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ULA Executive talks about SpaceX being not profitable

Basto

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Spaceception

Spaceception

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Just now, Basto said:
Just now, Basto said:

Interesting article on ULA and SpaceX

 

http://arstechnica.com/science/2016/03/ula-executive-admits-company-cannot-compete-with-spacex-on-launch-costs/

Interesting article on ULA and SpaceX

 

http://arstechnica.com/science/2016/03/ula-executive-admits-company-cannot-compete-with-spacex-on-launch-costs/

That's kinda rough actually.

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AngelLestat

AngelLestat

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He was simply being honest and he didn´t knew that was being recorder..  so no sure why ULA forced him to resign.. .
ULA does not have any chance competing with SpaceX, even with its vulcan rocket.. they can not compete at all.
200 millions to 60 millions, and now spacex reduce the cost for reusable stages to a total cost of 40m (20 m less), so five times less than ULA.

And that cost reduction is just because spacex is still not sure on its recovery chances and they still need to increase launch rate to lower costs.
So no surprise if in 2 years the cost goes to 30m by launch or even less.

Edited by AngelLestat
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Nibb31

Nibb31

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1 hour ago, AngelLestat said:

He was simply being honest and he didn´t knew that was being recorder..  so no sure why ULA forced him to resign..

Because when you're in a executive position in any institution, whether it's a government position or a corporation, you tow the party line or you resign. If a SpaceX employee went on record criticizing their methods, or if a state secretary criticizes his president, they would probably be shown the door too.

The guy should have known better.

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ULA does not have any chance competing with SpaceX, even with its vulcan rocket.. they can not compete at all.
200 millions to 60 millions, and now spacex reduce the cost for reusable stages to a total cost of 40m (20 m less), so five times less than ULA.

Citation needed. (and no, Musk's twitter feed isn't a reliable source).*

SpaceX is about as lean as they can get. It was easy to cut 50% off of the prices that used to be practices by picking the low-hanging fruit. Cutting by 50% again is much harder. Cutting 50% again is even harder. It's like folding a piece of paper again and again. There is a point where you encounter diminishing returns, where every little drop of efficiency you gain costs more to get to.

 

 

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fredinno

fredinno

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2 minutes ago, Nibb31 said:

Because when you're in a executive position in any institution, whether it's a government position or a corporation, you tow the party line or you resign. If a SpaceX employee went on record criticizing their methods, he would probably be shown the door too.

The guy should have known better.

Citation needed. (and no, Musk's twitter isn't a reliable source).*

SpaceX is about as lean as they can get. It was easy to cut 50% off of the prices that used to be practices by picking the low-hanging fruit. Cutting by 50% again is much harder. There is a point where you encounter diminishing returns, where every little drop of efficiency you gain costs more to get to.

 

 

There's also the fact SpaceX only has young employees right now, which are cheaper, and is able to maintain a high employee turnover rate due to it's high publicity. SpaceX needs the savings fromreuse to offset the inevitable aging of its workforce.

1 hour ago, AngelLestat said:

He was simply being honest and he didn´t knew that was being recorder..  so no sure why ULA forced him to resign.. .
ULA does not have any chance competing with SpaceX, even with its vulcan rocket.. they can not compete at all.
200 millions to 60 millions, and now spacex reduce the cost for reusable stages to a total cost of 40m (20 m less), so five times less than ULA.

And that cost reduction is just because spacex is still not sure on its recovery chances and they still need to increase launch rate to lower costs.
So no surprise if in 2 years the cost goes to 30m by launch or even less.

ULA can never compete in price- it can, however, compete in high value missions where success and/or timeliness is key with Vulcan. So ULA can compete overall, if it plays the right cards.

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Nibb31

Nibb31

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Just now, fredinno said:

There's also the fact SpaceX only has young employees right now, which are cheaper, and is able to maintain a high employee turnover rate due to it's high publicity. SpaceX needs the savings fromreuse to offset the inevitable aging of its workforce.

Or they can keep squeezing their young employees, pushing them out as soon as they want to have a personal life, and just leave the rotating door open so that they always have a young and cheap workforce. Of course, there is also a point where that becomes counter-productive too.

 

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Kerbart

Kerbart

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1 hour ago, AngelLestat said:

He was simply being honest and he didn´t knew that was being recorder..  so no sure why ULA forced him to resign.. .
ULA does not have any chance competing with SpaceX, even with its vulcan rocket.. they can not compete at all.
200 millions to 60 millions, and now spacex reduce the cost for reusable stages to a total cost of 40m (20 m less), so five times less than ULA.

In all fairness, and he pointed that out too, SpaceX was set up from the beginning to provide low-cost launches. ULA on the other hand was set up to launch reliably (which they did) and put anything the government threw at them into space.

That doesn't change the fact that ULA can't compete on price, but it does change the angle from "corporate fat cats who happily overcharged the government" to... ...well, something more positive at least.

