At this point, I'm pretty sure the Stargate must be real and the crazy cost per unit for the F-35 is to hide R&D, construction and launch of a space defense fleet.
Not in the 1950s - that would have been the F-4 Phantom, and it was actually quite successful, in production from 1959 to 1979, and probably still flying (albeit totally hotrodded) by lots of air forces.
You might be thinking of the F-111, which was supposed to be all things to all services. That was the 1960s. Or maybe the failed A-12, which was supposed to be an attack plane for all services.
But you're correct, unitary, multi-role fighters have a bad history.
Multiroles like the F-18, F-16 (excluding the original worthless LWF proposal), Su-30, Su-35, (today's, though not the original) MiG-29 and Su-27 variants, Typhoon, Tornado, Mirage, Rafale, and nearly every fixed-wing fighter employed by every air force today definitely do not have bad histories--some less stellar than others, but none bad.
Multirole capability is primarily a function of the weapons an aircraft can employ. This wasn't true in the 70s when targeting pods were binoculars and effective employment of aircraft in strike roles required decent performance in low-and-slow flight regimes, but we've been living with pods and PGMs coming out of our ears for 25 years now. Design tradeoffs for multiroles today are primarily those of cost and maintainability. You can pay out the ears and get larger twin-engine multiroles that strain logistics and wallets, opt for a single-engine F-16alike multirole that'll do everything nearly as well except for flying really high and really fast, or inexplicably go Eurocanard to pay F-22 prices for sub F-35 capabilities. Anyway, the point is that it's next to impossible not to make a multirole these days even if you're trying; if you can employ weapons with your jet, you're multirole.
Its about budgets, both on development and on procurement and operational costs. The Su-27 series and the F-15 are relatively expensive jets to procure and operate, and the F-16C (or F-16A MLU) are a good middle ground budget wise.
The F-5E/F Tiger [0] was one of the most under appreciated fighters on the market in the 70s and early 80s. The was limited in A/A victories in real combat because of lack of opportunities, although successfully used at TOPGUN and FWS at a low operating cost. Although marketed as a LWF, The F-5 was actually a multi-role aircraft, and used in combat as a strike aircraft.
IMO the F/A-50 [1] is the most under-appreciated advanced 4th gen fighter on market. At around $30m its half the cost of a new F-16, although a refurbished F-16 is viable for budget constrained Air Forces.
You're thinking of the first generation of what became the SR-71, which was made for the CIA, and used a different numbering scheme: https://en.wikipedia.org/wiki/Lockheed_A-12
The F-4 was not a joint project in any way. It was a Navy funded aircraft that was later adopted by the Marines and Air Force.
Similarly, the A-12 was also a Navy program, not a joint project. The Air Force considered buying it (had it been funded to completion by the Navy) as a replacement for the F-111, but this consideration was largely superficial, and they had little to no input into it's design.
> isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services?
Not IMHO: The launch is a single, controlled, predictable task; they can choose their exact launch time and location for optimal performance; have extensive quality control checks and engineering, a room full of support engineers, etc; the exact route and timing of the launch is carefully planned ahead of time, etc.
The plane has to handle every contingency of war: Take off from wherever and whenever needed, fly anywhere, refuel in mid-air, dodge enemies trying to kill it (can SpaceX or ULA do that?), destroy enemies trying to avoid it, return safely home, etc.
This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough).
I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business.
> I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business.
That would be blatantly anticompetitive dumping, by the textbook definition.
Well, they wouldn't exactly put it that way in the press release.
An alternate end-game would be ULA stringing together a few contract wins, pushing SpaceX to the brink, and then ol' Elon gets a nice offer from Boeing and Lockheed...
Having read the exact same book I simply can't agree more. He has no reason to make a profitable company public seeing how much of a mess it has made things wtih tesla.
Illegal is a very lose term...so many projects "overrun" their contract price...I don't believe that these companies that have decades of military and government contract experience cannot budget for overhead expenses and project delays. They just end up charging more later on, rather than be upfront with actual costs.
There is generally a fig leaf where the customer changes the requirements after the contract is signed. Partly because it's hard to define complex requirements ahead of time and partly because middle management always needs to leave their mark.
You wanted that to be blue ok, that's an extra 2 million.
Definitely a possibility. Do you have any info on what their actual manufacturing & launch costs are? I've heard SpaceX's current manufacturing costs are about $40M per rocket (+ fuel, transportation, launch fees, etc.), but have no idea on ULA.
They're planning throwing away most of the first stage and catching the expensive engines on parachutes in mid air with a helicopter above the ocean then landing them on a barge softly enough not to damage them. They haven't actually done this or even built the engines to do it. They have represented this purely hypothetical approach as more efficient than reusing the entire first stage, because you sacrifice less payload weight and they claim refurb costs will be higher for full reuse. In practice if you can deliver whatever payload the customer wants they don't care how you do it, and of course refurb costs are likely to be almost entirely down to engine refurb, which they'll still need.
It's certainly not obviously more efficient or quicker reuse, it's likely to be slower and far more costly if they actually do manage it, so saying it is more efficient is just a way for ULA to try to sound like they are still a contender, even out their launches are still significantly more expensive and they haven't even tried to reuse engines.
Not to mention the complexity inherent in getting the engines separated from the rest of the vehicle.
Also, they're at totally different places along the technological readiness curve. They're proposing a theoretical concept, SpaceX has already recovered two first stages. Even if their parachute concept was theoretically superior (which I don't think it is) by the time they got it working, SpaceX would have years of operational experience with hoverslam.
