Author Topic: Augustine HSF Review SpaceX and Commerical Chat  (Read 57267 times)

Offline Jim

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« Reply #20 on: 10/27/2009 11:49 PM »

I have never of a parent company that doesn't care about its subsidiaries. For the parent companies, it's an asset that produces income.

It is not a subsidiary.  It is a joint venture between two companies which is to limit the liability of the parent companies.  It was a way of the parent companies to limit their losses.
« Last Edit: 10/27/2009 11:50 PM by Jim »

Offline Jim

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« Reply #21 on: 10/27/2009 11:52 PM »
(what happens when a team of 500 Aerospace/Analex/NASA/DoD mission assurance folks walk in the door to ensure the irreplaceable payload is successfully placed in orbit?).

The cost of the F9 becomes not much different than an Atlas but with less capability

Offline yg1968

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« Reply #22 on: 10/28/2009 12:34 AM »

I have never of a parent company that doesn't care about its subsidiaries. For the parent companies, it's an asset that produces income.

It is not a subsidiary.  It is a joint venture between two companies which is to limit the liability of the parent companies.  It was a way of the parent companies to limit their losses.

Not that it really matters but I looked it up before, it's actually a Limited Liabilty Company (LLC) owned 50%-50%. ULA paid a dividend (i.e. a distribution) in 2008 per the financial statements of the parent companies (which means that it doesn't currently have losses). But you are right that a corporation or a LLC are generally used because they offer limited liability for legal purposes. However, creditors will often ask guarantees from the parent companies, so limited liability is not always achieved because of this fact. In any event, the LLC units are an asset for the unit holders. So the parent companies care about their LLC units (unless the units have become worthless because, for example, the company will never be profitable -but this is not the case for ULA).
« Last Edit: 10/28/2009 12:57 AM by yg1968 »

Offline Jim

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« Reply #23 on: 10/28/2009 12:58 AM »
So the parent companies care about their LLC units (unless they have become worthless because, for example, the company will never be profitable -but this is not the case for ULA).

not really.  They aren't going to provide ULA any money for expansion or new markets.  ULA is off on its own to swim or sink.
jongoff is correct in his statement.
« Last Edit: 10/28/2009 01:00 AM by Jim »

Offline yg1968

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« Reply #24 on: 10/28/2009 01:02 AM »
If ULA is profitable, the parent companies care about it. I am not sure why they would let it sink. But ULA might be able to get its own financing, it may not need anybody else's help. But that doesn't mean the parent company doesn't care about it. If they didn't care about ULA, they would liquidate it or sell its assets.  The shareholders name ULA's board of managers and they can decide to liquidate ULA or sell its assets, if they wish.
« Last Edit: 10/28/2009 01:10 AM by yg1968 »

Offline Jim

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« Reply #25 on: 10/28/2009 01:20 AM »
1.  If ULA is profitable, the parent companies care about it. I am not sure why they would let it sink. But ULA might be able to get its own financing, it may not need anybody else's help. But that doesn't mean the parent company doesn't care about it. If they didn't care about ULA, they would liquidate it or sell its assets. 

2.  The shareholders name ULA's board of managers and they can decide to liquidate ULA or sell its assets, if they wish.

You don't understand why ULA exists.

1.  ULA was created so that LM and Boeing no longer had the boat anchors of the Delta and Atlas programs.  They in essences did sell the assets, when they created ULA.  That was the whole reason for ULA to exist. 

2. There is no board of managers.  The shareholders have no say.  Boeing and LM executives name the ULA  executives .

Offline Antares

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« Reply #26 on: 10/28/2009 01:48 AM »
It may be a false perception, but from the outside it looks like SpaceX are actively developing a lot of new hardware, whereas ULA have some very cool plans and designs, but are waiting for someone else to fund them.

Yeah, poor Boeing/LM have to sustain themself on potato scraps... they have only a few tens (or hundreds?) of billions worth of contracts with DoD, where would I expect them to find money to develop, say, a WBC?

But OldSpace companies as a whole have no will to do it unless someone covers the cost with sizable margins. They are accustomized to work for govt (DoD and NASA), they don't want to risk.

