Why ULA picked Blue Origin’s engine over Aerojet Rocketdyne
In an interview of ULA’s CEO Tory Bruno by Eric Berger of Ars Technica, he subtly revealed why his company in the end favored Blue Origin’s BE-4 rocket engine over Aerojet Rocketdyne’s AR-1 in the design of the Vulcan rocket.
Unlike many of the new entrants that you talk about coming in today, we’re not a startup company living off investor capital; we’re a mature business. We have to close a business case on Vulcan itself. So where our strategic partners [Editor’s note: This is a reference to Blue Origin] brought investment as well as schedule, that was a pretty important factor. It became pretty obvious what the right choice was, and we arrived at it with our stakeholders.
In other words, Blue Origin’s willingness to invest its own capital in engine development was a major factor. Aerojet Rocketdyne was using the old model of big space, whereby all development money came from the government. It had been unwilling to commit any of its own funds to engine development. This reluctance implied it wasn’t really committed to the project. If Air Force funding disappeared, they’d back out, leaving ULA in the lurch.
This tidbit from Bruno also suggests that he and the management at ULA are sincerely working to reshape ULA from an old big space company, totally reliant on the subsidies given by the government, into a modern competitive company focused instead on building an affordable product that customers will want to buy.
This story also tells us a lot about Aerojet Rocketdyne’s future, or lack thereof. The rocket industry is changing, and if that company doesn’t change also, it will soon die.
Readers!
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In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
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In an interview of ULA’s CEO Tory Bruno by Eric Berger of Ars Technica, he subtly revealed why his company in the end favored Blue Origin’s BE-4 rocket engine over Aerojet Rocketdyne’s AR-1 in the design of the Vulcan rocket.
Unlike many of the new entrants that you talk about coming in today, we’re not a startup company living off investor capital; we’re a mature business. We have to close a business case on Vulcan itself. So where our strategic partners [Editor’s note: This is a reference to Blue Origin] brought investment as well as schedule, that was a pretty important factor. It became pretty obvious what the right choice was, and we arrived at it with our stakeholders.
In other words, Blue Origin’s willingness to invest its own capital in engine development was a major factor. Aerojet Rocketdyne was using the old model of big space, whereby all development money came from the government. It had been unwilling to commit any of its own funds to engine development. This reluctance implied it wasn’t really committed to the project. If Air Force funding disappeared, they’d back out, leaving ULA in the lurch.
This tidbit from Bruno also suggests that he and the management at ULA are sincerely working to reshape ULA from an old big space company, totally reliant on the subsidies given by the government, into a modern competitive company focused instead on building an affordable product that customers will want to buy.
This story also tells us a lot about Aerojet Rocketdyne’s future, or lack thereof. The rocket industry is changing, and if that company doesn’t change also, it will soon die.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
I said this elsewhere but using a competitor to supply engines points to ULA looking beyond launch for deciding what business they are in. The launch market is very limited but there could be a lot more opportunities for space based products in the not so distant future.
I don’t necessarily disagree but it could also be that they don’t have the money to invest.
I’ve pointed this out before too but it bears repeating. AR has a talented workforce with a lot of institutional knowledge. They may not be the industry leader but they still possess a workforce with skills that other companies who would like to enter the space industry do not have. They might have some limitations based on the current health of the company, but they do have some potential advantages should they choose to focus on a different part of the space industry. They question is whether or not their leadership has the uh, intestinal fortitude, and creativity to make the change. (I almost broke the no profanity rule)
I dunno about “leadership.” I think they’re just broke. \
Consider. Rocketdyne was spun off as a separate branch of North American Aviation back in 1955. Then and the rest of North American got bought up by the Rockwell Corporation in 1967. Boeing bought it and most of the rest of Rockwell in 1996. Boeing sold Rocketdyne (minus its Santa Susana field labs) to Pratt and Whitney in 2005, P&W sold it to GenCorp (once known as General Tire and Rubber) in 2013; GenCorp merged Rocketdyne with its already downsized competitor Aerojet to form Aerojet Rocketdyne.