If you look at the projected numbers for ULA's newer technology that isn't online yet, it still doesn't beat SpaceX's pricing. I think ULA will stick around, but it won't be because they win a price war.
Well, but what do you think they did after they named their price? I'd guess they hired a bunch of people, and their expenses came up to match what they could charge.
True, but a monopoly due to beating the competition with fair business practices is not the same as the monopoly targeted by anti-trust laws. Until a genuine competitor beats the honest monopoly fair and square, they stand at the top. Government work usually is fertile ground for the wrong type of monopoly, so I am very happy to see SpaceX disrupt this field. SpaceX's rockets are upwards of $40 million a launch, and the Lockheed F35 fighter price is going to keep climbing upwards of $200 million per fighter. Now let's see another SpaceX or similar innovative company step in to the military weapons system market! This should, but it will not translate to less taxes for the average Joe.
"Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of."
I don't really buy it. Decades of monopoly profits are a powerful incentive to stagnate. Those profits definitely fund a lot of survival, and potentially some interesting side projects, but I wouldn't call most of it innovation or progress. As for ambitious research projects, some people just do those on their own, and for the rest, there's academia, government grants, and venture capital.
> As for ambitious research projects, (...) there's academia, government grants (...)
I.e. both of which provided by a de-facto ultimate monopoly which can afford "luxuries" like basic research because they don't have to worry it won't pay off next quarter.
> (...) and venture capital.
I want to see VC-sponsored ambitious research projects. VC-money-induced thinking is very short term.
There is something to it. E.g. the government telecoms monopoly in Norway in the 1980s spent way more on research than the present day commercialized Telenor. However they were not necessarily innovative in products, but they did develop a lot of the original cell phone technologies which got later widely used.
I am not necessarily a fan of monopolies, but I think we owe it to ourselves to understand the tradeoffs and consider alternatives. E.g. how do you do basic research if there is so aggressive competition and shareholder look only 3 months ahead.
It is also worth nothing that the case of ULA isn't necessarily a case of merely monopoly but also how how that monopoly works. E.g. being a monopoly shouldn't require a cost plus contract. Secondly GM and the other big three are certainly not monopolies but have not proven any more capable than ULA in competing with Tesla in creating an electric car.
SpaceX is beating lots of other rocket companies which aren't necessarily monopolies. I think it is easy to overstate how bad ULA is when perhaps it is really about how good SpaceX is ;-)
Also remember the Russians also operated government monopolies for rocket building and yet managed to build considerably cheaper rockets than the Americans. I think there is a lot more to this issue than whether it is prive/public or a monopoly.
Wow, that's a stretch. He even uses google's "don't be evil" as an example, which we know is dead and buried. Monopolies have a way, way stronger incentive to just stand still, optimize and collect profits.
Put simply, monopolies do have greater capacity to innovate. When you're stuck in brutal competition, it's hard to funnel money into research which might not pay off for decades—your competition might have driven you out of business by that point.
On the other hand, the allure of monopoly profits is hard to ignore. It's tempting to simply funnel the profits into shareholder pockets and that's the approach investors will generally favor. For any middling CEO, it's the path of least resistance.
This is why founder-controlled monopolies (Google, Facebook, Amazon, etc.) are such a potent force. They have the incentive to preserve the companies long-term legacy (it's their personal legacy as well) through ambitions projects while also having the credibility and power to resist investor preferences for short-term profits.
The argument is that the desire to establish a monopoly stimulates innovation, not necessarily that monopolists are innovative once established.
There's also a big difference between natural monopolies (like electricity or gas distribution networks) and IP monopolies. Monopolies that are established by providing a vastly superior product require continuous R&D investment to maintain and natural monopolies do not.
That is so last century, when even monopolies tried to provide good customer service and a quality product. This century 100% of the effort is focused on business efficiency so that larger returns can be made for the shareholders/etc.
This means little reinvestment, little customer service, and a product/service only good enough to keep the conservative party from admitting that sometimes a little regulation is necessary (aka just about never).
PT said that in context of Google which is a search monopoly but pretends to me a media company where it might seem like just another fish in the pond.
That analogy is not applicable here because PT is referring to businesses who capture market by innovation and growth and become monopolies. I am reasonably sure PT is not referring to monopolies like USPS/AT&T/COMCAST/Cable Companies who have become monopolies using government's coercive power.
If you are running a business where your only customer is government and you are a monopoly I don't think anyone cares about innovation much. I would love to see counter examples if you have any.
> Problem with monopolies is that they lag behind on innovation.
With an arguable rare exception being AT&T from the early 20th century up until about ~1980 perhaps, nurturing within it the renowed Bell Labs and its predecessor(s).
There are two types of innovation. Random "out there" market ideas? Yes, because upstarts have to find something to upset the monopoly, so they're self-selected to have something interesting. But long-term, actual innovation? Pretty much only monopolies can afford that. That includes governments, and that includes R&D departments of various corporations that can stay cost centres for years before accounting notices.
There are of course exceptions - like Elon, who has and for whom the profitability of the company is only a secondary, supporting concern.
It's more likely that the response will be too slow than fast and overwhelming. ULA likely took advantage of their monopoly to underinvest in lower-cost technologies, and the lead time to correct that could be very long.
Under-invest? You mean not invest at all? While I get that Russia had rockets that were perfectly functional, they appear to have made no efforts at all in developing a more efficient in-house replacement.
>You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices.