Oh, give me a flogging break!  Whose money do you think is paying SpaceX's bills RIGHT NOW?  Go back and look at their press releases from contracts they've won or financing they've secured.  There's a hell of a lot more of the former than the latter.
« Last Edit: 10/28/2009 01:56 AM by Antares »
If I like something on NSF, it's probably because I know it to be accurate.  Every once in a while, it's just something I agree with.  Facts generally receive the former.

Offline Antares

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« Reply #27 on: 10/28/2009 01:55 AM »
I'm interested whether ULA would fund a launcher HR programme themselves once someone gets serious about a capsule to go on it.

With a proper payback, yes.  But:
1) the parent companies to whom the profits accrue would have to weigh that relative to undermining their returns on other HSF projects.
2) the payback horizon would obviously be determined by the magnitude of the investment.  ULA and certain customers have one idea of what this takes (<$1B).  MSFC and certain consultants have another ($14B).
If I like something on NSF, it's probably because I know it to be accurate.  Every once in a while, it's just something I agree with.  Facts generally receive the former.

Offline Avron

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« Reply #28 on: 10/28/2009 02:08 AM »
Come now..   MSFC is the future , they will rescue HSF, in time.. just give them time, money, look what was done in 30 years at $1B a year 

Offline kkattula

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« Reply #29 on: 10/28/2009 02:11 AM »
It may be a false perception, but from the outside it looks like SpaceX are actively developing a lot of new hardware, whereas ULA have some very cool plans and designs, but are waiting for someone else to fund them.

Yeah, poor Boeing/LM have to sustain themself on potato scraps... they have only a few tens (or hundreds?) of billions worth of contracts with DoD, where would I expect them to find money to develop, say, a WBC?

But OldSpace companies as a whole have no will to do it unless someone covers the cost with sizable margins. They are accustomized to work for govt (DoD and NASA), they don't want to risk.

Oh, give me a flogging break!  Whose money do you think is paying SpaceX's bills RIGHT NOW?  Go back and look at their press releases from contracts they've won or financing they've secured.  There's a hell of a lot more of the former than the latter.

IIRC:

a) SpaceX developed Falcon 1 without NASA funding.

b) SpaceX started development of F5/9 and Dragon before COTS but it allowed them to hugely accelerate the program.

c) COTS required matching funding from SpaceX.

'Old space' has typically developed systems under cost plus not fixed price contracts. Although I believe EELV & X-33 were exceptions.


But remember, we are talking about 'perception'. Reallity is often quite a bit different.

Offline yg1968

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« Reply #30 on: 10/28/2009 04:07 AM »
1.  If ULA is profitable, the parent companies care about it. I am not sure why they would let it sink. But ULA might be able to get its own financing, it may not need anybody else's help. But that doesn't mean the parent company doesn't care about it. If they didn't care about ULA, they would liquidate it or sell its assets. 

2.  The shareholders name ULA's board of managers and they can decide to liquidate ULA or sell its assets, if they wish.

You don't understand why ULA exists.

1.  ULA was created so that LM and Boeing no longer had the boat anchors of the Delta and Atlas programs.  They in essences did sell the assets, when they created ULA.  That was the whole reason for ULA to exist. 

2. There is no board of managers.  The shareholders have no say.  Boeing and LM executives name the ULA  executives .

That's not how it generally works. The shareholders (or unit holders of the LLC to be exact) of ULA are Boeing and LM. The parent companies name the board of managers of an LLC because they control it. A transfer of assets to the company generally occurs when you form a company. But what I said is still true. 
« Last Edit: 10/29/2009 02:18 PM by yg1968 »

Offline Xplor

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« Reply #31 on: 10/28/2009 10:26 AM »
a) SpaceX developed Falcon 1 without NASA funding.

Elon invested something to the tune of $100M in Falcon, with some additional commercial side investment.  Through COTS he got an additional $270M to "demonstrate Dragon".  But SpaceX's COTS contract was completely front loaded for payment of "fluffy" milestone, such as contract turn on, requirements review, PDR.  Where is the orbital Dragon demo?  He spent most of that NASA funded COTS money developing F1 and 9, not Dragon.  Likewise, all of his Government launch contract down payments have been spent developing Falcon, not integrating payloads.  Also the various other DoD contracts he has gotten have helped.  And then there is the CRS $1.6B which he doesn't get any money from until he delivers but can be used to leverage private investment.