In every incarnation, Rocketdyne has been a typical American aerospace firm — it’s customers have been US government agencies or other firms dealing with governments, and by commercial standards it’s grossly undercapitalized. Great workforce, immensely skilled and professional, but the physical plant’s a bit rundown and the assembly lines aren’t set up for mass production — that kind of thing.
The point being that Rocketdyne has spent sixty years being the tail on some corporate dog. It’s never been an independent entity; it’s never glommed onto a mass of valuable real estate; it’s never built up it’s own separate pile of cash or other assets; it’s never dealt with ordinary commercial customers, let alone the general public. Furthermore, like other defense firms, its history has been shaped by 50 years of now-gradual now-rapid decline with only occasional rises in DoD spending. Finally it’s a manufacturing firm enmeshed in an economic system run by financiers who have little use for manufacturing firms in general — in practical terms, the company is on a very tight financial leash.
Space-X doesn’t work this way, you want to tell me? Blue Origin doesn’t. Sure, but they’re not typical aerospace firms. They’ve got single self-sufficient billionaire owners to answer to, not a batch of accountants at an outfit like Bain Capital, intent on ripping out every penny of profit to enrich Bain’s shareholders. They can set their own profit margins, and line up financing on their own terms, without being bled to support other entities. Suppose Space-X had to subsidize Tesla, or Blue Origins got tapped to finance expansion of Amazon Web Services — would they look like New Space Winners to anyone?
Nice post, Mr. Shupp
A couple of other thoughts. Whatever professional skills Rocketdyne engineers have, they have never had to compete on costs or schedules. Their model has been flexible deadlines and “customer will absorb the costs.”
Companies like SpaceX might not want to hire them, for precisely this reason. Musk just fired a bunch of engineers on Starlink communications; they’d been hired from Microsoft, and were still in the mindset of long development schedules. I’ve run into this in job interviews myself; interviewing managers were not interested in people who had worked at the big tech dinosaurs. (I’ve worked at IBM and Nortel Networks.)
Second, has ULA or any of its purchased companies designed or built any rocket engines lately? They certainly didn’t build the RD-180s on Atlas V. BO will have the advantage of building for two rocket companies, which may provide some economy of scale. A couple of years ago, I read that SpaceX was build about 300 Merlin engines a year. BFR/BFS will probably need more Raptor engines than that. Any new-space launcher that wants to stay in business will have to be competitive on price, availability, and scheduling; Rocketdyne would be at a severe disadvantage on all these factors.
Shupp, no firms set their own profit margins. The market does that with such being negative often. We try and determine gross margins we’d like to have but that’s about all as the customer/market ultimately decides what we make.
wodun,
AR once had the sort of workforce you describe, but I think the real masters with all the secret knowledge who once labored there have largely decamped for greener pastures in recent years. Tory Bruno gave a speech over 3 years ago in which he addressed the issue of why he went with BO as his default engine provider with AR being the backup. He noted that he “saw a lot of familiar faces” when Bezos took him on a tour of BO’s Kent, WA factory. One guess where he had originally seen all those familiar faces.
mike shupp,
Entirely agree about no part of AR ever really having had to stand up on its own. I’ve made the same point in the past myself. The company simply doesn’t grok being an independent entity. That’s why it’s been doing almost nothing smart since it wound up out in the cold and on its own.
This isn’t exactly unprecedented in American business history. A particularly egregious example that comes to mind is that of the implosion of the Delorean Motor Company. The late John Delorean made his bones running steadily bigger divisions of GM, finally winding up head of the Chevrolet division, but he had never run the whole company. Turns out there were quite a few tricks he had never had to try and he was an insufficiently quick study. The man simply didn’t know what he didn’t know.
The indictment of financiers is a bit too broad-brush. There are increasing numbers of new, small, hi-tech manufacturing start-ups in the U.S. Like most start-ups, they get seed money from venture capitalists, not conventional banks. “Financiers” come in many flavors and are not uniformly interchangeable by any means.
There have been, and still are, a lot of mature manufacturing companies that financiers would be well-advised to fight shy of – AR for example. If bankers have been less than enthusiastic about lending to American-based manufacturing concerns in recent decades it’s because the U.S. corporate tax rate – made high and kept that way by Democrats – completely distorted decisions about where to site new manufacturing capacity. Now that Trump has achieved a more rational tax code, a lot of the off-shoring that only made sense as a result of the former dysfunctional corporate tax code is reversing.