I do. In the '90s I was working for a company that was used to bidding cost plus contracts when DoD contracts pretty much dried up as a result of the collapse of the Soviet Union. Management tried very hard to realign the company to compete in the commercial sector and failed miserably.
Changing the focus of a large organization like that from performance to cost is extremely difficult. Your people aren't organized properly, your finances aren't organized properly, and you have a cost+ culture that's hard to kick.
A much cheaper and safer strategy is to get Congress to wire defense contracts for you. ULA has manufacturing all over the place. What that means is job losses at ULA will be politically unpalatable. Beyond that, a logical argument can be made against putting all the national space eggs in one basket.
Beyond that, a logical argument can be made against putting all the national space eggs in one basket.
If that argument actually carried any weight, then ULA wouldn't exist, but Martin, McDonnel Douglas Aerospace, and GD Convair would. That is, the DoD and the defense companies trot out any arguments they feel like, and hope that Congress accepts them.
I concur on your analysis of companies that are fat and happy bidding and working on DoD contracts. It's really, really hard to turn those companies around.
At the time ULA was formed it wasn't an error. The US had a serious problem with rocket reliability and lost more than a few very expensive satellites. The devlopment or reliable and on demand access to space was a matter of national security.
ULA was formed at the end of 2006. The United States had no rocket reliability problem at that time. (Not counting rockets in development, of course.) The Enhanced Expendable Launch Vehicles (Altas V and Delta IV) had good track records when they were merged into ULA—each already had several flights under their belts at that point.
Thinking of Congress as a single entity that is capable of sustained memories is dangerous. Congress is a hive of bees, half of whom absolutely hate the other half, with individuals' life spans being potentially very short due to the mandatory fight-to-the-death that happens every 2 or 6 years. Said deathmatch inevitably leads to significant distraction, as well, since any sane individual is going to be concerned with their own survival to the point of preoccupation if it's constantly under threat. So each of these individuals is operating in the service of their own interests, which may or may not be in line with the interests of Congress or the nation as a whole.
Individual congresspeople might see why a past decision did or did not work out well in the long run. That's very different from seeing whether the same decision is politically expedient in the present moment. Nor does it necessarily imply that Congress as a whole is even capable of forming stable memories that can reliably retain that sort of knowledge.
It only applies when whole company was doing that. ULA is made from Boeing and LM, and Boeing does most of its job in the real market, selling passenger jets, and competes quite successfully.
The supply chain for their current rocket designs is a big problem. Many of the parts are outsourced to suppliers with very high overheads and margins, so they're already locked into a very high cost structure outside their own org. The only effective way to fix that will be to move to new designs with more efficient sourcing and cost structures and that will take time.
The other issue is capacity. Even if ULA dramatically cut their costs to drive SpaceX out of business, that will stimulate a huge surge in demand for launches. To drive anyone out of business, ULA would have to meet all of that demand on their own. I don't believe that's possible for them, they just don't have the capability to ramp up capacity fast enough, so SpaceX and other operators would pick up the excess business anyway.
> Even if ULA dramatically cut their costs to drive SpaceX out of business, that will stimulate a huge surge in demand for launches.
If only that were true. It does happen in many markets, but not currently in the space market. Space is still in the early-stage / chicken-and-egg mode. A bit of simple value chain analysis shows why.
TL;DR: we may be closer than I think to the space business moving into traditional economics, but even then it's probably decades out.
There are three disjoint space markets:
- military: largely price insensitive; volume unknown to me but not enormous; has specialized needs so a lot of it couldn't be satisfied by COTS launch systems
- science: some of which (earth sensing) can use COTS, the rest is low volume, has non-commercial requirements (e.g. non-LEO) and often has weird timing constraints depending on what the orrery says.
- commercial, which is what we all want to explode in volume! Today this is 100% LEO.
Science is largely the space side of NASA and I personally am convinced congress only funds in order to provide enough economic volume that the contractors are available to support the military. I.e. a fig leaf for the military just like the DoE (whose hands are all over space science as well).
So commercial: the chicken and egg problem the compound of two (used to be three, see below) issues: launches are rare and expensive, so satellites are few and far between, which makes them expensive, which doesn't encourage volume, which doesn't encourage launch capacity development, which keeps them expensive... This is one of the reasons why previous private efforts (e.g. Rotary Rocket) have foundered. Despite what my libertarian friends say, it's almost impossible to break out of this trap without government incentive; the activation energy is too high.
Now almost is not the same as 100% and this is where I'd like to believe and agree with you. And I do agree, except the time base I believe in is too slow to support the phrase "huge surge in demand"
One thing that has been great is the folie à deux on the part of billionaires Bezos and Musk (I believe that SpaceX and Zip2 are the only companies Musk actually founded, right?) has allowed ego to try to break that cycle for LEO applications. Unless Google or Apple or Amazon can start pumping out satellites for internal use in high volume the overall market will grow slowly (who else is likely to buy a lot of satellites? I'm not sure). And even so that effort will take time to ramp up. If not...hard to see who will take up the slack.
I also look forward to non-LEO applications, like mining. It has its own bootstrap problem.
(note: this post is not directed to you, I'm sure none of this is news to you. rather it's for the benefit of the audience)
ULA is safe for a while due to the DoD's requirement that they keep two domestic methods for space access alive.
Previously this was met with the combination of ULA's Atlas V and Delta IV. Now it'll be the F9 and Atlas V, with the expensive Delta IV being phased out (it's still occasionally needed as it's the largest booster still in operation worldwide).
