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ITAR can be overcome

One of the biggest complaints in the space business community, particularly among entrepreneurs, is the headaches created by export control regulations, specifically International Traffic in Arms Regulations (ITAR). There is an existence proof now, however, demonstrating that these hurdles can be overcome: SPACE.com reports that the State Department has issued an agreement—presumably a technical assistance agreement (TAA), although the specific term is not used in the article—between US-based Scaled Composites and UK-based Virgin Galactic regarding the development of SpaceShipTwo.

The agreement is not a surprise: Virgin and Scaled had been dealing with the export control paperwork for months, as Virgin Galactic’s Will Whitehorn mentioned in Congressional testimony back in April. What Whitehorn doesn’t reveal in the SPACE.com report, though, is how much effort getting the TAA cost the companies in terms of time and money, other than a passing mention that the work was spread over five months. That’s not necessarily a huge issue for a well-capitalized venture like this; whether this has smoothed the path for future entrepreneurs whose pockets are not nearly as deep as Branson’s, though, remains to be seen.

6 comments to ITAR can be overcome

  • Dfens

    People familiar with the matter say Brazil-based Embraer is Lockheed’s choice over Chicago-based Boeing. Lockheed won an $879 million contract last year to design the program using an Embraer 145 plane, but it turned out to be too small.

    I am an anachronism, but I remember a time when Lockheed built airplanes. Of course, this story is rather ironic because Lockheed won the program saying they could use the small, relatively cheap 145, and then shortly after winning the competition with Northrop, said, “oops, we need a bigger airplane.” Guess how they’ll get penalized for their mistake. That’s right, they’ll get more money to switch to the bigger jet, and a schedule slip, because who could hold them to their current schedule now that they have to fit all that equipment into a whole new vehicle? Anyway, just another example of our aerospace jobs going overseas. I hope the Brazilians get good at making airplanes, because we’ll need them when we can’t build them ourselves any more. I wonder who will design and build our next fighter. Those who spent the last 20 years on F-22 will retire soon, and when the F-35 is done 20 years from now, their designers will retire. Thank goodness we have Embraer.

  • I agree with you Dfens. But, remember, we’re a service economy now. We don’t need all those high-paying jobs with their pesky unions and benefits. Those who aren’t smart or vicious enough to make a killing in stock market or credit card pyramid schemes, or managing companies defaulting on pensions, can, well, work for McDonalds or be homeless, safely out of sight in a dying big city. We don’t need to actually produce anything any more, do we?

    – Donald

  • Ryan Z

    I’m confused as to how you got on this tangent. In this particular instance, they are looking to build this fleet in the mohave in the US.

    Though in general, I agree that ITAR regulations is driving business out of the US with companies like Alcatel building space platforms that have no US parts, but I digress.

    As for this, I am not to surprised. Commercial space manufacturing companies like Lockmart, Boeing, and Space Systems Loral are all constantly getting TAAs to work with other countries to build their satellites. Sea Launch also operates under a TAA.

    So good for Scaled Composite, they have passed one more milestone in their business plan.

  • Dfens

    I believe if you read what Jeff posted, you’ll see the topic is a bit broader than Scaled Composites. Right now these ITAR regulations are keeping Boeing and Lockheed in the launch business (a high risk business they don’t like), and preventing them from building satellites (a lower risk, high profit business they like) for foreign countries.

    Yes, Donald, we’re a bubble economy now. Housing bubble, high tech bubble, bubble of the month. I can’t wait until the stockholders find out the aerospace “giants” are really just empty gas bags, void of any real manufacturing capabilities, with a work force that’s been sucked dry of technical skills.

  • I am reminded of a funny line from George Soros: “I think that [the term 'bubble'] is overused…by me and others.”

    There is no sense in taking American successes for granted and then moaning about its failures. Yes, there is a housing bubble. Meanwhile, the White House is peddling a delusion of space exploration on the cheap. And ITAR leads to a raft of missed opportunities. But that doesn’t mean that the whole country is going from bad to worse. It doesn’t mean that the national work force is being sucked dry. The United States can still compete. Just look at Google and Amazon, and even JPL.

    What really makes the United States strong is its vast economic diversity and resiliency. It can overwhelm colossal errors. It can afford to lose more money than other countries even have. American debacles do damage American supremacy, which probably won’t last forever regardless, but that’s the breaks. It will still last quite a while.

  • Greg, I strongly agree with your last paragraph — but that does not mean that I disown my original comment. I think both statements are simultaneously true. We make stunningly bad ideologically-driven decisions (e.g., ITAR, allowing Boeing and McDonnell Douglas to merge) that could easily destroy other economies. We get away with it because we remain by far the world’s most creative economy. It’s part of what makes us such an interesting people. You are undoubtedly right that we won’t be able to balance that tight-rope forever, but we’re certainly having a good run for our money. And, if any nation could pull off the Vision for Space Exploration, I’ll still put my money on us.

    – Donald