I'm not saying the above is wrong, but please don't paint SpaceX as a pure commercial play, he's gotten as much or more government money to develop Falcon 1 & 9 as either Boeing or Lockheed Martin did to develop the entire Delta IV and Atlas V family of rockets covering a much broader spread of capabilities!

'Old space' has typically developed systems under cost plus not fixed price contracts. Although I believe EELV & X-33 were exceptions.

This is true in the NASA human space flight world of Shuttle and Ares, but not in Americas expendable world.  Since 1987 the "expendables" have been developed primarily under commercial funding with DoD anchor tenants.  DoD only gave Boeing and Lockheed $500m each to develop Delta IV and Atlas V.  The contractors had to fund the rest of the development themselves, to the tune of 3 to 5 times the DoD investment.  NASA sience had the free ride, getting to use these two world class rockets without investing in their development.


I would love to see ATK, PWR, and Boeing investing their own money in Ares.  Much more comfortable for them to take the completely government funded contracts and develop whatever MSFC tells them to.  They get paid no mater what. Ares overruns, who cares NASA (read you and me tax payer) gets to pick up the bill.
« Last Edit: 10/28/2009 11:21 AM by Chris Bergin »

Offline Analyst

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« Reply #32 on: 10/28/2009 11:03 AM »
Please, please leave me the illusion SpaceX is financed much more by private investors than by government (aka taxpayer) money. ;)

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Offline JohnFornaro

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« Reply #33 on: 10/28/2009 01:11 PM »
First, "OldSpace" and "NewSpace" are not scientific nor legal terms, so their meanings can carry a host of person-specific ideas which have a good potential for confusion.  Benerally, I agree with a loosy-goosy definition of LockMart being "old" and SpaceX being "new".

SpaceX is building rockets from the ground up, using their own designs.  I'll wager that Spacex uses plenty of aluminum 2024, and that all of its engineers are quite familiar with Sutton.  So the term "from the ground up" doesn't require every last thing in the chain to be completely new.  One of the things that's "new" in SpaceX is their claim that they are much more efficient than other launch companies; for example, they claim that their workforce is an order of magnitude smaller that the competition.  Yesterday, their website pointed out that they currently employ about 800 people.  If that's true, and if Falcon 9 can be compared to Atlas, as Jim seems to suggest, then there are some interesting comparisons to speculate about.

From:
http://www.spacex.com/falcon9.php

the Falcon 9 User's guide:

Mass to LEO:  10,450 kg        23,050 lb       
Mass to GTO:   4,540 kg        10,000 lb

From:
http://www.ulalaunch.com/index_products_services.html

the Atlas V product card Atlas 401:

Mass to LEO:   9,750 kg        21,400 lb       
Mass to GTO:   4,750 kg       10,470 lb
Costs:

Falcon 9

LEO (s/c<80% capacity) $44M 
LEO (s/c>80% capacity) $49.5M
GTO (s/c<3,000 kg)       $44M 
GTO                            $49.5M 

Atlas V 401

From:
http://www.spaceandtech.com/spacedata/elvs/atlas5_specs.shtml

$90M

Cost information for Atlas is not as easy to find as that for SpaceX.

I quote Jim:
"The cost of the F9 becomes not much different than an Atlas but with less capability"

I'm doing the best I can to compare apples to apples.  The Atlas has more capabilities; it has a fifty year track record and many rocket variations.  The subset of Atlas V 401's will be substantially smaller than the whole Atlas family, but probably a much longer track record than Falcon 9.  Falcon 9 has five launches, and no operable variations yet, but it reportedly costs half as much as Atlas V 401.

Given the comparison above, I have no idea what Jim is trying to say.

Moving on to Xpor's reply #206.  Clearly SpaceX has received a huge quantity of money from the government.  Part of the money is "payment" and part is "investment" and whatnot.  I have no idea how this all is divvied up.  But his statement, "he's gotten as much or more government money to develop Falcon 1 & 9 as either Boeing or Lockheed Martin did to develop the entire Delta IV and Atlas V family of rockets" doesn't ring true.  Dollars from a half century ago are a lot smaller than today's dollars.