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tater

tater

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The AF was liquided that ULA did not submit that bid. They pay 800 M$ for on-demand launches, and they expect that ULA at least bid on other stuff, otherwise they'd be paying 800 M$ a year for possibly zero launches, which is absurd. They could buy 2 F9 vehicles every year, "just in case," and have them waiting in a hanger, and pocket nearly 700M/yr.

The guy was basically saying their business was a bad investment in a public place, he should of course be expected to leave.

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fredinno

fredinno

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http://forum.nasaspaceflight.com/index.php?topic=39809.0

Quote

A summary, made of some choice quotes from the audio:
"[regarding SpaceX] Nobody takes them too seriously."
"And we have this friend, Richard Shelby..."
Lots of dissing on McCain and blaming him for RD-180 troubles
"[regarding O-ATK and RD-181] They are not getting the attacks from McCain and Elon Musk that ULA is getting. What's up with that?"
"[regarding ULA capabilities contract] We're a whole lot more responsive than SpaceX will ever be. But they can't afford that anymore, because the price points are coming down as low as $60m per launch vehicle. On the best day, you'll see us bid $125m or twice that. When you add in the capabilities, it comes close to $200m."
"There definitely is 100% mission success [inaudible] out there..."
"SpaceX will take [the government] to court if they don't demonstrate the ability to say 'if you don't allow us to compete on an Atlas-to-Atlas basis, then we will take you to court, and you will lose.'"
"If you saw just recently they bid on the GPS-III launch, and ULA opted to not bid that...the government was not happy with us not bidding that because they felt that they bent over backwards for us...now we have to figure out how to bid these things at much lower cost."
"Now the government can't just say that ULA's got 100% mission success and 105 launches in a row and hand it to them on a silver platter, even though their costs are 2-3x as high."
"[The capabilities contract] is going to run out in 2019, and the chances of Congress reappropriating money for that is exactly zero, so we have to be ready to roll the cost of all that work into our launch vehicles."
General complaining about Boeing and Lockheed competition obstructing ULA.
20:03 "The first thing that comes out of any of the DoD leadership's mouth when [the Lockheed CEO] walks in the door is 'what are you doing with that damn RD-180 engine? I'm sick of McCain attacking us.'"
20:20 "So they're trying to figure out, how do we silence McCain?" Weighs investing in development of American engine vs. going all-Delta. "Is it worth a billion or two dollars in taxpayer money just to silence John McCain?...he really is a one-man band."
21:27 "Don't get me wrong, SpaceX have done some amazing stuff. The landing of that booster back at the Cape was nothing short of amazing. I was watching with my wife on my phone at Best Buy, and when it landed I just got goosebumps...watching them smash it into the barge is fun too."
21:58 "It's extraordinarily engineeringly cool, but it's dumb...he carried 100k pounds of fuel after SES-9 in order to try to land on a barge. They went through four scrubbed launches because they're sub cooling their liquid oxygen to get it denser."
22:46 "The first stage they landed, they put it back up on the test stand and said they had some throttling issues, whatever that means, but they got the engines to relight." Goes on to dispel reusability because of refurbishment costs, compares to Shuttle.
22:59 "Jeff Bezos is pretty quiet and doesn't like to fight with people, so he's completely different than Elon Musk, but he's very rich."
25:32 "[Blue Origin] nailed a landing with [New Shepherd] before Elon landed his, and there was a lot of billionaire fighting about that."
28:26 "The chances of AR coming in and beating the billionaire is pretty low, but politically we can't [inaudible]." Before this he compared the state of things to having two fiancees.
Lots of talk about AR-1 vs BE-4. As previous quote implies, he's a big fan of Blue Origin and BE-4. Tells a story of blowing up the test stand, praises Bezos' checkbook.
38:25 "An Achilles heel of the Atlas system right now is the Centaur upper stage." Now we're getting into ACES.
39:33 "We'll get to the point where we'll do on-orbit refueling."
40:25 "We would have been developing this with our independent research and development money if they hadn't made the political decision to outlaw the RD-180." Says it forced them to focus on the booster over ACES.
40:53 he compares SMART reuse to the Atlas 1 stage-and-a-half system...
46:55 "On the last 60 launches of the Atlas-Centaur system, we've launched with an average of 1,682lbs of extra field and oxidizer. The only ones we've really burnt to completion are the ones heading to Pluto...there's a ton of capability there, but the customers are paying for that capability." Says customers don't want to sacrifice margins.
49:25 "The discussion was, why don't we just launch the rest of our Atlases and Deltas, harvest the inventory in the most profitable way if you will...and just let ULA go out of business." Says USAF and business would be "all over" Boeing and Lockheed if they turned their back on the launch business, not "politically attractive."
50:15 Someone (judging by volume, the person recording) asks if there's a segment ULA dominates in compared to SpaceX three years down the road. "Damn near everything. They don't do anything. We deliver everything to space. We've launched every GPS satellite that's up there, they road on ULA or companies before that. We fly every national security asset that's up there right now."
50:48 "The guy is a propaganda genius."
51:10 "[SpaceX] has got at least a $10b valuation. Why is this guy [Musk] worth $10b for doing nothing when we're doing all this stuff? He's got vertical integration, he's building his own engines, his own capsule to go with that, but he's not worth 2.5x what ULA is worth. What I think he's doing...is trying to distance himself from Boeing and Lockheed's valuations and move more toward Uber or Facebook type valuations." Talks about "giving away" $60m launches.
52:22 "Even this last week when he was having trouble getting his launch vehicle off the ground and crash landed on the barge, he's still going to have a positive pressure release that says he just sold three more rockets to three more communications companies."
53:00 "I know he's not making a profit. He's plowing through other people's money right now."
53:25 "Every time you watch a Falcon 9 launch, he's probably losing a quarter million dollars or something like that."
53:31 "He's got this promise of a lower cost system some day. He might get there, I'm not going to deny that it could happen. Whatever doubt with what Tesla's done, SolarCity, changing the game..." He trails off.