However ULA's in trouble if another SpaceX shows up. I assume that's why they're working so closely with Blue Origin, better to capture that player now and get a cheap engine provider out of it.
Another input: cost isn't everything; the Atlas V has never lost a payload, while the F9 has. An extra $40m doesn't look like much if your payload is a half billion dollars, for example.
ULA will probably end up encouraging Bezos to build a complete rocket. There are some other players talking about using the BE3 (the tourist rocket engine) as an upper-stage engine, and ULA is likely to use the BE4. At that point, Bezos can market the complete rocket as "You already depend on our engines, why not try our complete rocket?"
You can't really "capture" a billionaire's business.
ULA's only business is selling launches, almost entirely to the US Government, so the subsidy would have to come from their owners - Lockheed and Boeing. I haven't seen any indication that they are at all interested in giving ULA a massive subsidy to gain market share - in fact it looks more like the opposite, they have been reluctant to invest in ULA and have been funding Vulcan development on a quarter-by-quarter basis.
And Lockheed still has to clean up the F-35 fighter mess with cost overruns, cancelled orders, spies taking terabytes of data, and retrofitting already-delivered planes. Not to mention, suspicious accounting of the amount of indirect jobs it supposedly created, and ever-increasing costs as other countries bail or lower their order numbers.
It is the most expensive weapons system purchase to date.
That's logistically impossible to happen. This would require ULA to have the capacity to produce all the launches for the entire market (both domestic and international) which they do not and will not. This sort of monopoly driving out all competitors scenario is only viable if they have the capacity to produce widgets and/or services that is easy to scale to the entire market. Space launches isn't one of those.
You are missing a very important data point: ULA receives nearly a billion dollars a year just to exist. They don't have to deliver a single vehicle. Free tax-payer money being gifted to the highest bidder.
You're mischaracterizing the payment. It isn't for existing, it's for maintaining standby launch capabilities. Being able to launch a military satellite on demand is valuable for national security purposes. So taxpayers are getting something for that money.
(Whether we should be spending so much on the military in the first place is a separate issue.)
I think they'll have some trouble. Those Russian engines they use aren't cheap, aren't getting any more plentiful, the machinery is getting progressively more scarce and the folks who designed/built them are either dead or no longer have sufficient knowledge to recreate them.
Not to mention the supply of those engines is highly predicated on maintaining a solid relationship with Russia for what that's worth.
I disagree. Ashlee Vance spends quite a bit of time talking about how the SpaceX approach differs in his biography of Elon Musk. Basically, Musk turns out to be manically cost aware, and a lot of what SpaceX does is focused specifically on that. One of the examples given are that they figured out how to use stock electronics rather than the very expensive radiation hardened versions that are conventionally used, for a 10:1 cost saving. They've done this throughout their entire system. I'd be very surprised if ULA were able to match.
Trouble for ULA is that they are used to cost-plus contracts. E.g. "I'll pay you 120% what it costs you to make." The incentive to maximize profits here is to maximize costs up to 80% of the highest amount the customer is willing to pay. For example, use obscure materials and manufacturing methods and lots of people in the assembly line. Better still if the rocket is built in parts in lots of different states and shipped around in pieces. Now with competition they have to go back and cut all those costs, which is not going to be easy.
(I used to work for Lockheed, although not in the missiles and space business. I wouldn't hold my breath expecting ULA to match SpaceX's prices.)
Given that musk wants to fund the mars colonization program from the profit margin on commercial launches probably prices won't drop as far as they could. There's likely not going to be an all-out price war.
I kind of agree. But I wonder whether an effective market can really exist for such a specialised service, with so few customers and even fewer suppliers (SpaceX, ULA, Arianespace ...)?
You could argue over the definition of 'effective' in this case but I don't think it'd be a matter of whether the market was big enough. Plenty of companies and countries want payloads delivered and there is choice of suppliers (again we could argue about how much choice is 'true' choice).
My guess is the market friction is political. ISRO (the Indian space agency) has been cheaper than ULA for years, but my suspicion is that the USA wouldn't consider using them for political reasons.
Seed money spent on shares isn't a subsidy because the investor retains the value of the shares. I'm not aware of any implication that SpaceX gets subsidy funding from any external source. Anyway, they have submitted audited accounts of their cost structure to the air force.
It's not just how it's supposed to work (I'm agreeing with you), it's how it often works.
Most of us on here work in software - how many times have we seen tech companies get their products and services deep inside an organization and milk it for years once they have leverage. Once it gets too bad, alternatives begin to come in to the marketplace. These are usually cheaper/better.
But still the practice happens over and over again. This means that those years of milking it is worth it.
Well, that's how it's 'supposed' to work. According to 18th century agrarian economics. Before the telegraph (let alone the internet) enabled businesses to get that large.
But due to collusion, sometime-insufficient regulation (e.g., ad networks that can and do deliver malware), sometime-overbearing regulation (e.g., software patents), and ... well ... the rest of the real world, Adam Smith market economics is exceedingly reductionist. It works in the microcosm. Until you take into account that no economic entity or system is fully enclosed.
For example: has Blackboard yet been toppled, or are they still suing and/or acquiring any potential competitor via its vast patent portfolio, all the while being the absolute worst solution to its problem possible?
I wonder if we could create a simple little Web site people could post markets with virtual monopolies that that would like to see disrupted. It could act as an ideas board for entrepreneurs looking for fertile start-up areas.
It could be a simple post, but with the opportunity to flesh it out out with information on barriers to entry etc,potential market size etc.
