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April 11, 2010
Aerospace Business Has Its Doubts About Plans to Revamp NASA
By KENNETH CHANG
Boeing and Lockheed Martin, the aerospace giants with decades of experience working on America’s space program, will happily sell rockets to carry astronauts into space, but the companies are leery about taking a leading role in President Obama’s vision for a revamped National Aeronautics and Space Administration.
The prospect of NASA relying on smaller companies — unproven upstarts in the view of critics — could create yet another hurdle in convincing an already skeptical Congress of the idea of relying on commercial companies to provide taxi transportation to the International Space Station.
“I don’t think there is a business case for us,” John Karas, vice president and general manager of human spaceflight at Lockheed Martin, said about space taxis.
Publicly, Boeing has been enthusiastic. “We have a vested interest in the International Space Station,” Brewster H. Shaw, vice president and general manager of Boeing’s NASA Systems business unit, said in February after NASA awarded the company $18 million to draw up a preliminary design of a capsule that could serve as the basis of a commercial crew system. “We want to see I.S.S. live up to its potential by having a robust logistics for the delivery of cargo and crew.”
But Loren B. Thompson, an analyst at the Lexington Institute, a policy group financed by military contractors, said Boeing is more skeptical in private.
In 1995, Boeing began pursuing the commercial space business through an international partnership called Sea Launch; it also developed the Delta IV rocket to launch both military and commercial satellites. The company lost money in both efforts, with Sea Launch filing for bankruptcy in 2009. To stem the Delta IV losses, Boeing and Lockheed Martin, which was also losing money with its Atlas V rocket, set up a joint venture called the United Launch Alliance in 2006.
“Senior Boeing executives have told me that they are skeptical about new launch opportunities, given the losses they incurred on previous initiatives such as Sea Launch and the Pentagon’s expendable launcher program,” Dr. Thompson said. “They are unlikely to invest large amounts of money on the new NASA vision.”
Mr. Obama has called for the cancellation of NASA’s current Constellation program to send astronauts back to the Moon. In its place, the administration would like to spend $6 billion over five years to finance the development of rockets and crew capsules by commercial companies.
NASA has not described details of the planned competition, and the companies said they would take a look at what the agency proposes.
“Assuming the business case is right, we’re all in,” said Keith Reiley, program manager for Boeing’s capsule development.
The business case depends on how much money NASA will be asking the companies to invest. In traditional “cost plus” development, NASA pays for everything. In that case, Mr. Reilly said, “of course, we’d be happy to do that.”
Both Boeing and Lockheed were stung during the last burst of optimism for the commercial space business about a decade ago. They invested several billion dollars — Lockheed to develop its Atlas V, Boeing for the Delta IV — in the hopes that the huge market for commercial satellites would supplement their traditional business of launching American military spy satellites.
The market did not materialize, and what business there was went to European and Russian rockets that were cheaper. With the United Launch Alliance, Boeing and Lockheed Martin share costs and profits equally. The joint venture now operates in the black, but the companies did not recoup their original investments, and much of the infrastructure they built remains underused.
“I think people who have been in the launcher business for many years find it hard to take the president’s plan seriously,” Dr. Thompson said. “They think it sounds like an elaborate wake for the human spaceflight program more than a plan for moving forward.”
The hoped-for commercial market for space taxis hinges on one small company, Bigelow Aerospace of Las Vegas, which is teaming up with Boeing on its capsule design.
Founded by Robert T. Bigelow, a real estate investor who made a fortune with the Budget Suites hotel chain, Bigelow Aerospace is developing inflatable space habitats that it hopes to market as research facilities to companies and foreign nations looking to establish a space program.
James McAleese, a defense consultant in McLean, Va., said that large aerospace firms like Boeing and Lockheed typically generate returns of 11 percent or 12 percent on their investments, and that for riskier enterprises like space, the companies would be looking for even higher returns. “I don’t believe there’s a burning desire to get into the spacecraft piece of the business,” he said.
If a commercial market developed, that could still be a lucrative business, said Mr. Karas, of Lockheed Martin, who once led the company’s expendable rockets business. But he added, “Personally, this is exactly the same rhetoric as last time.”
One likely bidder, Space Exploration Technologies Corporation of Hawthorne, Calif., is developing both a crew capsule, the Dragon, and its own rocket, the Falcon 9. Other possible competitors, like Blue Origin, a start-up by Jeff Bezos, the founder of Amazon.com, would build only the capsule and put it on top of an existing rocket, with the most likely choice being United Launch Alliance’s Atlas V.
The joint venture would sell rockets — the lower-end versions of the Atlas V cost about $150 million each — to the spacecraft makers. Thus, the alliance — and, indirectly, Boeing and Lockheed Martin — would continue their involvement with NASA’s space program, but in a secondary role.
Michael C. Gass, president and chief executive of United Launch Alliance, has said that upgrading the low-end version of the Atlas V for astronauts — adding a monitoring system to alert controllers of problems with the rocket and modifying the launching pad to handle astronauts — would cost $400 million.
