Is United Launch Alliance About To Be Sold? (arstechnica.com) 57
schwit1 shares a report from Ars Technica, written by Eric Berger: One of the world's most important rocket companies, United Launch Alliance, may be sold later this year. The potential sale has not been disclosed publicly, but three sources confirmed to Ars that potential buyers have been contacted about the opportunity. These sources said a deal is expected to be closed before the end of this year and that investment firm Morgan Stanley and consulting firm Bain & Company are managing the transaction.
The sale of United Launch Alliance, or ULA as it is known within the industry, would mark the end of an era that has lasted for nearly two decades. The company was officially formed in 2005 as part of a deal brokered by the US government, ensuring the military had access to both Atlas and Delta rockets to put national security satellites into space. To form ULA, Lockheed Martin and Boeing merged their launch businesses into a single company, each taking a 50 percent stake. This union was profitable for both parent companies, as ULA held a monopoly on launching national security missions and, effectively, NASA science probes. In return for 100 percent mission success, ULA received large launch contracts and an approximately $1 billion annual subsidy from the US Department of Defense to maintain "launch readiness."
The emergence of SpaceX in the early 2010s with the increasingly reliable Falcon 9 rocket started to disrupt this profitable arrangement. SpaceX sold the Falcon 9 rocket at a substantial discount to ULA's Atlas V and Delta IV rockets. The company also successfully sued the US government to allow the Falcon 9 rocket to compete for national security missions, and SpaceX launched its first one in 2017. In recent years, SpaceX has come to dominate United Launch Alliance in terms of cadence. By the end of 2022, the upstart was launching as many rockets each month as ULA launched during a calendar year. During the last four years, in fact, SpaceX has landed more rockets than ULA has launched during its existence. However, ULA still holds a prominent place in the global launch industry, and there will likely be no shortage of suitors.
The sale of United Launch Alliance, or ULA as it is known within the industry, would mark the end of an era that has lasted for nearly two decades. The company was officially formed in 2005 as part of a deal brokered by the US government, ensuring the military had access to both Atlas and Delta rockets to put national security satellites into space. To form ULA, Lockheed Martin and Boeing merged their launch businesses into a single company, each taking a 50 percent stake. This union was profitable for both parent companies, as ULA held a monopoly on launching national security missions and, effectively, NASA science probes. In return for 100 percent mission success, ULA received large launch contracts and an approximately $1 billion annual subsidy from the US Department of Defense to maintain "launch readiness."
The emergence of SpaceX in the early 2010s with the increasingly reliable Falcon 9 rocket started to disrupt this profitable arrangement. SpaceX sold the Falcon 9 rocket at a substantial discount to ULA's Atlas V and Delta IV rockets. The company also successfully sued the US government to allow the Falcon 9 rocket to compete for national security missions, and SpaceX launched its first one in 2017. In recent years, SpaceX has come to dominate United Launch Alliance in terms of cadence. By the end of 2022, the upstart was launching as many rockets each month as ULA launched during a calendar year. During the last four years, in fact, SpaceX has landed more rockets than ULA has launched during its existence. However, ULA still holds a prominent place in the global launch industry, and there will likely be no shortage of suitors.
Who would buy it? (Score:2)
ULA missed the boat on reusable launch vehicles by pursuing it lethargically. It's basically up to companies like RelativitySpace and Stoke Space to offer competition to SpaceX. Maybe even Landspace in China.
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It would be hard to compete with SpaceX in the launch department. They are currently building a new Merlin engine each day (7 per week) getting ready for their upcoming launch windows.
SpaceX engine timeline [interestin...eering.com]
Re:Who would buy it? (Score:5, Insightful)
It would be hard to compete with SpaceX in the launch department.
That is unfair because ULA never had a goal of being competitive. Their primary purpose has always been to maximize the number of tax dollars they could suck up.
Then SpaceX came along and ruined everything.
Re:Who would buy it? (Score:5, Insightful)
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They are currently building a new Raptor engine each day (7 per week).
FTFY.
Raptor engines are the ones used for Starship. Merlin are used for Falcon 9 and Heavy, and are not required in such large quantities.
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Re:Who would buy it? (Score:5, Insightful)
Who would buy it?
Private equity. The name Bain ring a bell? Think Toys'R'Us, think Mitt Romney. There's a whole industry of this.
1. Buy it and drive hype about new ownership, new leadership.
2. Sell everything the company owns to scrap. Fire everyone. Drive hype about "focusing on core competencies".
3. Hype the income and loss of expense from point 2. as a great success. Take out as much loans as you can on the company for a "future vision".