Dumping on Bain Capital, in particular, is also wrong-headed. Bain actually has a pretty good overall track record of saving the companies it buys from oblivion and refitting them for the modern competitive environment.
It has certainly had some notable failures to thrive, though. There was, for example, a steel company about which much noise was made during Mitt Romney’s run for President in 2012. The main problem there was intransigent unionists who were still under the impression it was the 1950’s when they could get pretty much whatever they wanted.
I saw this kind of blinkered idiocy up close and personal when I was part of an IT consulting team working at another now-defunct, but once mighty, steel company far larger than the one Bain tried and failed to save. Bethlehem Steel was 75 years old when I encountered it in the late 70’s. It was as crotchety, creaky and set in its ways as many 75-year-old human beings are. The average age of its employees was not greatly inferior to its own age as a corporation – lots of white hair there. Everyone seemed sublimely confident nothing really bad could ever happen to Bethlehem Steel.
The plant to which the team of which I was a part was deployed closed two years after our project wrapped up. Nobody there seemed to have a clue that this was coming but the place was ripe with the stink of death when I had been there so I was completely unsurprised. We had done what we came to do, at that time, but it had about as much overall effect as trying to patch the Titanic with chewing gum. Bethlehem continued to die by inches over the ensuing quarter-century and finally went bust just the other side of its 100th birthday.
Diane Wilson,
Amen to pretty much everything.
A minor quibble:
Your rhetorical question anent ULA building engines is obviously answerable only in the negative. But ULA is a fairly recently-birthed entity, being thrown together – literally – in 2006. SpaceX is, somewhat ironically, four years older than ULA. Of course ULA is essentially the sum of the venerable launch vehicle baggage of Boeing combined with the just as venerable launch vehicle baggage of LockMart. Lotta baggage there.
One of the key pieces of American Tourister is the notion – of decades-long standing in the aircraft industry – that “We don’t do engines, we buy engines.” ULA has not, so far as I know, made any acquisitions of other corporate entities since its formation. If Tory Bruno had been running the show in 2006, he might well have decided – probably in 2007 when Russia grabbed off part of Georgia – to try buying all or part of what is now AR as a hedge against potential future problems with availability of the RD-180 for Atlas V. He would definitely have had his work very much cut out for him trying to sell that idea to the boards of both ULA’s parents. Hardly a slam-dunk. In the event, the guy who was running ULA for its first eight years would have never even thought to attempt such a thing.
Sigh. Ever look at book pricing? Maybe you’ve just bought a paperback for 7.99. Fair price, you figure, and in a lot of ways it is. But if you’re buying at Waldenbooks or a similar chain book store — assuming you can still find in your neighborhood — odds are the publisher sold it to the store for about 3.50. That leaves a fair bit for profit. Granted, the store has rent to pay, sales clerks to pay, heating and lighting expenses, and so on and so on. But it isn’t buying that book for 7.75 from the publisher and trying to stay solvent on a 3% profit margin. There’s some slack, in other words, and all going well the store will be quite profitable. And if all doesn’t go well … the store folds.
Grocery stores, the same sort of deal, except there the margins tend to be a lot smaller. Other hand, grocery stores have a lot more customers, most spending considerably more than 7.99.
Let’s say now Elon Musk can fuel and launch a Falcon 9 for 40 million bucks, when all goes well. Maybe one launch vehicle in 20 blows up on the pad — a fair estimate a decade or two back — so it makes sense if he self insures to tack another 5 million or so onto the customer’s cost. Also, there are scrubs for bad weather and aircraft flying off course wander into the launch safety zone and so on, so another 5 million bucks to cover such contingencies makes sense. Plus he’s got ongoing R&D programs funded by these launches, so he ought to tack on another 5-10 million. But hey — An Ariane 5 launch of the same satellite would cost 120 million, and a Delta 1V would run to maybe 150 million, maybe 200 million for a DoD mission. So he can quote say 100 million bucks to a customer for a launch a year downstream and feel pretty comfortable. Maybe he can offer a reused first stage, cutting his costs by say 15 million, and offer the customer a 10 million savings — that’s even better. Sure, at some point he’s got to worry that Jeff Bezos is going to offer a comparable ride on a New Armstrong booster for 50 million — 45 million per launch if you buy six of them! — but that hasn’t happened yet.
