torybruno should jump ship and help Jeff build a Big Blue rocket for his engines?

        Isn’t Jeff going to announce he will be building rockets in Florida?

        What’s it cost to build a rocket 770 million?

  6. savuporo says:
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    Look up Betteridge’s law of headlines

  7. Joe Denison says:
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    This is quite a interesting development. According to the Wall Street Journal this is being seriously considered by TPTB at ULA, LM, and Boeing. Then again ULA just put out an agreement with Blue Origin to help increase BE-4 production capacity.

    It will come down to where LM and Boeing see ULA going. If they think SpaceX is going to swamp them and Vulcan won’t be competitive then they will bolt.

    On the other hand if they believe that Vulcan can compete with SpaceX and the remaining Atlas and Delta launches are lucrative enough they will stay in.

    AR is trying to get more rockets to fly with their engines and to outmaneuver Blue Origin. They do have a good argument in the fact that you don’t have to ditch Atlas and go to Vulcan. That said their engine is behind time wise and Blue Origin has a compelling argument for their engine and ULA so far has gone towards the BE-4.

  8. Rune says:
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    What this makes me think about is Boeing, actually. Lockheed-Martin is mostly into defense these days, but Boeing still has a healthy space division (sats, the starliner, even Delta if you stretch things). And if they call the big guns from their mother company, they have the bucks to stop any of this business… or create a third launch service provider of their own. Maybe around Bezos’ engine even.

    They, after all, effectively bought over the Atlas V by forcing the creation of ULA when their Delta couldn’t compete… what will they do this time to keep their share of pork?

    • Daniel Woodard says:
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      I was under the impression that Boeing was forced to hand LM a very attractive deal.

      • Rune says:
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        They had the least competitive launcher, yet they got half of the ownership of ULA, managing half of both rockets. I always assumed that was a win on their part, though I could be mistaken.

        Incidentally, two Boeing executives have already given declarations stating that they are not taking the offer seriously. Who could have guessed! 😉

  9. DTARS says:
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    Well hard to know what tomorrow will bring, but this future looks pretty likely.
    https://youtu.be/a1EB5BQpm7w

  10. achilles03 says:
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    I’m just curious, in what way does SpaceX outperform ULA? I agree with the cost, but just to keep the discussion honest and play devil’s advocate, I don’t see how SpaceX outperforms SpaceX (and I don’t think we’re talking engine Isp).

    ULA:

    1. Has rockets that can lift more payload than SpaceX (LEO, GTO, GEO, etc.)
    2. Launches more rockets per year consistently
    3. Has higher reliability than SpaceX (Atlas and/or Delta vs. Falcon 9.x)

    There are other metrics than just cost that determine ‘performance’, 10 intelligent people might pick 10 different ways to evaluate performance, but I guarantee none of them will chose cost alone…So unless cost is your only metric, in what way(s) does SpaceX outperform ULA?

    • Michael Spencer says:
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      Wouldn’t an intelligent person realize that SpaceX is very likely to bring lower costs and reliability to the table in the coming decades? And FH similarly?

      And that future will deprecate the old war horses in favor of the new kids?

      • cranky_innkeeper says:
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        SpaceX is taking advantage of 50 years of development to create a business model. ULA (and LHM/Boeing) created a business model hand-in-hand with some very deep pockets willing to pay for a lot of risk reduction.

        Those lessons learned, the AF and the NRO are interested in the hot new thing who gives it up for a lot less. A nice case of the early bird getting the worm, but the second mouse getting the cheese.

        The real test will be when SpaceX starts living in FAR 15- land, instead of FAR 12. When you have 8 other subcontractors digging your nuts and making sure they are pristine, costs are going to go up. The question will be how much, and how much ULA can cut costs while looking at SpaceX and telling the AF/NRO, “you let them launch like “this”, but keep making us launch like “THIS”” and see what falls out.

      • Patrick Bane says:
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        Actually, an intelligent person relies on metrics. Ones that are measurable, quantitative and discernable. And right now the count is 100% mission success for ULA, and 1 serviceable failure each from SpaceX & Orbital.

        When it comes to launching rockets, cost reduction & reliabilty is not a certainty, it’s a media catch phrase. Rockets are volatile by nature of design. Part of the cost of reliabilty lies in over scrutinization of parts, systems, and operation.

        There are 3 main factors in running most businesses – cost, quality and timeliness. A successful company can achieve 2 of these repeatedly… A successful rocket company typically only achieves one of these (quality) effectively.

        One thing is certain in space launch – a customer will almost always accept a product/service that is late or overbudget, but they will not tolerate a product/service that fails. It’s innate to the business model, high risk/high value trumps cost & schedule every time.

        So no, I don’t assume that SpaceX will very likely lower cost & increase reliabilty simply by stating they will do so. They’ve stated thus before & failed. Track records speak greater than words. And I’m no fan of ULA.

        • Rune says:
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          Well, how’s this metric for you: market share.

          For decades now, the market has consistently picked the cheap, unreliable Proton, over the Atlas V for the majority of commercial launches. Mostly because for a given cost, you look at how many transponders you can put on orbit, counting insurance costs, and those include the weighted cost of failures.

          Arianne V, with a less-than-100%-but-very-close, has only gotten its big
          market share of recent years because Proton has spent half of them
          grounded. Let’s hope Space X gets final reliability numbers closer to Arianne’s.

          • Patrick Bane says:
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            And your sentiment exudes one common theme – commercial launches.

            Commercial customers are far more willing to take the risk of launch failure than say a defense payload. Why? They can’t afford to pay a premium for the reliabilty & sensibly make reasonable profit.

            On the other hand, national defense payloads, ones that have spent years or a decade in the making, are completely intolerant to a launch failure and will by all means pay a premium for reliabilty. Hence, why I suggest that deeming SpaceX business model a singular solution for the industry is absurd. If their focus puts cost reduction first, they’ll see another launch failure, but if thats the market (commercial) they tend, then so be it. But, they aren’t just attempting to be commercial, they want government payloads, they want to put PEOPLE on their rockets. In time, they may prove reliabilty, but that’s a condition that is earned by repeated successful & scrutinized launches, it is not one that is granted by word of mouth.

          • Rune says:
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            Hum. Funny. No rocket has ever attained the Atlas V’s level of reliability in history, yet you contend that such level of reliability is necessary to maintain certain aspects of a successful space program. I do wonder how the rest of the world does it… or the US did before the Atlas V showed up, for that matter.

            There is no such thing as a failure-free rocket. There just haven’t been enough Atlas launches to find its failure rate, that’s all (which I’ll be the first to say, is no small feat considering how many have been launched).

            And if your payload is so expensive you can’t afford to lose it, you should rather look at how to make it cheaper, becasue shit eventually happens. As to people… show me any accident-free means of transport, and you have me sold.