4. Hype the loans as investment and expansion for the now "fixed" company.
5. On top of all of the hype, IPO the company to idiots who really should know better.
6. Pocket the money from the scrap sale, the loans and the IPO. Walk away and leave the empty shell behind. It is someone else's problem now.
7. Rinse and repeat.
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The problem is that ULA is less reliable and more than ten times as expensive as SpaceX.
I doubt if private equity will be interested. They can put lipstick on a pig, but this is putting lipstick on a hippopotamus.
Perhaps there is some IP or real estate that gives ULA residual value.
Re:Who would buy it? (Score:5, Insightful)
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Wait until SpaceX buys up the competition because they've had a government funded head start.
The Democrats aren't happy with Elon Musk so they will as long as they are in power block that. So if this happens it will be under Republican government.
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Accepting lobbying money is also politically useful to them...
What people say and do are often different things.
Successful politicians don't have friends, they have interests.
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Re: Who would buy it? (Score:2)
Why do you speak so loudly and often of things you know nothing about as if you're an authority on the topic?
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Wait until SpaceX has no more meaningful competition then watch as SpaceX gets more expensive and less reliable as a result.
Don't be silly: competition is falling behind quantitatively; qualitatively they're slowly catching up. And as this is no more and no less than applied physics in action, no one's guaranteed a perpetual monopoly - how long it takes the competition (cough *China* cough) to catch up, however, will be another story.
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Re: Who would buy it? (Score:1)
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Instead of admitting you didn't consider something obvious, you try to win on a red herring technicality?
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ULA doesn't own enough stuff that other people would buy that you could sell enough significant assets to even begin to make it worth it. What ULA has is a history of fulfilling government contracts. The only way to make it pay is for someone else who can get government contracts to buy it, and leverage the past in order to make the government waste money on them today with more spacecraft we don't need and shouldn't buy.
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But it has one thing that nobody else has :
Show they are an alternative service provider to SpaceX, even if they charge multiples of SpaceX charges per launch.
And US government is trying it's best to have at least 2 service providers for launch services (especially military / security stuff).
I suspect ULA will be get away with charging 100s of millions of bucks per launch to the US government for at least the next decade or so, until there are other proven launch service providers. And getting paid a bunch
Re:Who would buy it? (Score:4, Insightful)
I suspect ULA will be get away with charging 100s of millions of bucks per launch to the US government for at least the next decade or so
I agree with your assessment of congress' willingness to fund pork. However, they don't have enough engines to do that with their only current design, and they haven't actually finished designing the rocket which is supposed to succeed their current rocket so it's an open question whether they can even accomplish it. Actually building a reusable rocket hasn't happened yet, and it's a lot harder than what they have done so far. And it's not clear that it's feasible to actually do it without the willingness to blow up a lot of rockets (because real world testing is the only way to reveal real world problems) and neither of the principals which merged into ULA has ever demonstrated a willingness to do that.
It's still not outside of the realm of possibility, but the down side to an established defense contractor with ties to the MIC is that it has enormous operational inertia. It literally takes an act of congress to fundamentally change how they do business.
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It's still not outside of the realm of possibility, but the down side to an established defense contractor with ties to the MIC is that it has enormous operational inertia. It literally takes an act of congress to fundamentally change how they do business.
Funny you should put it that way. While the future of ULA has been bet on the Blue Origin BE-4 engine to propel the Vulcan Centaur rocket, their past work horse is the Atlas rocket. The Atlas uses Russian engines and their stockpile is limited and all accounted for by current contracts. Once they are gone the Atlas flies no more. They can't buy those engines due to an ACT OF CONGRESS. Without such a heavy lift rocket ULA is DOA.
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No, the hypothetical both-stages-reusable bit I mean. That's just hypothesized. Will they be able to do it with the same engines? And if not, will they be able to come up with new engines for the same rocket? As yet unknown.
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But it has one thing that nobody else has :
Show they are an alternative service provider to SpaceX, even if they charge multiples of SpaceX charges per launch.
They only have that IF the Vulcan Centaur works AND Blue Origin can and does continue to deliver the engines to them in the required volumes. Which of course means that engine has to work in the first place and be reliable.
The current Atlas rocket requires Russian engines which they are no longer allowed to buy (U.S. law). They have a limited stockpile all of which are scheduled to be expended under current contracts. ULA is ONLY a launch provider once those engines are used up IF the Blue Origin BE-4 en
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2. Sell everything the company owns to scrap. Fire everyone. Drive hype about "focusing on core competencies".
