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ULA’s CEO advocates old way of doing things

In a webinar yesterday the CEO of ULA, Tory Bruno, argued that there is too much money being invested in new rocket companies and the money would be better spent developing in-space activities instead.

To be attractive to investors, these new space activities should be dual-use with both commercial and national security applications, Bruno said.

The launch market is becoming dangerously “overheated” for a couple of reasons. One is simply that there are too many launch companies chasing a “more or less fixed size” pool of customers, Bruno said. In the large rocket market, he said, prices are falling and the demand for satellite launches “has remained stubbornly inelastic.”

“It’s down to a third or even a fourth of the cost of what access to space was just a handful of years ago,” Bruno said. “Yet we have seen no increase in the overall size of the launch market nor have we seen a corresponding tripling or quadrupling of space activity.”

While Bruno is correct when he says that there are likely too many new launch companies, he is so wrong about his belief that the customer base “has remained stubbornly inelastic” that he is practically in the wrong galaxy. The lower costs he complains about are exactly why there is so much investment capital being poured into the new launch companies, because those investors see those lower costs attracting many new customers, something that is demonstrated by the growth of the launch rate in the past few years (something that I expect will explode in the next two years).

Many of these new companies will fail, for any number of reasons. No matter. A large number will succeed, and attract more than enough customers to make a profit.

What Bruno really is complaining about are the new lower launch costs. ULA can’t match them, and for this reason faces a crisis in that it might not be able to attract any customers at all in the coming years, even with the introduction of its new Vulcan rocket. And though Bruno has done a good job trying to make ULA competitive in this new market, he appears to have generally failed to change the company significantly. For example, why hasn’t ULA tried to market its Atlas 5 and Vulcan rockets for multi-payload smallsat launches, as SpaceX did with the recent launch of 143 smallsats on one Falcon 9? I can’t think of any reason why ULA’s rockets couldn’t do the same. Yet the company has done nothing to try to market itself to this smallsat industry. Instead, they have let Rocket Lab, Virgin Orbit, and now SpaceX grab it, along with at least four or five new smallsat rocket companies about to do their first launches.

Instead, Bruno advocated during this webinar that the federal government get involved, acting to encourage investors to leave the launch market and instead focus on building companies that only do things in space.

What a deal! The government helps to limit the number of new rocket companies, thus protecting ULA’s market share. ULA in turn can continue to charge its high prices, because the new in-space companies the government subsidized will have few launch options. In fact, the high launch prices that would result from a smaller launch market would likely force the federal government to also subsidize the launch costs for the new in-space companies so they can even afford to get to orbit.

All for the benefit of old big space companies like ULA, who for decades did nothing to innovate or lower the cost to launch.

I think what Bruno is really signaling to us here is that he is not hopeful for the future of his company in today’s present competitive free market, and is thus advocating government intervention to save his company.

Pioneer cover

From the press release: From the moment he is handed a possibility of making the first alien contact, Saunders Maxwell decides he will do it, even if doing so takes him through hell and back.

 
Unfortunately, that is exactly where that journey takes him.

The vision that Zimmerman paints of vibrant human colonies on the Moon, Mars, the asteroids, and beyond, indomitably fighting the harsh lifeless environment of space to build new societies, captures perfectly the emerging space race we see today.

He also captures in Pioneer the heart of the human spirit, willing to push forward no matter the odds, no matter the cost. It is that spirit that will make the exploration of the heavens possible, forever, into the never-ending future.

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8 comments

  • Joe

    If we follow Tony’s approved path the Mini-Cubes (my company) can go ahead and close its doors. The competition in the launch market allows us to fly. If I had tried this even ten years ago it would have been too expensive to even take the chance on it. Now, myself and lot of small ‘in space’ companies have at least a shot at sticking around.

    Tony, the world has changed. Either change your company or shut it down. Don’t block everyone else.

  • Trent Castanaveras

    What Mr. Bruno really needs to do is get that ACES upper stage run through its paces while ULA still has the military money influx to do so. The obvious next step after cheapening the cost to orbit is building the “highway” infrastructure in cis-lunar space. I would think being in the lead in transport solutions would open their way into the future, financially speaking.