I don't understand all this discussion about public/private investment above.

Maybe Mr. Musk can post here and reveal what must be the most sensitive proprietary info he has: the exact numbers of his public/private investment money ratio.

I'll start holding my breath....

(Edited 11-03-09 to fix line breaks)
« Last Edit: 11/03/2009 02:01 PM by JohnFornaro »
Sometimes I just flat out don't get it.

Offline Jim

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« Reply #34 on: 10/28/2009 01:18 PM »

Falcon 9

LEO (s/c<80% capacity) $44M 
LEO (s/c>80% capacity) $49.5M
GTO (s/c<3,000 kg)     $44M 
GTO                    $49.5M 


Those aren't gov't prices

and the F9 10K to GTO is iffy.

Offline JohnFornaro

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« Reply #35 on: 10/28/2009 05:31 PM »
Forget GTO, then if you wish.  I feel certain that SpaceX will get to GTO, since that's where a good bit of the comsat and geosat market is.  And I'm sure government prices are much lower.  [stifled snort]  And when SpaceX sez: "same pricing for all customers" on their website, that's a falsehood?

It appears that Atlas V 401 and Falcon 9 can carry roughly the same payload to LEO, and it also appears that Falcon 9 costs about half as much to launch.  And if SpaceX has 1/10th the personell overhead, that tells me that oldspace looks more like a dinosaur, and newspace looks more like a mammal.  It also suggests that SpaceX is making a good profit.  Unless there's profit to be made in space, there will be no companies doing business in space.

Which then suggests that commercial actors are beginning to succeed.
Sometimes I just flat out don't get it.

Offline Analyst

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« Reply #36 on: 10/28/2009 05:45 PM »
You are making a lot of unqualified assumptions.

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Offline Jim

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« Reply #37 on: 10/28/2009 06:09 PM »
1.  Forget GTO, then if you wish.  I feel certain that SpaceX will get to GTO, since that's where a good bit of the comsat and geosat market is. 

2.  And I'm sure government prices are much lower.  [stifled snort]  And when SpaceX sez: "same pricing for all customers" on their website, that's a falsehood?

3.  It appears that Atlas V 401 and Falcon 9 can carry roughly the same payload to LEO, and it also appears that Falcon 9 costs about half as much to launch.  And if SpaceX has 1/10th the personell overhead, that tells me that oldspace looks more like a dinosaur, and newspace looks more like a mammal.  It also suggests that SpaceX is making a good profit.  Unless there's profit to be made in space, there will be no companies doing business in space.


1.  No, GTO is the market.  There is little use for LEO.

2.  No quite the opposite, hence "The cost of the F9 becomes not much different than an Atlas but with less capability"

3. Appearances are deceiving.  Spacex doesn't know its real costs.  It has yet to be in the recurring phase of operations.  This is where costs increase.  This is where more people are added.

Offline JohnFornaro

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« Reply #38 on: 10/28/2009 06:11 PM »
No, I haven't made a single assumption.  Quit putting words into my mouth.  The only info I have to go from is a couple of official looking websites.

If SpaceX's claim of an order of magnitude smaller workforce is true, who am I to assume otherwise?  If someone has better info, then may they come forward.  I could make the "assumption" that SpaceX is paying their workforce 10times the going rate and thus they aren't making a good profit.  That's a safe assumption.  Not.

Furthermore, SpaceX claims to be making the large part of their rockets, not relying on sub-contractors, with their inevitable layers of overhead and profit.  I didn't look into ULA's use of sub-contractors, just at the reported bottom line $90M number, so I can't comment on that.

Now maybe my suggestions are wrong.  So say that.  Again, I didn't make a single assumption.
Sometimes I just flat out don't get it.

Offline Herb Schaltegger

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« Reply #39 on: 10/28/2009 06:52 PM »
When Jim is pointing out that SpaceX's quoted prices are not "government prices" I think he is obliquely referring to the fact that doing business of that sort as a federal contractor requires a much higher level of of requirements traceability and verification, as well as compliance with reams of federal acquisition regulations, all of which add to cost substantially over what is typically necessary between commercial entities.

But I could be wrong. He'll correct me if so. ;)
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