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Space Transportation

Lockheed, SpaceX Trade Barbs 215

Lockheed Martin and Boeing have been getting all government launch contracts for the past six years. That is, until SpaceX demonstrated they could reach the International Space Station successfully this year. Asked about the new competition brought by SpaceX, Lockheed CEO Robert Stevens made light of the younger company's success. "I’m hugely pleased with 66 in a row from [the Boeing-Lockheed alliance], and I don’t know the record of SpaceX yet," he said. "Two in a row?" When he was asked about the skyrocketing price of launching his sky rockets, he said, "You can thrift on cost. You can take cost out of a rocket. But I will guarantee you, in my experience, when you start pulling a lot of costs out of a rocket, your quality and your probability of success in delivering a payload to orbit diminishes." SpaceX CEO Elon Musk was blunt about the source of the price difference between the companies: "The fundamental reason SpaceX’s rockets are lower cost and more powerful is that our technology is significantly more advanced than that of the Lockheed-Boeing rockets, which were designed last century." The Delta IV and Atlas V rockets of Lockheed-Boeing average about $464 million per launch, while SpaceX's Falcon 9 launches for $54 million. Its upcoming Falcon Heavy will go up for $80-125 million.
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Lockheed, SpaceX Trade Barbs

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  • Progress! (Score:5, Insightful)

    by Anonymous Coward on Wednesday December 26, 2012 @09:35AM (#42394023)

    First they ignore you, then they laugh at you, then they fight you, then you win.
    - some baldie

  • Re:Progress! (Score:5, Insightful)

    by taiwanjohn ( 103839 ) on Wednesday December 26, 2012 @09:48AM (#42394071)

    SpaceX is blowing the competition away. Even the Chinese have said they can't match SpaceX's prices. ULA will continue building Deltas and Atlases for a while yet, but once their current launch manifests are cleared, they'll have a tough time selling any more. Their only hope of survival is if SpaceX can't ramp up production fast enough to devour the entire market. In the meantime, other "NewSpace" vendors are getting into the game, making life even tougher for the "legacy" crowd. I just wonder how long it will take before SLS gets canceled.

  • by mcgrew ( 92797 ) * on Wednesday December 26, 2012 @09:57AM (#42394121) Homepage Journal

    Also, Lockheed is a very big, very old company with layers of bereaucracy. The bigger the organization, the more bureaucracy is needed, and the more expensive their wares become. Spaxe-X is still young and lean.

  • Re:Progress! (Score:5, Insightful)

    by vlm ( 69642 ) on Wednesday December 26, 2012 @10:08AM (#42394183)

    Their only hope of survival is ...

    ... market segmentation between commercial and dotmil.

    In ye olden days: "Hmm we've got experience building cost is no object ICBMs, and there's a budding, although small and price sensitive commercial market... lets hit it while we can". Worked OK until real commercial competitors arrived.

    They can go back to the glory days of ICBM building with the proper congressional bribes. Maybe ICBM launched drone strikes or whatever. They'll never sink as long as .mil is around.

    If you demand a bad slashdot car analogy, if no one is building commuter cars, the guys who make Abrams tanks can make fat stacks of cash until Toyota arrives and kicks them out of the market... that doesn't mean the market for tanks is permanently gone or being given to Toyota. Just means the tank company is going back to building tanks, instead of econoboxes or tropical fish aquaria or monitor mounting arms or WTF they temporarily diversified into.

    Now if spacex is all a scam to bootstrap into the lucrative ICBM market, then, at that time, we'll have the epic business battle of the century.

    If you want another really bad analogy, I'm not sure whos on which side but its like trying to pick a fight between a 4 star restaurant and a fast food hovel. Technically you can stuff your piehole at either facility, but in practice its unlikely either will succeed in putting the other out of business.

  • Re:Progress! (Score:3, Insightful)

    by benjfowler ( 239527 ) on Wednesday December 26, 2012 @10:17AM (#42394245)

    It's hilarious when the guys from China Great Wall Industry are accusing Musk of lying and cooking his figures....

  • Re:CMMI (Score:3, Insightful)

    by CryptoJones ( 565561 ) <akclark.cryptospace@com> on Wednesday December 26, 2012 @10:29AM (#42394315) Homepage
    You can not accurately say that just because an organization is not accredited by X body that its quality is lower.
  • by khallow ( 566160 ) on Wednesday December 26, 2012 @10:30AM (#42394323)

    There's a pretty good argument that the core difference between spacex and the defense contractors is spacex is giving up hope, at a very basic level, of selling ICBMs to dotmil.

