-
#220
by
sdsds
on 09 Feb, 2013 23:36
-
In short, ULA may be able to defend their patch of turf for some time to come, but that patch will be a decreasingly small part of the pie. Eventually--unless there are subsantive changes--defending that patch will become unsustainable or it will be reduced to irrelevance.
I think joek knows this so this isn't really a reply to him, but: there is a viable business strategy which defends a shrinking fraction of the pie. It depends on the entire pie growing at a rate faster than the rate at which one's defended piece is shrinking.
I mention it because this is what I hope happens with ULA. I don't think the demand for launching "Class A" (USAF/NRO most critical) payloads will shrink in absolute terms anytime soon, but I hope it becomes an increasingly small fraction of the overall spacelaunch pie.
-
#221
by
jongoff
on 10 Feb, 2013 02:57
-
With SpaceX's staffing now equivalent to ULA's why does anyone think that Falcon is cheaper to build and launch?
While I think that SpaceX takes vertical integration too far, and worry about their growing headcount, I'm not sure this is a fair apples to apples comparison. Sure, SpaceX's staff is almost as high as ULA's, I'm pretty sure that doesn't include all of the people working at major subcontractors/vendors for ULA (such as those working full-time at Rocketdyne building engines for ULA's vehicles). Also, as others have noted the SpaceX total includes all of those working on and supporting Dragon and DragonRider. Because SpaceX is also selling cargo/crew delivery as well as normal satellite launches, some of the fixed cost of those people can be covered by higher priced crew and cargo missions.
Not saying that SpaceX's prices won't start increasing over time (they've already increased quite a bit just for Falcon 9), just that comparing their staff to ULA's staff isn't an apples-to-apples comparison.
~Jon
-
#222
by
LouScheffer
on 10 Feb, 2013 04:27
-
With SpaceX's staffing now equivalent to ULA's why does anyone think that Falcon is cheaper to build and launch?
Doesn't ULA buy RL-10 engines for roughly $40M each, whereas the SpaceX staffing includes building their own engines? Even this one item could make ULA rockets noticeably more expensive than SpaceX ones, even with similar staff, and I suspect it's far from the only example.
-
#223
by
Hyperion5
on 10 Feb, 2013 05:43
-
With SpaceX's staffing now equivalent to ULA's why does anyone think that Falcon is cheaper to build and launch?
Doesn't ULA buy RL-10 engines for roughly $40M each, whereas the SpaceX staffing includes building their own engines? Even this one item could make ULA rockets noticeably more expensive than SpaceX ones, even with similar staff, and I suspect it's far from the only example.
Well now, that implies a very interesting possibility. Would ULA be better off making their own upper stage engines? It's not like there aren't laid off Rocketdyne people they couldn't hire. If a single RL-10 is really costing 40 million dollars, would that push ULA towards emulating the Spacex business model someday? In their position, I'd certainly be tempted to build my own if I could get the unit price down dramatically. Sure it'll require some investment, but there's no gain without risk in business.
-
#224
by
kevin-rf
on 10 Feb, 2013 05:53
-
Pre formation of ULA a large number of RL-10's where acquired by Boeing for an unknown price. So many that ULA has been talking about modifying some to work on Atlas. $40 million is the often quoted as the assumed price if you where to have a new small run batch built.SpaceX's advantage is they can shift people to produce small batches as needed without incurring other unrelated overhead.
-
#225
by
a_langwich
on 10 Feb, 2013 08:33
-
This may only be tangentially related (more "how should DoD influence ULA's business model going forward"), but why shouldn't the DoD structure its "infrastructure" payment as payment for a few extra launches?
Here's the idea: instead of $1 billion paid to do nothing, DoD pays a roughly equivalent amount for perhaps 4-5 launches. Perhaps no more than a couple hundred million extra for materials costs. These launches are not allowed to fly "Class A" DoD payloads, they are instead required to be developmental missions. Those missions might be expected to fly for example an ACES upper stage, Al-Li tanking construction, DIVH propellant cross-feed, emergency detection systems, perhaps (with greater IR&D funds) propellant densification, glide-back boosters, and solids on the DIVH. These ideas were taken from ULA suggestions for EELV improvements over the years.
