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ULA deal nearly done

The Wall Street Journal [subscription required] reports today that the federal government—both the Defense Department and the Federal Trade Commission—are wrapping up an agreement that would permit the formation of the United Launch Alliance (ULA), the Boeing-Lockheed Martin joint venture that would combine the government launch operations of the two companies. That agreement, due to be completed in the next few weeks, would apparently address concerns by Northrop Grumman in particular that the ULA would give the satellite manufacturing divisions of Boeing and Lockheed a leg up on competing for government satellite contracts. The article adds that the deal will include “safeguards” for the Air Force regarding “future launch costs, corporate investments and how to deal with potential future competitors.” That last point would seem to address SpaceX, the only domestic launch services company that is targeting the EELV-class market in the foreseeable future, although the report doesn’t mention SpaceX by name and what role, if any, they’ve played in getting that provision in place. (Remember that SpaceX has sued Boeing and Lockheed, trying to block the formation of the joint venture.)

While the Journal is optimistic that a deal is nearly complete, the Chicago Tribune takes a more pessimistic tack, noting that there has been no overt progress on such a deal, and that unless the government approves the deal by Friday (unlikely), either side can pull out. Even if the deal wins government approval, the Tribune notes, that “does not guarantee the deal will be completed” depending on the terms of the agreement.

8 comments to ULA deal nearly done

  • Bill

    I think this is another government welfare systems designed specifically for Lockheed and Boeing. Remember, both use Other Peoples Money (OPM) to their fullest advantage and never keep their promises when it come to SPACE (FIA, SBIRS HIGH, SBSS Pathfinder, GPS IIF/R/M).

    Bunch of crooks who have the government decision makers in their pockets, and if not in their pockets, at least sleeping with them on weekends.

  • Ryan Zelnio

    I’m split on this one. For US companies that want to compete against Bomart, this stinks. However, the international market for commercial launching is cutthroat right now and Bomart can’t compete in it effectively. So they are unable to spread their costs between us gov business and commercial like their original business plans suggested. The delta in fact is the worse of the two failures as far as business plans go. Boeing as much as admitted so when it took the delta off the commercial market entirely. One of the rockets has to go and this makes the decision easier to swallow.

    As for spaceX, I think that some day they will compete, but until they successfully launch the falcon 9 about 4-5 times, they are not real competitors in this class of rockets.

  • I still think this is a bad idea. Probably a very bad idea. The government is subsidizing them anyway, and will continue to do so, so we should pay the small amount extra to keep both in business as separate, competing companies. After all, competition is supposed to be the American Way, and, in the long term, is likely to result in lower costs than a monopoly.

    In the long term — a decade or so — there probably is room for both rockets. The current drought won’t last forever, as comsats and applications satellites continue to slowly expand, the Delta-II is phased out, and as new markets appear.

    It is worth noting that we wouldn’t be in this boat even now if NASA had decided to use the EELVs for the VSE, expanding the market and lowering costs for everyone.

    — Donald

  • “It is worth noting that we wouldn’t be in this boat even now if NASA had decided to use the EELVs for the VSE, expanding the market and lowering costs for everyone.”

    Yes, and DOD were to take that decision with NASA.

    DOD had the power to prevent it; they had the power to shape a forward-looking NASA space launch strategy, as opposed to Marshall’s present multi-billion dollar trip down memory lane.

    But for whatever reason DOD didn’t act, and now may both will end up with space launch architectures that cannot sustain their missions and long term objectives.

  • In the long term — a decade or so — there probably is room for both rockets.

    In the long term — a decade or so — it’s unlikely that either one will be competitive with the new private vehicles being developed for other purposes. It’s basically a subsidy for the buggy manufacturers.

  • Rand, you may well be correct (I sincerely hope you are) but until somebody actually does develop a cheaper rocket that regularly flies, we would be fools to let the EELVs go away (unless they are replaced by the VSE vehicles). As SpaceX has been demonstrating, that is neither as easy or as soon as the alt.space crowd would like. Realistically, even if SpaceX does demonstrate their vehicle in the next six months, I’m not selling my Orbital Science stock until they’ve achieved at least a hald-full of flights without a failure. Likewise, the nation should not sell her EELV “stock” until there have been many Falcon-IV flights without a failure. Realistically, that is probably the better part of a decade in the future.

    — Donald

  • Oops, of course that should be Falcon-IX flights!

    — Donald

  • Nemo


    It is worth noting that we wouldn’t be in this boat even now if NASA had decided to use the EELVs for the VSE, expanding the market and lowering costs for everyone.

    This is an overreach; the VSE would have expanded the EELV market by – at most – six LEO launches per year starting in 2010, then ramping up mid-decade as lunar exploration resumes. That’s neither large enough nor timely enough to result in significant price reductions for other EELV customers.

    I have little doubt the DoD decided not to block NASA’s decision because they understood this, quite well.