    I disagree. The US hasn't made any new missiles since the Peacekeeper. That's about twenty years of no selling of ICBMs. Lockheed doesn't even have a rocket at the moment (the Atlas V is operated by ULA, which Lockheed is a part owner of).

    My take is that Lockheed's niche here is launch services. If you want your payload in space, at some point, you're going to have to put it on a rocket. That's a very specialized task. And the period from launch through to successful deployment in the right trajectory remains one of the riskiest parts of a mission.

  • by Anonymous Coward on Wednesday December 26, 2012 @10:34AM (#42394345)

    SpaceX will be able to run circles around the large prime contractors because they reward their employees for what they get done instead of how many employees they manage. Old space would rather promote a guy who got nothing accomplished with a team of thirty than someone who did amazing work with a team of five. When you reward bloat, you get high cost defended by people who are clueless that things could be any other way.

  • by smpoole7 ( 1467717 ) on Wednesday December 26, 2012 @10:34AM (#42394355) Homepage

    > bureaucracy

    This, this and this again.

    I guess the day will come (I suspect that it'll be long after Musk has assumed room temp) when SpaceX is a giant, ossified fossil that can't adapt to changing markets. It seems to be inevitable.

    My brother is the business guru in our family, and one of his favorite stories involves pizza chains. There's a TON of profit in pizza. Ergo, big chains like Pizza Hut were able to build these fancy restaurants with beautiful decor ... and then along came discounters like Little Caesars to eat away at their market share.

    Smaller, leaner retailers like Dollar General are giving Wal Mart a run for the money nowadays, too.

    Call the Economic Circle of Life. You're born, you go through a rapid growth phase, then you become hidebound and eventually just fade away.

  • by dj245 ( 732906 ) on Wednesday December 26, 2012 @10:36AM (#42394363) Homepage

    Also, Lockheed is a very big, very old company with layers of bereaucracy. The bigger the organization, the more bureaucracy is needed, and the more expensive their wares become. Spaxe-X is still young and lean.

    Not only that, but their engineering processes are terrible. I had the misfortune of working with them on the replacement for the Alvin submarine []. Instead of looking for things which could be purchased off the shelf, they seemed to go out of their way to design completely new parts and write completely new software when an ideally-suited commercial package would have been more functional than the programming garbage they produced. Maybe this is coming from higher up to inflate costs and chargeback to the customer. I certainly found it ridiculous though.

    A couple years ago I had to obtain a TWIC [] card. When I went to the office to have my biometrics done, all the equipment was branded "Lockheed". And none of it worked right, turning what should have been a 5 minute trip into a 1 hour ordeal. There was about 10 different devices on the clerk's desk, when 3 should have sufficed (scanner, fingerprint reader, camera). There are dozens of companies which make secure badging and identifying products. Lockheed's pile of garbage probably cost 100x as much and isn't as good.

  • Re:CMMI (Score:4, Insightful)

    by hsmith ( 818216 ) on Wednesday December 26, 2012 @11:08AM (#42394579)
    Ah yes, CMMI, where you fork over a bunch of money to get a piece of paper that says you have a process. Not a good process, but a process. So it has to be better!

    If you think SpaceX has no repeatable processes, documentation, you are insane.
  • some truth (Score:5, Insightful)

    by Tom ( 822 ) on Wednesday December 26, 2012 @11:19AM (#42394657) Homepage Journal

    There's some truth to it. SpaceX is built like an Internet startup - failure is always an option. The "old technology" is from an age when every launch was a national news event and failure was no option.

    Read this: []

    and then realize that while everything NASA seems to be luxury spending, their software development manages to have at least two orders of magnitude fewer bugs than any commercial software company.

    If your life depends on it - would you rather fly a NASA Space Shuttle or a Microsoft Rocket ?

    SpaceX deserves a lot of credit, no doubt. Among other things, they have revitalized the "space exploration is cool" meme. And with it the willingness to take risks.

    But how about we talk about costs when they've had their first two or three explosions and resulting fallout in costs, publicity, etc.?
    I'd be mightily surprised if the learning wouldn't go two-way. Old tech learns from SpaceX how to cut costs while SpaceX learns from old tech which costs you shouldn't save on.