    Gee, they could probably even do iterative tests with existing launch contracts without impacting their service level and contract success rates!

  • Jeff Wright

    No-the smart thing was to have never built Vulcan-and to have Biden sign a treaty to only allow hydrogen/oxygen cores; solid strap-ons and escape towers excluded. That gives new life to ACES, Delta IV, SLS, and Ariane. Russia will have to at least bring back Energia-M….the Greens will like the cleaner fuels, with hydrocarbon kerolox/metholox rockets off the table. Treaties don’t need as many votes, right? And all it takes is for Gary Church to start a daily kos or change.org page. One more reason to do as Hillhouse suggested-and have New Space and Old quit fighting before things REALLY get ugly.
    Just Games Theory, of course…signed, publiusr

  • Richard M

    Tory *is* an Old Space guy, albeit an unusually personable and energetic one. But it has to be borne in mind that he has to answer to Boeing and LockMart, the sole stakeholders in United Launch Alliance. Certain strategic avenues are closed off to him.

    I suspect, too, that what he has in mind cheifly is the GEO market, where demand *has* been soft. It’s also where ULA (and Boeing and LockMar before it) did most of its modest commercial business, when it had any. But there’s clearly been growth in LEO, thanks to internet constellations and smallsats and cubesats, where SpaceX does seem to have created some new demand, and not just through its own constellation. Multiple vendors in the last rideshare mission explicitly said that SpaceX’s prices were so low that they were gamechangers.

  • Richard M

    <i”And all it takes is for Gary Church to start a daily kos or change.org page.”

    May the Lord save and preserve us!

  • Edward

    From the Space News article: “The U.S. government benefits from private investment in space and should try to re-direct the focus to new areas, said Bruno. In-space factories and mining, he said, are examples of activities that could stimulate demand for launch services and support both commercial and government goals.

    ULA is the one to cancel its Xeus spacecraft, and they are the ones developing ACES, as noted by Trent Castanaveras, in his comment above. Five years ago, what Bruno desires was his company’s vision of the future, fueled by the low cost of space access that he now laments.
    https://www.youtube.com/watch?v=uxftPmpt7aA (7 minutes, “ULA: CisLunar 1000”)
    “We’re going to change the paradigm of lift that makes it possible to access that.” — Tory Bruno

    What happened to his company’s vision of the future? Five years ago, ULA was talking like they were going to lead the way to industry in space. Now Bruno says that it is up to government to make this possible.

    My words of advice to Tory Bruno: If you let government be in charge, all you will get is what the government wants. If you take charge, you will get what you want. Take charge, Mr. Bruno, otherwise other companies will. Make that vision of just a few years ago a reality, and quit depending upon a government monopsony. Unlike your company, the government is not a visionary.

  • Dean Hurt

    If it was left up to NASA, Tony Bruno and others of the “take it slowly” ilk we’d still be laughing Mercury 1-man capsules into short sub-orbital flights. And not many of those, and not safely! Slow and incompetent! Whenever NASA got a fire lit under it’s collective butt in the past, space craft blew up and Americans died, eg. Challenge (1986) and Columbia (2003).
    Victory goes to “the Bold”! America now has it’s own new space vehicle after decades, Crew Dragon, because Elon Musk and his merry band of bold innovators stepped up and just did it…because they could! Mankind will conqueror the planets and the stars eventually, but it won’t be through incompetent and cowardly government entities like NASA.

  • Edward

    Dean Hurt,
    Right on! The problem with leaving it up to NASA is that they are a government institution, controlled by politicians. For three decades, we thought that NASA was there to continue the American tradition of exploration and expansion, this time into space rather than into the American Northwest Territory and plains. It turned out that our presidents were not interested in advocating space expansion and that Congress was not interested in funding it.

    Fortunately, some Americans still have the pioneering spirit. Bezos wants to pioneer the Moon, Musk wants to pioneer Mars, and ULA had a vision of pioneering cislunar space (the region around the Earth out to the Moon’s orbit, or a little more). As has always happened with space exploration, they will likely discover or invent things that are useful to us on Earth.

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