While ULA would not be allowed to fly "Class A-requiring" or commercial payloads on these flights, they might still be used to fly experimental DARPA or government/university payloads--any non-commercial payload for which the sponsor understands the risk of failure is higher (because of the developmental nature of the launch vehicle). Any such payload would have to pay the additional cost for integration. Some consideration would have to be made to make sure this didn't siphon off the missions needed to move SpaceX to class A launcher status.
The benefit to ULA is that they get a sort of "launch customer" for improvements to their launchers. It's a golden opportunity to improve their competitive footing, boost the TRL level of new capabilities or improvements, without risking a class A payload. The downside is that instead of getting a fat check for launches-that-do-not-exist, they'd actually have to finish designs and bend metal and risk a launch. On the other hand, in fierce budget fighting, money for doing _something_ would be much easier to justify. Some internal investment would be required to finish the engineering for the improvements, but that would be offset by fewer launches than $1 billion would otherwise buy, and by not including payload integration in those launch costs.
The benefit to the DoD/AF (NASA sneaks in here, too) is that they would get improvements to the major two launch vehicles, and indeed to US space capabilities. For example, rather than delaying a spy satellite for years because it required more capability than existing launchers could provide, this program would expand out capability without risking a perhaps billion-dollar payload. The ACES upper stage could provide more flexibility and all sorts of options for BLEO missions. Once a basic ACES design is flown, you could target a follow-on mission, perhaps with a bit of DARPA or NASA money, to demonstrate cryogenic propellant transfer and long-term storage. I'm not aware of how the ULA infrastructure payments are handled, but performing actual launches is probably better able to keep subcontractors' production lines employed. Almost certainly it protects the entire infrastructure better than a simple payment.
SpaceX proponents will no doubt protest this is an unfair subsidy, and indeed it is. But in the near term, SpaceX has more launches on its plate than it has demonstrated the capability to put away, so it won't affect their prospects in the short term. Furthermore, the program should be structured in such a way that it does not rob payloads from SpaceX--because it is intended for launch vehicle development. In the longer term, SpaceX is competing commercially, and their pricing structure is still much more attractive, so they are still in good shape. Furthermore, the alternative is the status quo, which is a blank check to ULA. Over time, if SpaceX proves its capability and maintains its prices, the infrastructure payment (and/or this program) will likely disappear.
-
#226
by
Jim
on 10 Feb, 2013 12:32
-
So let me get this straight, ULA is going from having a monopoly on both NASA and DoD launches
It never had a monopoly on NASA missions.
-
#227
by
Jim
on 10 Feb, 2013 12:34
-
It's not like Orbital couldn't get a more ambitious CEO who wanted to upgrade the Antares and compete for more NASA & DoD launches.
The fact that they are using a solid second stage and launching from Wallops means they aren't serious.
-
#228
by
Jim
on 10 Feb, 2013 12:38
-
those future COTS launches could have been revenue for ULA instead. I also think the attitude of dismissing one's competition is really dangerous.
Never said anything about future cargo missions, was only referring to the past.
Not dismissing the competition, just your characterization of ULA.
-
#229
by
Jim
on 10 Feb, 2013 12:41
-
Here's the idea: instead of $1 billion paid to do nothing,
It isn't just to do nothing (sustaining the launch capability), it is used to meet the DOD's extra requirements.
-
#230
by
Hyperion5
on 10 Feb, 2013 16:29
-
It's not like Orbital couldn't get a more ambitious CEO who wanted to upgrade the Antares and compete for more NASA & DoD launches.
The fact that they are using a solid second stage and launching from Wallops means they aren't serious.
For now. If however they put someone more ambitious into the CEO position, there's really nothing fundamentally stopping Orbital from upgrading the Antares and building a pad at Cape Canaveral. I'm sure I don't need to post their financials yet again to prove they have both the cash and the operating margins to afford doing all of that. All they need now is different leadership and some time.
-
#231
by
a_langwich
on 10 Feb, 2013 19:20
-
Here's the idea: instead of $1 billion paid to do nothing,
It isn't just to do nothing (sustaining the launch capability), it is used to meet the DOD's extra requirements.