  • by vinn ( 4370 ) on Wednesday December 26, 2012 @11:44AM (#42394817) Homepage Journal

    Having worked as a contractor for Goddard Space Flight Center years ago on a few projects, I can assure you that SpaceX's way of doing business is completely different than the old school space business. Coming from NASA, which trickles down to Boeing and Lockheed, the standard mentality is do everything at least twice, and usually triple checking all of that. New processes are frowned upon and twenty year old technology is still considered new, potentially even unproven. It is a frustrating way to work for a lot of people because it moves so slow. However, it is fairly safe and effective.

    Now, enter SpaceX. I suspect they have a lot of the old NASA engineers, so they have the experience to cut corners. However, they've designed the thing intentionally to tolerate failures - they stuck 9 engines on the rocket. And you definitely want to tolerate failures, however, it does lead to mistakes. Look what happens though when one engine fails - the extra burn time meant the Orbcomm secondary payload on the last mission failed and never made it into orbit. That wasn't highly publicized, but it was a partial failure.

    Now, what we're going to run into the standard cost/benefit of the extra work that goes into Boeing rockets. Is it worth it? Well, I suspect once you start sticking people on the top of the rockets the tolerance for failure goes down. Personally, I love what SpaceX is doing and I think a lot of the stuff is cutting edge. It is the direction we need to be headed, and I personally think the risks are worth it.

    Better - Faster - Cheaper

    You only get two.

  • by aaarrrgggh ( 9205 ) on Wednesday December 26, 2012 @12:05PM (#42394993)

    The difference between many military grade (and grades within the us armed services) and consumer grade is the testing and validation done to make sure it works the first time. A composites supplier told me that if they produced 100 products, two would test to Air Force specs, 10 to Navy specs, 30 to Army specs, and the rest (save 2-3 units found to be defective) would be suitable for other customers. (Branches and exact numbers may be off, but orders of magnitude are right.)

    If you need to make the 100 to get two that are up to spec, you are going to have higher costs. Hopefully not 50x cost, but in a well managed system it is at least 3x. The problem comes when everybody makes their specification higher than what they actually need, or when only the people with the highest spec are buying.

    SpaceX's opportunity is in offering the value customer a better product designed and tested to meet their needs.

  • Better Engineering (Score:5, Insightful)

    by tjstork ( 137384 ) <todd.bandrowsky@gma i l .com> on Wednesday December 26, 2012 @12:14PM (#42395073) Homepage Journal

    Musk once alluded to a better manufacturing process for actually building rockets. So, instead of saying that he's taking shortcuts and what not and doesn't have layers of bureacracy, what if he just has a cheaper way to build rockets that are better?

  • by C0R1D4N ( 970153 ) on Wednesday December 26, 2012 @12:26PM (#42395227)
    I do not see anything wrong with having a higher failure rate on unmanned missions if the cost is enough thet you need to fail four times before the cost matches the rocket with a lower fail rate.

    We can have separate standards for manned vs unmanned.
  • by yesterdaystomorrow ( 1766850 ) on Wednesday December 26, 2012 @12:35PM (#42395327)

    Not really. NASA generally goes with what appears most "credible" to them within the cost cap. The most important factor in credibility is matching their detailed estimates of costs, created using "parametric" methods. These methods take historical costs into account and then allow for inflation. Imagine estimating the cost of a computer by scaling from an IBM 709, assuming every performance enhancement costs money, and multiplying by inflation. Then, you refuse to try anything cheaper, because it's "risky".

    The result? The bidder must propose not only a high price, but must justify that price based on costs. You must demonstrate the ability to put together and manage very inefficient processes. It usually doesn't even help to have done similar jobs efficiently: the cost "experts" don't find actual experience in conflict with their databases to be "credible". Their databases are full of previous examples of projects approved and planned with the same methodology, so the reasoning is almost perfectly circular.

    Historically, nobody has been able to develop an orbital launch vehicle without government subsidy, so this credibility problem has been an impenetrable barrier to exploiting real high tech methods, where deflation, not inflation is normal. But Musk has deep enough pockets, and a talent for PR that has made it impossible to dismiss the success of Falcon as an aberration.

  • by cusco ( 717999 ) <brian.bixby@gma i l . c om> on Wednesday December 26, 2012 @01:48PM (#42396129)
    Project managers somewhere like Lockheed only need to get burned once by purchasing something that doesn't work as advertised to want to take everything back in-house. If they have something written in-house that doesn't work they can point fingers and blame their failure on the other group. The internal politics in places like that are more important than having actual process or products that work.

The human mind ordinarily operates at only ten percent of its capacity -- the rest is overhead for the operating system.