Another look at why ULA’s CEO stepped down


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Why did ULA’s CEO step down, and did SpaceX or the Atlas 5’s dependence on Russian engines play a part?

Very worthwhile reading, as it suggests that not only is the competition from SpaceX a major factor, so was ULA’s effort to monopolize the military launch industry as well as monopolize its access to the Russian engines, denying their use by Orbital Sciences.

And to this I say, thank god for competition. It always shakes things up in a good way.

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5 comments

  • Kelly Starks

    >…ULA has been something of a cash cow for parent companies Boeing and Lockheed Martin, contributing heartily to the bottom line on the strength of its lucrative, but shamelessly monopolistic control of U.S. military space launches….[ as to the Atlas-V relying on the Russian built RD-180 engines rather then a US built version, or developing a competing engine]
    >….ULA has effectively supported the Russian aerospace industry while damaging the very U.S. industry it claimed the subsidies were necessary to protect……..the reaction to Russian threats over limiting access to the RD-180 have underscored in very bold colors just how badly the United States has sold itself short in failing to insist, as first Lockheed Martin and then ULA assured us they could, that domestic production of the engine be initiated. ……Will the company, eternally at the mercy of parent companies Boeing and Lockheed Martin, begin to undertake take the dramatic changes necessary to compete with SpaceX on what is slowly becoming, against its best efforts, a more level playing field?…… Or will the company double down on political maneuvering as substitute for innovation …..Lockheed Martin has been in the driver’s seat [of ULA] from the outset, and remains firmly planted in
    > that role. …an unchained Boeing would have …

    Boeings basically divesting itself of the old McDonnell Douglas space industrial capacity, since theirs no damn money in it. Pretty much all the customer base gave a resounding no to CATS designs, and just running off old Delta’s and Atlas’ for trivial amounts of money, and no real growth prospects just didn’t interest Boeing execs. Hell Boeing tried with 787 to develop the craft without a serious in house engineering staff (that blew up in their face) since its damn hard to interest engineers to hang around for so few projects or investors in paying to keep them on staff. Effectively Boeing looks like they were trying to just contract out all their engineering to other firms. Like with the RD-180s, were deciding not to be builders, but just buyers.

  • Dick Eagleson

    If the bottom line of all this is that today’s Boeing ain’t exactly your father’s Boeing, then we agree. In that case maybe you’d like to reconsider your support for SLS. It’s today’s Boeing that’s building it.

  • Kelly Starks

    Actually two botomlines.

    #1 – Space is seen by investors as having no real market growth potential. So Boeing can’t see it really worth bothering with. Given their yearly ULA profits likely less then that for a single 7?7 sale.

    #2 – they rae not our daddy’s Boeing/McDac/Rockwell/etc-all-the-other-space-companies-they ate. But they are about all that’s left in the industry. Cancel SLS and they, and pretty much all the rest of the industrial base to build and operate such things, gets layoff notices. Just like we’ve lost the vast bulk of our aircraft industrial capacity – we could well lose even more of our spacecraft capability.

  • Dick Eagleson

    Space is seen by investors as having no real market growth potential.

    No it isn’t. SpaceX, of course, famously has a lot of VC money and Vinod Khosla has been doing a lot of space-related deals lately including at least one launcher startup, Rocket Lab. Investors have no confidence that the old-guard dinosaur aerospace contractors can do anything useful of affordable in space anymore, but that’s a different matter altogether.

    Given their yearly ULA profits likely less then that for a single 7?7 sale.

    On another thread I responded to another of your comments poor-mouthing ULA’s profit contributions to its parent companies by posting a link to a Motley Fool piece that said ULA contributes about $300 million a year straight to Boeing’s bottom line. I think they’d have sell 20 or 30 747’s or 777’s to clear that much profit.

    they rae not our daddy’s Boeing/McDac/Rockwell/etc-all-the-other-space-companies-they ate. But they are about all that’s left in the industry.

    No they’re not. There are dozens of NewSpace companies ready to take over from the superannuated dinosaurs of aerospace. The three remaining majors, Boeing, LockMart and Northrop-Grumman, will probably last quite awhile just on their defense and commercial airplane businesses. But space is going commercial and they seen ill-equipped to follow. If this “industrial base” can’t do anything in space that is both new and usably inexpensive, then it needs to go as it’s no damned use to us anyway.

  • Kelly Starks

    >>Space is seen by investors as having no real market growth potential.

    > No it isn’t. SpaceX, of course, famously has a lot of VC money…

    Musk boasts about that, but the financial records disagree. He admits without the COS win about …7 years ago? SpaceX would have gone under, and NASA and DOD contract funds pretty much paid his bills.

    Actually reports are now that a fail to win CCDev could force him under to. Hence the sudden and abrupt 10% layoffs recently.

    >..Vinod Khosla has been doing a lot of space-related deals lately including at least one launcher startup, ..

    Who? What.

    Anyway, I was refuring to the industry investors – like the stockholders owning the big firms. They basicly offered to hand the CEOs their head on a plater if they spent the money to develop something even a fraction as expensive as a airliner without solid anchor tennet orders in hand. Something no ones been able to get.

    > a Motley Fool piece that said ULA contributes about $300 million a year straight to Boeing’s bottom line. ..

    Boeings bottom line was $50B a year last time I heard. The retail cost of one of their airliners is over $300M. Its hard to justify the effort for a ULA for just that. Though it does seem to still kida want to keep their hand in.

    Given ULS flights are something like $200M-$400M each, and they only fly a couple times a year – $300M is higher then I’ld expect?

    > I think they’d have sell 20 or 30 747′s or 777′s to clear that much profit.

    No they retain for close to $400M a peace (give or take bulk order disconuts) and I really dout their profit margin pure in in the single digit %.

    >> they rae not our daddy’s Boeing/McDac/Rockwell/etc-all-the-other-space-companies-they ate. But they are
    >> about all that’s left in the industry.

    > No they’re not. There are dozens of NewSpace companies ready to take over from the superannuated
    > dinosaurs of aerospace. ..

    LOL!! Yeah that’s like saying Dans custom cars can fill in for losing GM and Ford. Even the bulk of the NewSpace firms know they can’t play at that level of capability for a long time.

    >… space is going commercial..

    Really? How is NASA a commercial market? And how is wining contracts the big guys were ordered not to bid for – being competitive with them?

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