What requirements are those? Would anyone in the DoD or Congress share your opinion of why that money is appropriated?
Would you expect SpaceX, if it were to gather some share of DoD business, would need to charge some fraction of that billion just to meet the same requirements, in addition to launch pricing? I'm not aware of any discussion of that need during the talks for launch buys over the last few years.
More broadly, ULA's current philosophy is largely "we'll build it if they come, and pay up front." That contrasts with most innovative businesses, where they find opportunities "if we build it, they will come." The first approach works well if you have a rich, willing client; the question is whether ULA's client (DoD) will remain rich (in the face of tighter budgets) and willing (in the face of cheaper competition) going forward.
-
#232
by
WulfTheSaxon
on 10 Feb, 2013 21:22
-
More broadly, ULA's current philosophy is largely "we'll build it if they come, and pay up front." That contrasts with most innovative businesses, where they find opportunities "if we build it, they will come." The first approach works well if you have a rich, willing client; the question is whether ULA's client (DoD) will remain rich (in the face of tighter budgets) and willing (in the face of cheaper competition) going forward.
Which is doubly odd, because Lockheed in particular has somewhat of a history of designing random aircraft and then convincing the government they need them. But then Lockheed Martin Aeronautics ≉ Lockheed Martin Space Systems ≉ ULA.
-
#233
by
Jim
on 11 Feb, 2013 00:10
-
Which is doubly odd, because Lockheed in particular has somewhat of a history of designing random aircraft and then convincing the government they need them. But then Lockheed Martin Aeronautics ≉ Lockheed Martin Space Systems ≉ ULA.
No, they did not "design" them, they came up with some concepts and got the gov't to fund the design and development. Lockheed spent very little company fund on those aircraft. No different than what ULA is doing with ACES and IFV.
-
#234
by
Jim
on 11 Feb, 2013 00:14
-
Here's the idea: instead of $1 billion paid to do nothing,
It isn't just to do nothing (sustaining the launch capability), it is used to meet the DOD's extra requirements.
1. What requirements are those? Would anyone in the DoD or Congress share your opinion of why that money is appropriated?
2. Would you expect SpaceX, if it were to gather some share of DoD business, would need to charge some fraction of that billion just to meet the same requirements, in addition to launch pricing? I'm not aware of any discussion of that need during the talks for launch buys over the last few years.
3. "if we build it, they will come"
1. Extra rehearsals, security, manifest games, west coast pad sustainment (one flight a year is not enough to maintain a workforce).
2, Yes
3. Doesn't really happen.
-
#235
by
Robotbeat
on 11 Feb, 2013 04:19
-
Xplor: SpaceX had 2 launches in 2012, not just one. Granted, that's still too low and caused them to bleed a customer or two (or swap satellites with the same customer, launching a bird on Proton), but the bleeding is less than I would've expected. If they can't get at least 3 launches, they'll be in trouble in 2013. In order to do well, they need 4, and it's already February...
Ben: Delta IV could do human launch, if required. It could even do Orion (and will do Orion, in fact, unmanned). Atlas V is significantly cheaper, but D4/D4H is pretty capable (and has room for capacity growth with almost all the same launch infrastructure).
SpaceX's manifest shows that they can be pretty competitive globally, IF they ever manage to get their launch rate up. Along with their ISS duties (which serve an analogous stabilizing role as ULA's payment for fixed cost from DoD), this steady stream of payloads improves the situation by quite a bit and keeps them price-sensitive (even as they'll probably keep climbing up the value chain with Falcon Heavy, etc). They actually /may/ be able to improve costs with a reusable first stage (and the consistent ISS flights--if SpaceX also gets crew--are in the right payload range and already provide nearly enough flights just by themselves to justify a flyback first stage, if you believe Lockheed's analysis and don't count the development cost against it). But this is all contingent with SpaceX actually managing to hit their ambitious manifest flight rate (16 flights per year??? they've done 2 at best!).
As far as ULA's business model needing changing...
In 2010, ULA had 8 launches. SpaceX had 2.
In 2011, ULA had 11 launches. SpaceX had 0.
In 2012, ULA had 10 (and there were no Delta II flights in 2012). SpaceX had 2.