“When you start getting into a heavier crew transfer vehicle and a dedicated launch facility, it’s over a billion dollars, but less than two,” Mr. Gass said. Those improvements “should be funded by the U.S. government” without additional investment from Boeing and Lockheed, he said.
http://www.nytimes.com/2010/04/12/sc...et.html?ref=us
The prospect of NASA relying on smaller companies — unproven upstarts in the view of critics — could create yet another hurdle in convincing an already skeptical Congress of the idea of relying on commercial companies to provide taxi transportation to the International Space Station.
“I don’t think there is a business case for us,” John Karas, vice president and general manager of human spaceflight at Lockheed Martin, said about space taxis.
Publicly, Boeing has been enthusiastic. “We have a vested interest in the International Space Station,” Brewster H. Shaw, vice president and general manager of Boeing’s NASA Systems business unit, said in February after NASA awarded the company $18 million to draw up a preliminary design of a capsule that could serve as the basis of a commercial crew system. “We want to see I.S.S. live up to its potential by having a robust logistics for the delivery of cargo and crew.”
But Loren B. Thompson, an analyst at the Lexington Institute, a policy group financed by military contractors, said Boeing is more skeptical in private.
In 1995, Boeing began pursuing the commercial space business through an international partnership called Sea Launch; it also developed the Delta IV rocket to launch both military and commercial satellites. The company lost money in both efforts, with Sea Launch filing for bankruptcy in 2009. To stem the Delta IV losses, Boeing and Lockheed Martin, which was also losing money with its Atlas V rocket, set up a joint venture called the United Launch Alliance in 2006.
“Senior Boeing executives have told me that they are skeptical about new launch opportunities, given the losses they incurred on previous initiatives such as Sea Launch and the Pentagon’s expendable launcher program,” Dr. Thompson said. “They are unlikely to invest large amounts of money on the new NASA vision.”
Mr. Obama has called for the cancellation of NASA’s current Constellation program to send astronauts back to the Moon. In its place, the administration would like to spend $6 billion over five years to finance the development of rockets and crew capsules by commercial companies.
NASA has not described details of the planned competition, and the companies said they would take a look at what the agency proposes.
“Assuming the business case is right, we’re all in,” said Keith Reiley, program manager for Boeing’s capsule development.
The business case depends on how much money NASA will be asking the companies to invest. In traditional “cost plus” development, NASA pays for everything. In that case, Mr. Reilly said, “of course, we’d be happy to do that.”
Both Boeing and Lockheed were stung during the last burst of optimism for the commercial space business about a decade ago. They invested several billion dollars — Lockheed to develop its Atlas V, Boeing for the Delta IV — in the hopes that the huge market for commercial satellites would supplement their traditional business of launching American military spy satellites.
The market did not materialize, and what business there was went to European and Russian rockets that were cheaper. With the United Launch Alliance, Boeing and Lockheed Martin share costs and profits equally. The joint venture now operates in the black, but the companies did not recoup their original investments, and much of the infrastructure they built remains underused.
“I think people who have been in the launcher business for many years find it hard to take the president’s plan seriously,” Dr. Thompson said. “They think it sounds like an elaborate wake for the human spaceflight program more than a plan for moving forward.”
The hoped-for commercial market for space taxis hinges on one small company, Bigelow Aerospace of Las Vegas, which is teaming up with Boeing on its capsule design.
Founded by Robert T. Bigelow, a real estate investor who made a fortune with the Budget Suites hotel chain, Bigelow Aerospace is developing inflatable space habitats that it hopes to market as research facilities to companies and foreign nations looking to establish a space program.
James McAleese, a defense consultant in McLean, Va., said that large aerospace firms like Boeing and Lockheed typically generate returns of 11 percent or 12 percent on their investments, and that for riskier enterprises like space, the companies would be looking for even higher returns. “I don’t believe there’s a burning desire to get into the spacecraft piece of the business,” he said.
If a commercial market developed, that could still be a lucrative business, said Mr. Karas, of Lockheed Martin, who once led the company’s expendable rockets business. But he added, “Personally, this is exactly the same rhetoric as last time.”
One likely bidder, Space Exploration Technologies Corporation of Hawthorne, Calif., is developing both a crew capsule, the Dragon, and its own rocket, the Falcon 9. Other possible competitors, like Blue Origin, a start-up by Jeff Bezos, the founder of Amazon.com, would build only the capsule and put it on top of an existing rocket, with the most likely choice being United Launch Alliance’s Atlas V.
The joint venture would sell rockets — the lower-end versions of the Atlas V cost about $150 million each — to the spacecraft makers. Thus, the alliance — and, indirectly, Boeing and Lockheed Martin — would continue their involvement with NASA’s space program, but in a secondary role.
Michael C. Gass, president and chief executive of United Launch Alliance, has said that upgrading the low-end version of the Atlas V for astronauts — adding a monitoring system to alert controllers of problems with the rocket and modifying the launching pad to handle astronauts — would cost $400 million.
“When you start getting into a heavier crew transfer vehicle and a dedicated launch facility, it’s over a billion dollars, but less than two,” Mr. Gass said. Those improvements “should be funded by the U.S. government” without additional investment from Boeing and Lockheed, he said.
http://www.nytimes.com/2010/04/12/sc...et.html?ref=us