You could post about blackboard. I could post about TES.com/jobs which has a virtual monopoly on advertising jobs in the UK teachers market, despite appalling service and ludicrous prices.
I like that they "decided to open up the launch contracts" which is code for "Oh we got sued and lost." :-)
This is a great move for SpaceX and while painful for ULA the results of solid competition has usually been better product from all suppliers. Let's hope that helps make for better rockets.
A group which SpaceX is a member of raised concerns that launches by ISRO are allegedly subsidised by the Indian government and therefore the pricing is anticompetitive but have also acknowledged that the market served by the PSLV is badly serviced by American companies. They're not the only ones to raise the same concern but no-one's seriously crying about being undercut.
Even as it is, the Falcon 9 and PSLV price per kg to LEO are pretty much the same with newer Falcon 9 winning out slightly.
As far as I know, ULA's track record for reliability is much better. Last I read, maybe a few months ago, SpaceX launches had failed 1 in ~19 times, and ULA's failed zero in ~85.
I wonder how the Air Force addressed this issue. Perhaps the cost of failure is less than the premium for reliability; perhaps they evaluated reliability based on something other than the track records (e.g., an engineering review); and of course it's political - McCain, Chair of the Senate Armed Services Committee, is reputedly a strong advocate for SpaceX.
Insurance doesn't reduce the costs of (whatever event you're insuring), it just evens them out. Instead of paying for (e.g.) 1 failure every 25 launches, you pay for 0.04 failures on every launch (plus the insurance company's profit).
Even if an entity is large enough to self-insure, it can make sense to buy insurance if you don't have the internal capacity to estimate the risk accurately. Yes, it might be better to simply hire the risk assessors from the insurance company, but there might be incentive issues. It can also help for external transparency: If the project fails and is self-insured, then people can question whether the risk assessment was correct.
The NRO sometimes has a spare satellite in production, so if one failed somehow, the replacement could be ready relatively quickly, if it was vital to national security. The NRO has transferred surplus hardware to NASA for science missions.
Google Terra Bella (aka Skybox) uses SmallSat (~100 Kg) imaging satellites, and the NRO could use a similar for priority uses where a launch failure wouldn't be as painful as loosing a $1Bn spy satellite. A SmallSat wouldn't be as capable as the larger ones, but has advantages.
The purpose of the EELV program is more about assured access to launch vehicles to get to space, than individual missions being near 100% success.
Atlas V had a partial failure in 2007, cutting down the operational life of the satellites. The most recent Cyngus mission was also nearly a failure when MECO occurred 5 seconds prematurely, but Centaur was able to make up the difference. Atlas I and II also had a healthy number of failures, so the question is whether you consider III and beyond a new vehicle, or a continuation of a single development program.
CRS-7 was certainly a blow to SpaceX. There's no sugar-coating that, but there's no such thing as certainty in space. Even with the stellar Atlas V record, there's still risk.
Also, for this mission, no justification needed to be made, as ULA did not submit a bid. And yes, Falcon 9 went through a lengthy certification process.
If I was launching a $10 billion dollar satellite ULA's very impressive track record would make me strongly consider going with them. SpaceX's reliability going forward is probably going to be better than their reliability up to this point but there's essentially no way they won't lose a single satellite over their next 100 launches.
But these GPS satellites are only in the $100m dollar range according to the internet so it just doesn't make sense to pay an extra $50m to go from 97% reliability to 99.7%.
Plus they have insurance on it. If something goes wrong, they'll still be ahead. I'd bet money, the insurance is far less than the savings by switching to SpaceX.
"You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder. Makes you feel good, doesn't it?" - Rockhound from Armageddon
Which was based on the following quote from actual real person and astronaut John Glenn:
"I guess the question I'm asked the most often is: "When you were sitting in that capsule listening to the count-down, how did you feel?" Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts -- all built by the lowest bidder on a government contract."
The Colorado-based firm plans to eliminate 875 jobs, or about one-quarter of its workforce, by end-2017, so it can better compete against SpaceX and other rivals, including the Jeff Bezos-backed...
Is anyone else here confused by how exactly cutting 1/4 of their workforce will make them more competitive? I get being lean and all that, but still...
You decide on the one or two areas where you have a shot of actually competing, and then you shed as much weight as possible outside those areas.
It's like when IBM sold their consumer PC and laptop business to Lenovo. The analysis was that the consumer business was essentially commoditised and IBMs core value proposition is in high-value-added servers and services -- the laptops were a distraction.
(In reality, IBMs core value proposition is being IBM, so they could probably have carried on selling ridiculously marked up ThinkPads to the enterprise and government market)
SpaceX also does it 40% cheaper with over 38% MORE personnel. You'd think the ULA would be able to reduce costs with all these successful launches. I have a sneaking suspicion they increase the cost each time using the rationalization of, "look how many successful launches we have. You're paying for reliability."
To be fair SpaceX actually build all of their rocket parts themselves from scratch. ULA just assembles them from parts made by third parties, including the Russian engines.
I don't think this is accurate. With the CRS-7 failure, Musk commented on how they hadn't adequately verified component integrity from a 3rd party supplier.
That's true +1. I'm sure they don't make every integrated circuit and piece of electrical wire. My general point still stands, ULA do much less manufacturing in house by a very large margin.
The unverified components were steel rods. SpaceX manufacture most of the complicated parts, but they buy nuts and bolts. Also, the steel rods were checked, but only statistically, not each one. 1 in more than a thousand failed at 5 times lower than its design strength.
