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Commercialization

Space Dinosaurs Continue To Eat One Another

By Keith Cowing
NASA Watch
September 18, 2017
Space Dinosaurs Continue To Eat One Another

Northrop Grumman to Acquire Orbital ATK for $9.2 Billion, Northrop Grumman
“Northrop Grumman Corporation (NYSE: NOC), a leading global security company, and Orbital ATK, Inc. (NYSE: OA), a global leader in aerospace and defense technologies, today announced they have entered into a definitive agreement under which Northrop Grumman will acquire Orbital ATK for approximately $7.8 billion in cash, plus the assumption of $1.4 billion in net debt. Orbital ATK shareholders will receive all-cash consideration of $134.50 per share. … Upon completion of the acquisition, Northrop Grumman plans to establish Orbital ATK as a new, fourth business sector to ensure a strong focus on operating performance and a smooth transition into Northrop Grumman.”
Press conference presentation
Keith’s note: Lockheed ate Martin Marietta. Boeing ate Rockwell and McDonnell Douglas. Aerojet ate Rockedyne. Lockheed Martin and Boeing created a sanctioned monoply (ULA). Northrop ate Grumman. ATK ate Orbital. Now Northrop Grumman is going to eat Orbital ATK. That’s one less company to pay Coalition for Deep Space Exploration membership dues. How is this good for competition? Oh yea – that is what SpaceX, Blue Origin, and Virgin offer.
The Coalition for Deep Space Dancing Dinosaurs, earlier post

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

26 responses to “Space Dinosaurs Continue To Eat One Another”

  1. ThomasLMatula says:
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    Yes, this is normal in an industry undergoing change. Lima and Baldwin were the two biggest makers of steam locomotives and fierce competitors who merged when GM EMD and GE introduced diesels to the industry. After a last ditch attempt to push steam engines they switched to diesels – too little too late – and are now long gone.

    RLVs are to the launch industry what diesel were to railroads so expect more mergers as markets for ELVs decline.

    • savuporo says:
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      Yeah but the comment is slightly off topic. Norhtrop is not and doesn’t attempt to be in the launch industry. As reported here and elsewhere, this is mostly for missiles. Also, Northrop will be owning two distinct and decently successful satellite bus lineups.

      • ThomasLMatula says:
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        Lima/Baldwin survived into the 1970’s making construction equipment before Greyhound, who bought them in the 1960’s shut them down. But they built their last locomotive in 1956 ending a business line that started in 1831.

        Yes, they have satellite lines, and it will be interesting to see if the adapt to RLVs by building them smaller, more standardized and less expensive to go with more frequent and cheaper flight that will result from the transition to RLVs.

        But also, unlike Lima/Baldwin, these are defense contractors with good connections in Washington and that will keep them in business.

  2. passinglurker says:
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    So if Northrop buys out Orbital what really changes? Does northrop start buying engines from aerojet again? Do they cancel any of the myriad of launch vehcles for haveing dubious futures? do they push pegasus and stratolaunch hard and try to cut prices? will they move away from MEV’s and try to ape spacex and blue?

    Or were they just in this for the military arm of the company and so they’ll just let space systems keep doing what its doing?

    • Spaceronin says:
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      Does this mean that they will complete the TR-312-100YN and fly it on the GeoStars then? Go for a bit of vertical integration there..

      • passinglurker says:
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        It would be interesting to see but it could likely be dependent on the customer which may be more interested in flight proven designs.

  3. John Kavanagh says:
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    For Northrop, the space launch business is going to be a side show compared to potential revenues from replacing aging Minuteman missiles with the first American ICBM of the 21st century, a.k.a. the Ground Based Strategic Deterrent. Orbital ATK’s solid rocket motor business will earn far more tucked quietly away in silos underneath nuclear warheads than it will strapped on to the sides of SLS. https://www.washingtonpost….

  4. Daniel Woodard says:
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    Not long ago Orbital was the new company with aggressive and imaginative ideas. They were remarkably sucessful for a startup.

    • kcowing says:
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      Yea – Orbital was the SpaceX of the late 1980s

      • ThomasLMatula says:
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        Yes, then they were assimulated by the Swamp. Resistance is futile.

        • Michael Spencer says:
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          Old space appears, at least to these uninformed and distant eyes, to be headed towards a meltdown.

          Is this true? Are SX/Bezos (and some minor players) stealing the launch business? Are Ariane and ULA and the rest of them left to fight over table scraps while SX/Bezos lap up the routine launches?

          If this is true: Why aren’t the Dinosaurs running scared? What’s in the pipeline? Where are the new ideas, the non-expendable boosters, the vision for Mars or whatever that drive a company forward?

          If they cannot innovate the future, why not try to buy the future? Wouldn’t they try to subsume SX, in one way or another? Wouldn’t they try to write a big check?

          Maybe they have. I have no way of knowing, but if so it’s not obvious. I see a more or less “business as usual” behavior while the new guys creep up, stealing lunch money.