You get the idea? Musk has got a bit more freedom to price things then a competitor working for “costs plus 5%.” He can’t pretend he and his customers are totally unaffected by market constraints, but at the same time … he’s got some slack.
Does my comment make sense now?
Dick Eagleson: great post. I’m going to reread it a few more times to savor it.
Where I’d not go along with you …. It’s not just that Aerojet and Rocketdyne and other aerospace firms were particularly old and sluggish and inflexible and got beat out by better competitors. It’s that such firms were like hothouse plants, specially forced into a non-commercial mode by the needs of the Defense Department in the 1945-1970 period. Security clearances for many many employees, DoD and congressional vetting of overseas sales, extensive on-site maintenance contracts after sales, detailed procurement regulations, US government provision of metal stamping facilities and wind tunnels, etc. This was a long way away from making bucks by selling nickel candy bars!
But it made sense to have such firms when defense seemed so big an issue that government spent 10% of GNP on it. And the firms all looked sensibly run and profitable … as long as the government spent 10% of GNP on defense. (Well, not totally. Economists were grumbling a bit about how things were being run in the late 1960s and early 1970’s. Some of them even wrote books about it.) But nowadays … what do we spend on the defense department? 3.5% of GNP. Add a bit for Homeland Security, and we’re up to 4%, and most of our European allies spend 2% of GNP or less on defense. And this isn’t the world where an old aerospace firm, still tied by law and regulation to 1970’s operating rules and internal customs, is going to do well.
All, great discussion!
Sure, at some point he’s got to worry that Jeff Bezos is going to offer a comparable ride on a New Armstrong booster for 50 million — 45 million per launch if you buy six of them!
40 million if you’re a Prime member.
Robert Pratt,
Normally I would agree with you, but SpaceX is in the rare and enviable position in which it can choose its own pricing. The other launch companies are much more expensive and their prices act as an umbrella under which SpaceX can operate. This is the advantage that finding significant cost reductions has done for SpaceX, and this is why the company has created such a disruption in the industry. That SpaceX is concerned about quality (reliability) is an additional plus for them. When they reach a point of excellent reliability, then they will be king.
I used to be on the board of a company that was proud to be the low price leader. We, too, could choose our profit margin, and our customers would pay it. However, the company had very poor quality. I tried to argue that it would not take much to improve our quality, but we had no lack of customers, so those of us who cared about quality lost every argument. An effort to improve quality was deemed unnecessary. Although low quality did drive away some potential customers, there were still enough who favored the price so that the quality issue was rarely a limiting factor to the customer base.
Fortunately, SpaceX has chosen quality, because it can regulate the demand for its services by keeping a high profit margin, and having a quality product or service will benefit SpaceX in the long run. Although they take pride in being the low cost provider, allowing more companies and countries to get into the space business than ever, they are eager enough for development money to keep their prices high enough to limit their customers to the number that they can serve.
Dick Eagleson wrote: “Like most start-ups, they get seed money from venture capitalists, not conventional banks. “Financiers” come in many flavors and are not uniformly interchangeable by any means.”
Venture capitalists (VC) have such a large interest in the startups that they finance that they tend to heavily influence their startups’ managements. A VC who gets into an industry that he does not understand has a much greater chance of mismanaging that company and losing his investment.
If you have your own startup and are considering going with a VC, research the topic heavily and interview potential VCs. You may end up with less control over your company than you wanted, or you may get the management assistance that you desperately need.
I just want to insert that the comments in this post have been some of the most edifying for me on BtB. I love it when my readers know more than me, and then provide that knowledge to everyone.
I should add however that what I have learned has nicely confirmed my instincts about Aerojet Rocketdyne.
mike shupp,
First, thanks for the kind words.