I truly hope they can bring down the costs, retain their reliability, and compete. If they got into a price war with SpaceX, it will only benefit all of us.
Wow, the contrast in sentiment between SpaceX vs ULA and Jabil vs Makerbot's Brooklyn factory (https://news.ycombinator.com/item?id=11574215) is striking. With SpaceX undercutting the incumbent, people are cheering free market competition but with Jabil undercutting the incumbents, people are complaining about work being done in buildings attached to the wrong pieces of Earth (China) even though in both cases, they cut costs by using genuinely more efficient processes.
Might be a generally better business strategy going forward, it makes it more difficult to match their price, doesn't get them hooked on higher and ultimately non-sustainable profit margins, etc.
Also, when they publish their prices to normal customers (http://www.spacex.com/about/capabilities), it would look bad if the premium they charge the government for additional costs such as security was too high.
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[ 3.1 ms ] story [ 206 ms ] threadOtherwise, yes.
You might be thinking of the F-111, which was supposed to be all things to all services. That was the 1960s. Or maybe the failed A-12, which was supposed to be an attack plane for all services.
But you're correct, unitary, multi-role fighters have a bad history.
Multirole capability is primarily a function of the weapons an aircraft can employ. This wasn't true in the 70s when targeting pods were binoculars and effective employment of aircraft in strike roles required decent performance in low-and-slow flight regimes, but we've been living with pods and PGMs coming out of our ears for 25 years now. Design tradeoffs for multiroles today are primarily those of cost and maintainability. You can pay out the ears and get larger twin-engine multiroles that strain logistics and wallets, opt for a single-engine F-16alike multirole that'll do everything nearly as well except for flying really high and really fast, or inexplicably go Eurocanard to pay F-22 prices for sub F-35 capabilities. Anyway, the point is that it's next to impossible not to make a multirole these days even if you're trying; if you can employ weapons with your jet, you're multirole.
The F-5E/F Tiger [0] was one of the most under appreciated fighters on the market in the 70s and early 80s. The was limited in A/A victories in real combat because of lack of opportunities, although successfully used at TOPGUN and FWS at a low operating cost. Although marketed as a LWF, The F-5 was actually a multi-role aircraft, and used in combat as a strike aircraft.
IMO the F/A-50 [1] is the most under-appreciated advanced 4th gen fighter on market. At around $30m its half the cost of a new F-16, although a refurbished F-16 is viable for budget constrained Air Forces.
[0] https://en.wikipedia.org/wiki/Northrop_F-5
[1] https://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle
You're thinking of the first generation of what became the SR-71, which was made for the CIA, and used a different numbering scheme: https://en.wikipedia.org/wiki/Lockheed_A-12
Similarly, the A-12 was also a Navy program, not a joint project. The Air Force considered buying it (had it been funded to completion by the Navy) as a replacement for the F-111, but this consideration was largely superficial, and they had little to no input into it's design.
Not IMHO: The launch is a single, controlled, predictable task; they can choose their exact launch time and location for optimal performance; have extensive quality control checks and engineering, a room full of support engineers, etc; the exact route and timing of the launch is carefully planned ahead of time, etc.
The plane has to handle every contingency of war: Take off from wherever and whenever needed, fly anywhere, refuel in mid-air, dodge enemies trying to kill it (can SpaceX or ULA do that?), destroy enemies trying to avoid it, return safely home, etc.
And all of those problems are (supposedly) solved by the time the plane is being manufactured.
Your argument regards R&D costs, not manufacturing costs.
I thought dogfighting was nolonger required in this day and age?
I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business.
Exciting times...
That would be blatantly anticompetitive dumping, by the textbook definition.
An alternate end-game would be ULA stringing together a few contract wins, pushing SpaceX to the brink, and then ol' Elon gets a nice offer from Boeing and Lockheed...
You wanted that to be blue ok, that's an extra 2 million.
It's certainly not obviously more efficient or quicker reuse, it's likely to be slower and far more costly if they actually do manage it, so saying it is more efficient is just a way for ULA to try to sound like they are still a contender, even out their launches are still significantly more expensive and they haven't even tried to reuse engines.
Also, they're at totally different places along the technological readiness curve. They're proposing a theoretical concept, SpaceX has already recovered two first stages. Even if their parachute concept was theoretically superior (which I don't think it is) by the time they got it working, SpaceX would have years of operational experience with hoverslam.
http://www.spacex.com/missions
"Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of."
http://www.wsj.com/articles/peter-thiel-competition-is-for-l...
I.e. both of which provided by a de-facto ultimate monopoly which can afford "luxuries" like basic research because they don't have to worry it won't pay off next quarter.
> (...) and venture capital.
I want to see VC-sponsored ambitious research projects. VC-money-induced thinking is very short term.
Isn't that exactly what YC research is?
I am not necessarily a fan of monopolies, but I think we owe it to ourselves to understand the tradeoffs and consider alternatives. E.g. how do you do basic research if there is so aggressive competition and shareholder look only 3 months ahead.
It is also worth nothing that the case of ULA isn't necessarily a case of merely monopoly but also how how that monopoly works. E.g. being a monopoly shouldn't require a cost plus contract. Secondly GM and the other big three are certainly not monopolies but have not proven any more capable than ULA in competing with Tesla in creating an electric car.
SpaceX is beating lots of other rocket companies which aren't necessarily monopolies. I think it is easy to overstate how bad ULA is when perhaps it is really about how good SpaceX is ;-)
Also remember the Russians also operated government monopolies for rocket building and yet managed to build considerably cheaper rockets than the Americans. I think there is a lot more to this issue than whether it is prive/public or a monopoly.