          Which isn’t possible. ULA and everyone else in Old Space, as we call it around here, is run by very smart and capable people. They have Boards who are also smart, capable, and connected. And they can see the danger as well as anyone. What are they doing about it? Competing on quality? Seriously?

          Engines recovered by parachutes? No. What are they doing to protect a multi-billion dollar business?

          • ThomasLMatula says:
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            Except that SpaceX and Blue Origins are not for sale. Also Elon Musk and Jeff Bezos both have more money than Northrop-Grumman, Orbital/ATK are worth so they have no way to pressure them. Both Elon Musk and Jeff Bezos have dreams that are not for sale.

            In business there is the idea of strategic mypoia. When diesels came along Baldwin responded by trying to build better steam engines. They did try diesels, but they saw them as steam locomotives powered by diesels engines instead of steam, not a different way of running a railroad the way GM and GE did.

            This is the same with Old Space, they see RLV as just another type of launcher, not a different way of doing space operations. And being traditional government contractors they are also not as worried as if they were mostly commercial. They know government will take care of them as it did in these past. SLS is evidence to support this view.

            BTW one of the old steam engine firms, ALCO, did make the transitition from steam to diesel, but they saw themselves as making motive power for railroads, not steam engines.

          • IamGrimalkin says:
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            Ariane and ULA are creating reusable (engine) boosters. ULA is planning using on Blue Origin to provide engines for their Vulcan rocket.

            But really, what is “Old Space”? I never really see a consistent definition of it. Is the commercial wing of ISRO “Old Space”? Because they seem to be doing absolutely fine.

          • Jeff2Space says:
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            Ariane and ULA have created PowerPoint presentations that say they are working on reusability. Until they start actually reusing engines/stages, this doesn’t count anymore than when SpaceX was “landing” first stages in to the ocean and then watching them quickly break apart due to wave forces.

          • IamGrimalkin says:
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            I was replying to someone who was asking why “old space” (incl Ariane and ULA) are not working on reuse. What I am saying is that they are working on reuse. If you want to know what they don’t have reuse the answer is that they haven’t got there yet (or rather, in ULA’s case, their predecessor did get there, but it was a government program that got cancelled and they haven’t made a new one yet).

            Anyway, he also mentioned Blue Origin as “New Space”, and just like Ariane and ULA haven’t made reusable engines yet, Blue Origin haven’t made an orbital rocket yet, reusable or not (or indeed, launched any rocket for a customer). I mean, the Starliner can do reusable suborbital flights, if you are going by suborbital vehicles (yes, I know it can’t reach the karmen line, but that didn’t stop Musk making the same kind of comment).

          • Jeff2Space says:
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            My point is that I’m putting little faith in either Ariane or ULA actually reusing hardware. It’s way down on their list of things to do. Both have to make new launch vehicles (which are cheaper) in order to compete. I’m betting reuse becomes something they “will add later”, where later never quite comes.

          • Paul451 says:
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            this doesn’t count anymore than when SpaceX was “landing” first stages in to the ocean

            Testing flight hardware under the conditions of re-entry counts a thousand-fold more than the progress Ariane/ULA have made on their own reusability plans.

          • Jeff2Space says:
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            Agreed, I was being deliberately overly generous. For some reason, many industry observers consider PowerPoint presentations coming out of “old space” companies to be more credible than actual flight tests from “new space” companies actively working on reuse. These observers didn’t seem to take SpaceX seriously until they started reflying stages, and even then some of them are still doubting that reuse will be economical and reliable.

            When facing new-fangled technologies like diesel locomotives, many in the industry are still putting all their faith in more efficient steam locomotives, because nearly all of the existing locomotives in commercial service are still using steam.

          • Michael Spencer says:
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            Great point.

            My personal definition centers on very expensive expendable hardware and $ to orbit as the dividing line (among others).

          • IamGrimalkin says:
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            Well if “Old Space”, by definition, uses expendable hardware, it should be no surprise if you aren’t seeing “Old Space” companies coming along with reusable hardware- if they did, they wouldn’t be “Old Space” companies anymore.

  5. Aero313 says:
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    This smells of Northrop Grumman trying to buy their way into the GBSD prime contractor spot. It was never clear to me how a company that never built a launch vehicle was credible to be prime for Minuteman IV. Buying that experience is one way. The OCI problem remains, however. ATK was specifically excluded from favoring one of the bidders. We’ll see how that turns out.

  6. JadedObs says:
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    For those who think this has anything to do with space launch – get real! Northrop is a $50B company – maybe a $60B company if this goes through – are they doing this to compete is a world launch market worth a few billion dollars with lots of international subsidized competitors, a US near monopoly provider of government services and a couple of US billionaires who see space as more important than profits? Thinking this is about SpaceX show’s more than a bit of navel gazing – the defense department is a $600B market – that’s what’s driving this.

  7. MountainHighAstro says:
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    I am wondering, what exactly does Virgin offer?