And you are, in general correct with your diagnosis of the main problems afflicting legacy aerospace these days – and legacy naval shipbuilding and legacy armored vehicle and artillery system design and pretty much everything else that is DoD-oriented. Where you’re off, in my view, is your timeline. Compared to the ossified, somnolent and overly centralized mess it has long since become over the last 40 years, the domestic military armaments industry was actually in comparatively vigorous good health during the preceding 40 years – 1938 through 1978 or so.
To cite the aircraft industry specifically, there were a lot more companies around in the 30’s, 40’s, 50’s and 60’s capable, with track records to prove it, of acting as prime contractors for new aircraft systems. North American, Seversky, Consolidated Vultee, Chance Vought, Douglas, McDonnell, Northrop, Grumman, Lockheed, Martin, Boeing, Hughes, Bell, Ryan – that’s more than a baker’s dozen right there and I’m sure my list is not complete.
Now, all we have left are three franken-companies stitched together from the limbs and organs of once great predecessor firms that successively fell on hard times. We used to have more companies than that making large commercial airliners. Now we are down to only one.
Starting a few years before WW2 and into the 50’s and 60’s, there was no shortage of rapid innovation and numerous new aircraft programs that all took only a few years each between start and delivery. These days, it takes longer and longer to design new planes despite the engineering tools available having increased exponentially in power and sophistication. What took maybe one to three years (P-51, F-4U, F-6F, P-38) in an era of slide rules and Marchant calculators now takes up to a quarter century (F-35) despite 3-D parametric modeling, finite element analysis, computational fluid dynamics and all the other modern conveniences along with vast, “pizza by the slice” server farms upon which to crunch serious quantities of numbers. Why? Because bureaucracy and “process” kudzu has metastasized and grown even more quickly than engineering technology.
Another key difference between that 1938 – 78 period and later was that many of the aforementioned companies were still run by their entrepreneurial founders during much of this interval. Jack Northrop, Donald Douglas, “Dutch” Kindelberger, “Sandy” McDonnell and others kept things tight and fast. Once the founding geniuses were gone, the organization men moved in, as they inevitably seem to do, and were more than satisfied to begin relying more on political influence than engineering and innovation.
1938 – 78 saw the introduction and maturation of jet engines, swept wings, supersonic fighters, interceptors and bombers, ballistic missiles – including on submarines – nuclear power for major naval vessels and subs, borderline miracles like the SR-71 and its kin and, in what has been pretty much the last real innovation by what is now legacy aerospace, stealth technology. The only significant innovation in weaponry of the most recent 40 year period has been GPS and precision-guided munitions that use it. Even these have roots that go back to that 1938 – 78 period. Early TV-guided smart bombs were first used during the Vietnam War, for example. The Nazis even had TV-guided cruise missile-smart bomb hybrids as far back as late WW2.
Not to put too fine a point on it, but we desperately need about a dozen Elon Musk types to target the military weapons industry and kick over the jams like their illustrious predecessors did in their own day. The future well-being of American fighting men and women demands this.
But powerful forces in Congress and elsewhere – including inside the uniformed services – would certainly oppose, say, a Mach 2.5 air superiority UAV capable of 12 – 15g maneuvers that largely flies and fights itself without needing much human input in real-time. The relatively few new weapons systems developed in the last 40 years have been, for the most part, just refinements of what came before.
That simply has to stop. We need to bust paradigms, not cast them in Lucite. I have no detailed battle plan that might enable such a defense industry renaissance to come about, but I’m giving the matter more and more thought lately.
Edward,
Finding the right VC is, for many entrepreneurs with start-ups, equivalent to a more mature company finding the right banker. Not all bankers are alike and not all VC’s are equally good fits for a particular start-up. At the moment, there are, if anything, too many software tech-oriented VC’s. There are a handful of VC’s that got into space startups early and have stimulated the formation of more and newer such firms.
One of the key problems that has to be addressed anent my notions contained in my reply to Mr. shupp is where the heck the U.S. is going to find suitable military hardware-oriented VC’s even if we can find the requisite young geniuses willing and able to launch startups aimed at shaking up the legacy defense establishment. This is, I think, more than a bit of a chicken-and-egg problem. The dense thickets of political brambles facing any would-be defense innovator are likely to prove far more challenging than the actual engineering. That fact doesn’t say anything at all good about the current status of these United States.