Right now, it looks like ULA is far ahead of SpaceX. SpaceX is retiring v1.0 this year, and v1.1 has never launched and it's all they have right now (until Falcon Heavy). ULA still has 3 years of 3 different launch vehicles, providing a good source of income in case one has a stand-down or something. Then, ULA has contracts a good 5 years out. If SpaceX doesn't make some serious headway on their manifest this year (has to be 3 launches... MAYBE just two), then they're in danger of closing up.
ULA is in a far less precarious position and they are focusing on trimming costs (consolidation, increasing commonality, etc) while SpaceX is investing heavily in R&D, bringing three or four major new projects online (v1.1, crewed dragon with vertical landing, Falcon Heavy, another launch pad, and the start of Falcon 9 reuse) in the next few years while ULA will be heavily focused on profitability.
ULA has a very solid base with almost a dozen launches every year (plus the fixed cost payment), SpaceX has a max historical yearly launch rate of 2. This doesn't mean SpaceX WILL fail, but they are a gamble (with a pretty sweet payoff, even if only half of what they're planning comes to fruition).
And as far as stealing all of ULA's launches, SpaceX will have to learn all the intricacies of USAF's payload integration requirements, which counts as another big project (they will need something like a vertical integration facility). And that will take a long time.
If I were a betting man, I would say ULA is less likely to go out of business within the next five years than SpaceX. Actually, let's reduce that to three years. If SpaceX survives the next three years, they will have had to have gotten their launch rate up significantly and would be a credible threat to ULA. But right now, ULA is winning the game.
...but I think SpaceX has the slight advantage that the company is in heavy-growth-investment mode, not profit-taking mode (this doesn't outweigh the disadvantage of low flight rate). ULA is stable enough that their parent companies expect ULA to make a good profit, not just be a bucket where you throw your money. SpaceX is growing and presumably reinvesting any profit they make (and they may be less than profitable right now, since they're investing so much and bringing so many new projects online), while ULA is presumably producing a reasonable profit to Boeing and Lockheed (nothing spectacular, I'm sure... you're not going to get filthy rich in this business).
-
#236
by
WHAP
on 11 Feb, 2013 04:24
-
With SpaceX's staffing now equivalent to ULA's why does anyone think that Falcon is cheaper to build and launch?
Doesn't ULA buy RL-10 engines for roughly $40M each, whereas the SpaceX staffing includes building their own engines? Even this one item could make ULA rockets noticeably more expensive than SpaceX ones, even with similar staff, and I suspect it's far from the only example.
When someone mentioned RL-10 prices a year ago, it was only $30M. There was no justification for that number then, and there is no justification for the number you've created now. Provide a reference that isn't some other post on a forum, please.
-
#237
by
a_langwich
on 11 Feb, 2013 07:15
-
Here's the idea: instead of $1 billion paid to do nothing,
It isn't just to do nothing (sustaining the launch capability), it is used to meet the DOD's extra requirements.
1. What requirements are those? Would anyone in the DoD or Congress share your opinion of why that money is appropriated?
2. Would you expect SpaceX, if it were to gather some share of DoD business, would need to charge some fraction of that billion just to meet the same requirements, in addition to launch pricing? I'm not aware of any discussion of that need during the talks for launch buys over the last few years.
3. "if we build it, they will come"
1. Extra rehearsals, security, manifest games, west coast pad sustainment (one flight a year is not enough to maintain a workforce).
2, Yes
3. Doesn't really happen.
1. Extra rehearsals could be satisfied by actual countdowns and launches. (Or incorporated in individual launch prices.) So could west coast pad sustainment. An ACES test or Al-Li tanking could be proven from the west coast as easily as the east. Manifest games should be much easier to handle with more constant production and commonality between the two launchers (DIVs with common cores, and possibly a shared ACES upper between both Atlas and Delta).
2. We'll have to see, I suppose.
3. Yes and no. Yes, in the world of government contracting, it isn't done. It isn't needed. The government has been happy to assume all risk, and pay nicely even when designs are half-baked. That I think is why the US government HAD to be involved in space at the beginning, because the risk was too great and the costs too high and the rewards too far off for any commercial venture to sustain. I do not believe any of those apply to satellite launches today. Exhibit A: the launch insurance industry.