Put simply, monopolies do have greater capacity to innovate. When you're stuck in brutal competition, it's hard to funnel money into research which might not pay off for decades—your competition might have driven you out of business by that point.
On the other hand, the allure of monopoly profits is hard to ignore. It's tempting to simply funnel the profits into shareholder pockets and that's the approach investors will generally favor. For any middling CEO, it's the path of least resistance.
This is why founder-controlled monopolies (Google, Facebook, Amazon, etc.) are such a potent force. They have the incentive to preserve the companies long-term legacy (it's their personal legacy as well) through ambitions projects while also having the credibility and power to resist investor preferences for short-term profits.
There's also a big difference between natural monopolies (like electricity or gas distribution networks) and IP monopolies. Monopolies that are established by providing a vastly superior product require continuous R&D investment to maintain and natural monopolies do not.
This means little reinvestment, little customer service, and a product/service only good enough to keep the conservative party from admitting that sometimes a little regulation is necessary (aka just about never).
That analogy is not applicable here because PT is referring to businesses who capture market by innovation and growth and become monopolies. I am reasonably sure PT is not referring to monopolies like USPS/AT&T/COMCAST/Cable Companies who have become monopolies using government's coercive power.
If you are running a business where your only customer is government and you are a monopoly I don't think anyone cares about innovation much. I would love to see counter examples if you have any.
With an arguable rare exception being AT&T from the early 20th century up until about ~1980 perhaps, nurturing within it the renowed Bell Labs and its predecessor(s).
There are of course exceptions - like Elon, who has and for whom the profitability of the company is only a secondary, supporting concern.
I do. In the '90s I was working for a company that was used to bidding cost plus contracts when DoD contracts pretty much dried up as a result of the collapse of the Soviet Union. Management tried very hard to realign the company to compete in the commercial sector and failed miserably.
Changing the focus of a large organization like that from performance to cost is extremely difficult. Your people aren't organized properly, your finances aren't organized properly, and you have a cost+ culture that's hard to kick.
A much cheaper and safer strategy is to get Congress to wire defense contracts for you. ULA has manufacturing all over the place. What that means is job losses at ULA will be politically unpalatable. Beyond that, a logical argument can be made against putting all the national space eggs in one basket.
If that argument actually carried any weight, then ULA wouldn't exist, but Martin, McDonnel Douglas Aerospace, and GD Convair would. That is, the DoD and the defense companies trot out any arguments they feel like, and hope that Congress accepts them.
I concur on your analysis of companies that are fat and happy bidding and working on DoD contracts. It's really, really hard to turn those companies around.
Times have changed. I think Congress may have seen the error of its ways on this one.
Either that or Congress realized they can't sweep under the rug how much taxpayer money they could be saving.
Individual congresspeople might see why a past decision did or did not work out well in the long run. That's very different from seeing whether the same decision is politically expedient in the present moment. Nor does it necessarily imply that Congress as a whole is even capable of forming stable memories that can reliably retain that sort of knowledge.
The other issue is capacity. Even if ULA dramatically cut their costs to drive SpaceX out of business, that will stimulate a huge surge in demand for launches. To drive anyone out of business, ULA would have to meet all of that demand on their own. I don't believe that's possible for them, they just don't have the capability to ramp up capacity fast enough, so SpaceX and other operators would pick up the excess business anyway.
If only that were true. It does happen in many markets, but not currently in the space market. Space is still in the early-stage / chicken-and-egg mode. A bit of simple value chain analysis shows why.
TL;DR: we may be closer than I think to the space business moving into traditional economics, but even then it's probably decades out.
There are three disjoint space markets: - military: largely price insensitive; volume unknown to me but not enormous; has specialized needs so a lot of it couldn't be satisfied by COTS launch systems - science: some of which (earth sensing) can use COTS, the rest is low volume, has non-commercial requirements (e.g. non-LEO) and often has weird timing constraints depending on what the orrery says. - commercial, which is what we all want to explode in volume! Today this is 100% LEO.
Science is largely the space side of NASA and I personally am convinced congress only funds in order to provide enough economic volume that the contractors are available to support the military. I.e. a fig leaf for the military just like the DoE (whose hands are all over space science as well).
So commercial: the chicken and egg problem the compound of two (used to be three, see below) issues: launches are rare and expensive, so satellites are few and far between, which makes them expensive, which doesn't encourage volume, which doesn't encourage launch capacity development, which keeps them expensive... This is one of the reasons why previous private efforts (e.g. Rotary Rocket) have foundered. Despite what my libertarian friends say, it's almost impossible to break out of this trap without government incentive; the activation energy is too high.
Now almost is not the same as 100% and this is where I'd like to believe and agree with you. And I do agree, except the time base I believe in is too slow to support the phrase "huge surge in demand"
One thing that has been great is the folie à deux on the part of billionaires Bezos and Musk (I believe that SpaceX and Zip2 are the only companies Musk actually founded, right?) has allowed ego to try to break that cycle for LEO applications. Unless Google or Apple or Amazon can start pumping out satellites for internal use in high volume the overall market will grow slowly (who else is likely to buy a lot of satellites? I'm not sure). And even so that effort will take time to ramp up. If not...hard to see who will take up the slack.
I also look forward to non-LEO applications, like mining. It has its own bootstrap problem.