Quote
That ULA exec is missing a zero. Elon's ideal plan is to get SpaceX valued at like $500B (after a few decades). That's what it'd look like if all their projects were successful. $50B would be a fallback, i.e. scaled back constellation, etc.

But it is indeed true that you have to invest money (more money coming in than going out, which is the same as as being "unprofitable" from this exec's perspective) in order to grow at any kind of significant rate. If all you want to be is a cash cow, then no growth is necessary or even desired and yeah, you should be making a big chunk of change for each launch.

If you're trying to build the infrastructure to do 40 launches per year, develop some of the most powerful rockets ever seen, develop crewed flight to ISS and then to Mars, develop ISRU infrastructure on Mars, develop a huge lander, new reuse tech unlike has ever been demonstrated before, new and advanced cycle engine, recreate the entire Internet in LEO, and build a million person city, then yeah, it probably takes more investment than the revenue of 6 launches per year...
 
 

 

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AngelLestat

AngelLestat

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1 hour ago, Nibb31 said:

Citation needed. (and no, Musk's twitter feed isn't a reliable source).*

SpaceX is about as lean as they can get. It was easy to cut 50% off of the prices that used to be practices by picking the low-hanging fruit. Cutting by 50% again is much harder. Cutting 50% again is even harder. It's like folding a piece of paper again and again. There is a point where you encounter diminishing returns, where every little drop of efficiency you gain costs more to get to.

http://qz.com/636368/the-elon-musk-special-30-off-your-flight-in-a-used-spacex-rocket/

They will start to offer refly of stages at 40m, of course they still does not have any stage to be reusable, and this will count only for the new customers who did not pay yet. The president also mention the thing that I always said, that customers in the future should be feel safe to fly a stage that was reusable many times, because if we would fly in an airplane, we would be more comfortable flyiing in an airplane that we know that is not the first time it will fly.

Once they can increase fly rate and increase the recovery ratio of stages, then they can reduce the cost even more, because launch operation, planning and all cost are reduced due more automation systems.

About the employees profits, why you complain?  they feel better working for spacex and gaining less money because they are doing something significative with their lives, and if you work in spacex, that is a major plus for your future work experience.
You seem to choice the socialist discourse only when you talk against spacex.  Free Market..  
Also:
http://www.buzzfeed.com/coralewis/companies-are-eliminating-their-gender-pay-gaps#.apOdrVQW36

 

1 hour ago, Kerbart said:

In all fairness, and he pointed that out too, SpaceX was set up from the beginning to provide low-cost launches. ULA on the other hand was set up to launch reliably (which they did) and put anything the government threw at them into space.

That doesn't change the fact that ULA can't compete on price, but it does change the angle from "corporate fat cats who happily overcharged the government" to... ...well, something more positive at least.

They still can have some niches on certain cases with the help of the government, but personally..  I dont see this company "ULA" surviving for more than 5 years.

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Camacha

Camacha

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2 hours ago, Nibb31 said:

Because when you're in a executive position in any institution, whether it's a government position or a corporation, you tow the party line or you resign. If a SpaceX employee went on record criticizing their methods, or if a state secretary criticizes his president, they would probably be shown the door too.

It is exactly that attitude that hurts so many businesses and people. That it is good for business to present your company with a coherent story, goal and strategy is a given. However, this does not mean all the employees have to be perfect carbon copies, with identical opinions and without dissent. We all know that no one is perfect and that constructive criticism keeps the blade sharp. No one buys the sugar coated story that gets regurgitated every time a camera is around - thinking this is what people need and expect is underestimating them.

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Bill Phil

Bill Phil

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ULA is playing it safe. Reusability may still not be so valuable. Maybe saving a million bucks AT MOST for the first decade. So far reusability has added costs, in all cases. F9 hasn't been reused yet, and it won't be for a while. 

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