No, "build it and they will come" happens all the time in the broader business world. That is almost the definition of entrepreneurial activity. Apple built a do-it-yourself "home computer," a windowed and mouse-driven personal computer, an iPod and an online music store, an iPhone smartphone and an online app store, and an iPad tablet, all before these markets existed. Certainly, in the case of the tablet, many previous attempts had crashed and burned. IMO, the jury is still out on the suborbital market, and the jury hasn't even been chosen for Bigelow's market. But that approach does happen, and it does pay off handsomely for the right idea at the right time.
The problem I see is that both ULA and DoD/NRO/NASA/etc need the EELVs to be trying out and incorporating improvements. But right now, both are risk averse past the paper study stage. Certainly NASA programs and to a lesser extent DoD programs are heavily motivated to design to the launchers as they are now by TRL evaluations of projects, and ULA is forced to maintain its highly proven designs. Don't mess with success. But the definition of success changes over time--we aren't still using those successful and practical rotary dial telephones. There's a reason why biology is all about mutation and evolution, even for successful organisms. Look at the Soyuz: it is incorporating improvements. The Briz upper stage is incorporating changes. The Chinese are tweaking and upgrading their launchers. The Ariane has a thought-out evolution path. Those are proven designs; of course the less-proven competitors are working all-out to improve their capabilities.
Somebody needs to be strategic, looking forward at capability enhancements, and selectively funding through the flight stage ones that make sense. NASA should, for its science payloads if not for many others, but its science budget is continually gutted and its exploration budget is consumed by SLS. DoD should too, and I think this is a line-item in the budget that could be seized upon to accomplish the task. Even if you did it partially, 3/4 billion and 1 exp launch the first year (1/4 billion for this), 1/2 billion + 2 exp launches (1/2 billion paid for these) + material costs the second year, or
some variation like that.
Has Al-Li really not been incorporated in Atlas V or Delta IV tanks? What's the scale of that performance improvement compared to RS-68As for the DIVH?
-
#238
by
sdsds
on 11 Feb, 2013 08:30
-
Looking specifically at the benefit to ULA of discontinuing the 4m DCSS and replacing it with a "common Centaur", how aggressively could that be done? For which of the launches listed below is it definitely ruled out?
2013
November - GPS IIF-5 - Delta IV-M+(4,2) - Canaveral SLC-37B
2014
May - GPS IIIA-1 - Delta-IV-M+(4,2) - Canaveral SLC-37B
2nd half - GPS IIF-9 - Delta IV-M+(4,2) - Canaveral SLC-37B
NET 2nd half - GPS IIF-10 - Delta IV-M+(4,2) - Canaveral SLC-37B (or 1st half 2015)
TBD - AFSPC-4 - Delta IV-M+ (4,2) - Canaveral SLC-37B (or 2015)
TBD - SBIRS-GEO 3 - Delta IV-M+(4,2) - Canaveral SLC-37B
2015
February - GPS IIIA-2 - Delta-IV-M+(4,2)/Atlas V 401 - Canaveral
December 2016 - TDRS-M - EELV - Canaveral
2nd half - GPS IIF-12 - Atlas V 401/Delta IV-M+(4,2) - Canaveral
TBD - SBIRS-GEO 4 - Delta IV-M+(4,2)/Atlas V 401 - Canaveral
Unclear:
NET 2016 - SBIRS-GEO 5 - Delta IV-M+(4,2)/Atlas V 401 (TBD) - Canaveral
NET 2016 - SBIRS-GEO 6 - Delta IV-M+(4,2)/Atlas V 401 (TBD) - Canaveral
TBD - GPS IIF-13 - TBD - Canaveral
TBD - GPS IIF-14 - TBD - Canaveral
-
#239
by
Proponent
on 11 Feb, 2013 11:21
-
If sustainability is the issue, wouldn't it be simpler and more effective to simply eliminate one of the two vehicles?
EELV is not about sustainable, it's about assured access.
That was my impression too (though
Jim seems to disagree), and that's why I said "if."