Ditto with Mr. Z,’s thought–
-extremely informative back-n-forth from everyone, and with a lot of excellent historical perspective.
Mike–
I’ve recently gotten myself (sorta) embedded into grocery-retailing, at the labor-acquisition stage, with a privately held regional (Midwest) chain. (400 stores, 40K employees.)
–Walmart used to bother them a lot, but their focus now is on Amazon.
They are acutely aware they sell commodities and are scrambling to go the value-added route with customer service, shopping & automated check-out with your phone (in store) and delivery to your door (on-line).
Referencing books– it’s sorta shocking that a larger and larger percentage of “books,” are printed in China.
Dick Eagleson,
I agree with what you said.
We really haven’t had any significant world-changing inventions since the laser, with the likely exception of additive manufacturing (3-D printing), which is poised to greatly change manufacturing both on Earth and in space.
I hadn’t thought of startups in the military hardware-oriented area, but that may be due to the nature of the current military industry. The heritage companies have such a hold on the industry that any startups only build parts and components (e.g. Sierra Nevada Corp.*). Starting a new defense company seems as likely as starting a new automobile company. Few have tried, over the past many decades, and only Tesla has succeeded for any notable length of time. I have difficulty imagining a VC specializing in defense startups, and I wish the best of luck to any who do.
Part of the problem with the consolidation of the aerospace industry occurred due to the end of the cold war, when the government got together in a room many defense contractor presidents and chairmen and told them the classic, “look to your left; now look to your right. There will have to be so many mergers in the next five years that two of you will not be running your own companies.” And sure enough, the mergers began as part of the “peace dividend.”
Reduced competition and less innovation seems like a poor dividend to me.
* Sierra Nevada is making its big move in commercial space, but remaining small in defense contracting. Even its move in commercial space was through an acquisition of another company, SpaceDev in 2008 (which also started out by building parts and components), meaning that the aerospace industry continues to consolidate.
Edward,
I would rate microelectronics as a technology fully as impactful as lasers. Both, unsurprisingly, were developed initially in the 60’s, part of that 1938-1978 period I have noted as particularly fecund anent technology development.
Additive manufacturing is important too, and will become steadily more so. But the many 3-D printing technologies still work at a relatively crude level of resolution. Long-term, I think nanotechnology will dominate for the production of most high-value-per-mass goods. The seminal concepts of nanotechnology date back to one of the late Dr. Richard Feynman’s lectures from the 50’s and to the 1986 book Engines of Creation by. K. Eric Drexler. Truly general-purpose nanotechnology has proven to be a very hard problem, but the field continues to advance and by late this century or early in the next Drexler’s vision may be pretty much realized.
As to the chicken-and-egg problem of touching off a fresh wave of entrepreneur-led innovation in military weaponry, I think the key may well be the new Space Development Agency (SDA) now in the nascent stages of being designed and implemented by the Trump Administration. The idea is to entirely bypass all the current design, development and procurement kudzu that retards progress with respect to hardware and software for military applications in space.
DARPA has been handed the task of designing this new agency and given just 60 days in which to do it. DARPA was the ideal choice for this chore as what is most needed in a new SDA is a more specialized version of DARPA itself. DARPA has done a lot to advance technology in fundamental ways even during the most recent 40 years. A bit over a decade ago, for example, it sponsored ‘The DARPA Grand Challenge,’ a contest for autonomous vehicles conducted in the California and Nevada desert. The whole driverless vehicle thing pretty much crystalized at that time and huge strides were quickly made – and continue.
DARPA also has a long history of dealing with entrepreneurial start-ups. DARPA gave SpaceX one of its first development contracts, for example, years before NASA did.
There is a well-established entrepreneurial VC/start-up space culture now extant anent civilian applications. I see SDA as a way of leveraging this to get existing and new entrepreneur-led space companies directly interested in explicitly military-oriented hardware and software projects. Once the SDA “pry bar” has been jammed in and worked back and forth a bit, I think other spheres of military endeavor will incrementally fall within the ambit of a new wave of defense-related entrepreneurship. Aircraft would be the obvious next step after space, then ships and land-based systems.