However my main point is still true: today commercial and non-commercial applications have quite different needs and thus different economic drivers.
ULA is safe for a while due to the DoD's requirement that they keep two domestic methods for space access alive.
Previously this was met with the combination of ULA's Atlas V and Delta IV. Now it'll be the F9 and Atlas V, with the expensive Delta IV being phased out (it's still occasionally needed as it's the largest booster still in operation worldwide).
However ULA's in trouble if another SpaceX shows up. I assume that's why they're working so closely with Blue Origin, better to capture that player now and get a cheap engine provider out of it.
Another input: cost isn't everything; the Atlas V has never lost a payload, while the F9 has. An extra $40m doesn't look like much if your payload is a half billion dollars, for example.
You can't really "capture" a billionaire's business.
I also wonder just how much of the technology and the pace of development we're seeing from SpaceX hasn't originated from the military themselves.
THAT has to end. Then let's see them compete.
I'm in for $999M
Remove that subsidy and they implode instantaneously. Their cost per launch would be just about the highest in the world.
Not to mention the supply of those engines is highly predicated on maintaining a solid relationship with Russia for what that's worth.
(I used to work for Lockheed, although not in the missiles and space business. I wouldn't hold my breath expecting ULA to match SpaceX's prices.)
ULA is working on reusability of at least the engine in its vulcan rockets that will replace Atlas and Delta in 2019:
https://spaceflightnow.com/2015/04/13/ula-unveils-its-future...
the plan is for vulcan to cost about 50% of an atlas V... so about 80-100m
My guess is the market friction is political. ISRO (the Indian space agency) has been cheaper than ULA for years, but my suspicion is that the USA wouldn't consider using them for political reasons.
Most of us on here work in software - how many times have we seen tech companies get their products and services deep inside an organization and milk it for years once they have leverage. Once it gets too bad, alternatives begin to come in to the marketplace. These are usually cheaper/better.
But still the practice happens over and over again. This means that those years of milking it is worth it.
But due to collusion, sometime-insufficient regulation (e.g., ad networks that can and do deliver malware), sometime-overbearing regulation (e.g., software patents), and ... well ... the rest of the real world, Adam Smith market economics is exceedingly reductionist. It works in the microcosm. Until you take into account that no economic entity or system is fully enclosed.
For example: has Blackboard yet been toppled, or are they still suing and/or acquiring any potential competitor via its vast patent portfolio, all the while being the absolute worst solution to its problem possible?
I wonder if we could create a simple little Web site people could post markets with virtual monopolies that that would like to see disrupted. It could act as an ideas board for entrepreneurs looking for fertile start-up areas.
It could be a simple post, but with the opportunity to flesh it out out with information on barriers to entry etc,potential market size etc.
You could post about blackboard. I could post about TES.com/jobs which has a virtual monopoly on advertising jobs in the UK teachers market, despite appalling service and ludicrous prices.
This is a great move for SpaceX and while painful for ULA the results of solid competition has usually been better product from all suppliers. Let's hope that helps make for better rockets.
Even as it is, the Falcon 9 and PSLV price per kg to LEO are pretty much the same with newer Falcon 9 winning out slightly.
If I have seen further, it is by standing on the shoulders of giants.
I wonder how the Air Force addressed this issue. Perhaps the cost of failure is less than the premium for reliability; perhaps they evaluated reliability based on something other than the track records (e.g., an engineering review); and of course it's political - McCain, Chair of the Senate Armed Services Committee, is reputedly a strong advocate for SpaceX.
Insurance doesn't reduce the costs of (whatever event you're insuring), it just evens them out. Instead of paying for (e.g.) 1 failure every 25 launches, you pay for 0.04 failures on every launch (plus the insurance company's profit).
So the payloads' costs still apply.
Google Terra Bella (aka Skybox) uses SmallSat (~100 Kg) imaging satellites, and the NRO could use a similar for priority uses where a launch failure wouldn't be as painful as loosing a $1Bn spy satellite. A SmallSat wouldn't be as capable as the larger ones, but has advantages.
The purpose of the EELV program is more about assured access to launch vehicles to get to space, than individual missions being near 100% success.
CRS-7 was certainly a blow to SpaceX. There's no sugar-coating that, but there's no such thing as certainty in space. Even with the stellar Atlas V record, there's still risk.
Also, for this mission, no justification needed to be made, as ULA did not submit a bid. And yes, Falcon 9 went through a lengthy certification process.
But these GPS satellites are only in the $100m dollar range according to the internet so it just doesn't make sense to pay an extra $50m to go from 97% reliability to 99.7%.
The only problem would be a long delay....
"I guess the question I'm asked the most often is: "When you were sitting in that capsule listening to the count-down, how did you feel?" Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts -- all built by the lowest bidder on a government contract."
Cheapest != worst, see SpaceX.
Is anyone else here confused by how exactly cutting 1/4 of their workforce will make them more competitive? I get being lean and all that, but still...
It's like when IBM sold their consumer PC and laptop business to Lenovo. The analysis was that the consumer business was essentially commoditised and IBMs core value proposition is in high-value-added servers and services -- the laptops were a distraction.
(In reality, IBMs core value proposition is being IBM, so they could probably have carried on selling ridiculously marked up ThinkPads to the enterprise and government market)
Surely they must have had some idea what their competition would charge from historical bids, so why not come in at a 30% or even 20% discount?
Also, when they publish their prices to normal customers (http://www.spacex.com/about/capabilities), it would look bad if the premium they charge the government for additional costs such as security was too high.