I’ve got a good feeling about this.
wayne,
So you’re in retail groceries now? Gee, and here I’d always thought you were such a nice and smart guy.
Maybe it’s just that the California retail grocery milieu seems especially thick-headed, but I have long since taken to modifying an old cliche about teaching that Woody Allen famously extended to a third line:
Those who can, do.
Those who can’t, teach.
Those who can’t teach, teach gym.
My version is four lines:
Those who can, do.
Those who can’t, manage.
Those who can’t manage, manage retail.
Those who can’t manage retail, manage retail groceries.
Here in CA, basics such as simply keeping goods on the shelves seem to have become a lost art. Under cost pressure, I am told, grocers now rely far more heavily on vendor personnel to restock shelves, not their own people. That hasn’t proven a good thing so far as I’m concerned. Groceries lose vast amounts of potential sales due to stock-outs while simultaneously pissing off their customers. Worse, I’m unaware of any grocer that even attempts to measure, or at least estimate, such losses. The attitude seems to be, “If it isn’t in the checkout data stream, it ain’t real and ain’t my problem.” Lost sales, of course, don’t show up on register tapes – pretty much by definition.
I don’t blame your current employers for being less worried anent Wal Mart than they used to be. In addition to all the other deficiencies that seem generic to the grocery business in CA these days, Wal Mart has the distinction of having the most ergonomically godawful checkout line design in the business. The worst part is probably those damned triangular bagging carousels. That’s a system tailor-made for causing shoppers to overlook a bag or two of their stuff on the carousel. Plus, the hooked rods the bags hang on readily catch your clothes when the carousel is turned. Then there’s the matter of only having one or two of those plastic bar things used to separate individual shoppers’ goods on the checkstand conveyor. Certain small economies are not worth pursuing.
When Mr. Sam was still running the show, Wal Mart had, by far, the most advanced IT infrastructure in the business. Since the kids and – especially – the grandkids took over, they’ve let the basics slide badly in favor of pursuing the approval of trendy lefties. “Green” initiatives, “Fair Trade” produce. My God, they’ve even got an annual film festival in Bentonville, AR! This is all pointless. The Left is never going to love Wal Mart. The Left doesn’t shop there, everyone else does. But the grandkids of Mr. Sam seem to be trendy leftists themselves. This is so often ironically true of the descendants of great entrepreneurs.
Your company is correct to worry more about Amazon. My daughter is a Prime member and has taken to buying a lot of her packaged groceries from Amazon for convenience as well as availability (those hit-or-miss shelves in brick and mortar stores again) and even price. If your employers don’t wish to become roadkill as Amazon adds groceries to its long list of retailing conquests, they need to stay as sharp as possible. But I see no signs anyone in retailing, generally, or in retail groceries, in particular, has any real strategy to check, let alone defeat, Amazon.
Good luck to you. You seem quite likely to need it.
By the way, which chain do you work for now? I grew up in the U.P. and went to school downstate so I might recognize the name. Is Meijer’s Thrifty Acres still a thing? They seemed to be a cut above average in the grocery business a half-century ago.
Dick Eagleson,
You wrote: “I think nanotechnology will dominate for the production of most high-value-per-mass goods.”
I consider nanotechnology to be part of the microelectronics that was invented about the time of the laser. The manufacturing processes are similar. If you consider that it is a new tech, then we have a mild disagreement between us, but I consider it a new use of the same tech, just as improvements in the use of 3-D printing is a new use of the basic technology.
As for entrepreneur-led innovation in military weaponry, I certainly hope that the U.S. is making progress in changing the current paradigm of spending billions and decades developing hardware that is too expensive to actually purchase. The B-1, B-2, F-22, and F-35 are examples of the military going in the wrong direction. New companies that are not entrenched in the old ways have the best opportunity to make affordable, effective, and efficient hardware and systems.
The war on terror is another example of lost opportunity. Rather than innovate new methods and hardware to fight the new war, the military depended pretty heavily on what they had learned and bought from the previous war, the first gulf war. As usual, they are essentially fighting the previous war rather than the one that they are in.
Edward,
You should read Drexler’s book. When perfected, nanotechnology envisions the programmed precision construction, down to the single atom level, of any design made of any material or combination of materials. In a sense, it is the ultimate additive manufacturing process. Current 3-D printing technologies can be considered crude precursors with varying lower limits of scale/resolution that won’t ever be able to be incrementally refined to the level of precisely placing single atoms at a time.
Microelectronics fabrication is not nanotechnology. It includes additive steps in which uniform layers of material are layered onto in-process substrates. But it is, in essence, a subtractive manufacturing technology as its key is selective removal of portions of each layer that was additively laid down by use of chemical reagents.
Agree entirely about the insane expense of modern weapons platforms. Related issues are that they take increasing lengths of time to design and prove out and that their unit costs magnify the impact of each potential combat loss because there are so few of each compared to comparable weapons in the past. This has simply got to stop before we get to the point where only a single exemplar – or none at all – of some future aircraft or ship is affordable even to the U.S.
Also agree that the War on Terror has been more mismanaged than not. But there are two major ironies about these wars anent previous ones the U.S. has fought. The first is that two of the few successes in both wars – the prompt initial routing of the Taliban from power in Afghanistan and the 2007 “Anbar Awakening” in Iraq – were due to the U.S. military in effect reaching back a century and a half to the Indian Wars of the American West for guidance, not to any of America’s more recent wars.
Arab societies, such as Iraq, are essentially tribal with nationhood a thin wash of plaster over that deep foundation. Afghanistan was, and is, almost entirely tribal – national identity has never meant much there. As the U.S. Army learned long ago, when faced with a tribal enemy, your best allies are usually going to be rival tribes.
The second irony involved the the U.S. forgetting, not remembering, things it did anent a much more recent past war. In particular, after the initial conquests of both Iraq and Afghanistan, we should not have promptly turned governance of either place back over to its inhabitants. Instead, we should have administered them via military governments of occupation as was done with both Germany and Japan. We didn’t give governance of either of those places back to their natives for a decade.
Iraq and Afghanistan, being far less modern and much more tribal than either Japan or Germany, would have needed significantly longer tenures under military occupation governments before returns to native rule. But we would also, at some point, have achieved real long-term success via fundamentally changing certain aspects of the native cultures in those places.
Sure, it would have taken awhile, but the stupid way we actually went about things has now all but guaranteed an indefinite future of strife, conflict and mischief-making centered in both places. Quickly washing our hands of Iraq and Afghanistan in the name of “avoiding a quagmire” has, instead, created said quagmires. There are, frankly, no genuinely good options before us going forward, just bad ones and worse ones. Those who used the phrase “nation-building” as an epithet – and they existed in significant numbers in both U.S. political parties – are responsible for the worst unforced errors the U.S. has committed during the War on Terror.
Dick Eagleson,
You wrote: “Microelectronics fabrication is not nanotechnology.”
Correct, but the technologies are similar. Nanotechnology includes such things as creating gears or other moving parts or creating dead masses during the construction of an accelerometer. It is because the two are similar and related that is why I said that we are in mild disagreement.
“This has simply got to stop before we get to the point where only a single exemplar – or none at all – of some future aircraft or ship is affordable even to the U.S.”
This already happened with the B-2. We had the choice of spending $1.5 billion to build one bomber per year or $2 billion to build two per year. The choice was to spend less per year but more per bomber. At least the U.S. is fiscally responsible. Oh, wait …
“Instead, we should have administered them via military governments of occupation as was done with both Germany and Japan.”
I think that, after WWII, we called this “winning the peace.” https://www.imdb.com/title/tt0040367/quotes/qt3150272
We should have remembered that lesson after the Vietnam War, but instead left the country vulnerable to a North Vietnamese re-invasion. I blame the politicians for that, as they are too stupid to win the peace.
The politicians seem too eager to help run businesses. They were trying to get ULA to choose Aerojet Rockedyne’s engine over Blue Origin’s, despite ULA preferring Blue’s engine. Wouldn’t it be nice if government kept its nose out of our business?