As much as everyone hates layoffs, this is a legit way to turn a company around. I've seen it happen throughout my career. Often, companies struggle because they started too many side businesses that aren't profitable. Getting rid of them can turn the company around. It's done in three steps:
1. Determine "core competency" to focus on.
2. Sell off parts of the business that aren't part of the "core competency" and use the funds to invest in the "core business."
3. Scrap the parts of the business that ar
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Wait, you're telling me Mitt could buy ULA? Will they install luggage racks on the rockets so he can put his dog in a cage on the outside during trips?
Re: Who would buy it? (Score:3)
Re: Who would buy it? (Score:5, Informative)
The fact that they're perusing the sale before its debut says everything you need to know about it. They selling it based on the idea of the rocket, when in reality, it will change little for the future of the company. The fact is that SpaceX took a concept every existing player in the industry thought was a fantasy and made it a reality. Now the incumbent players have no hope to compete. They're obsolete at every level, from ideas to execution. The fact is that none of the incumbent players have the drive or the will to make a SpaceX clone work. They're all full of people eyeing a big return for little effort (the kind of people that flock to defense contracts in droves) and used to getting their way.
It's the same problem the 'Big 3' American automobile companies had in the face of foreign competition. Each company sought a different strategy to innovate, the only company to try and stick to its existing ownership structure, Ford, it still having troubles with the transition decades later and all three went from major players in the US market to much more minor ones. None of them ever returning to dominance, nor any sign they ever will.
Re: Who would buy it? (Score:4, Interesting)
From what I read, Vulcan Centaur will cost about 3 times as much (per kg) as Falcon 9, and 5 times as much as Falcon Heavy. Its total payload is not a lot more than Falcon 9, and a lot less than Falcon Heavy. On top of that, "reuse" is something they talk about, but haven't actually worked on.
Plus, of course, we haven't seen even a trial launch yet, meaning no one knows when (or even if) this system will actually start carrying payloads to space.
So you're absolutely right: The fact that they want to sell the company before it's next (only) big product is proven? Shows a decided lack of confidence...
Re: Who would buy it? (Score:3)
Yeh, and even Vulcan Centaur wonâ(TM)t compete with Falcon 9. Let alone Starship which is expecting its first launch in the next month, and is expected to be cheaper not just per kg to orbit, but per launch too.
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My grandmother WOULD compete with it, but like Vulcan Centaur, or anything else proposed but never executed by ULA, is not a real thing.
ULA had a window, and they milked it well to get US tax $ to the tune of a billion a year. They never had a product. They have no product. Their engineers are no more. All they have now is a beureaurcracy, some debt, and no IP or real assets.
Fuck ULA. They have spent years fucking US taxpayers. The tax man cometth. Nobody but insiders (read Boeing or Lockheerd or Nor
Re: Who would buy it? (Score:5, Informative)
ULA has a new rocket in the works: the Vulcan Centaur [space.com] which is expected to fly this year.
Vulcan has a major problem. The reason it is years behind in its first launch is that it is relying on engines from Blue Origin which are years behind. Blue Origin did deliver the 2 engines for the first launch. One was rejected for leaking (bad design and/or bad quality control) and had to be replaced.
Blue Origin has never launched a rocket to orbit. Their own first planned orbital craft is also years behind and is supposed to use these same engines. Blue Origin has over the last couple of years announced 1st that this rocket (New Glenn) will need to redesign the 2nd stage to be reusable to be competitive (the 1st stage is supposed to be reusable) and 2nd that it cannot ever be cost competitive even with full re-usability. It uses the same engines. So their own rocket with the same engines may never fly. If it does it will not only compete with ULA but compete with them for the engines which Blue Origin hasn't proven they can deliver in the required volume, or even that they are functional for launch.
Blue Origin has their "pogo stick" rocket for carrying rich tourists to the edge of space that has carried a few people. The last unmanned flight destroyed the rocket and has not been explained though the video makes it some form of engine failure. Reports have it that the capsule survived but took 15g acceleration from the escape system. Some of their tourists have been octogenarians, would they have survived? No word on when/if it flies again.
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The thing is, the deal for BE-4 engines puts ULA as a priority customer. That means Below Orbit basically can't use any of their own engines as long as ULA still wants to buy any. The funny part is that even when Vulcan launches, still nothing from BO will reach orbit, because it's only the first stage.
In a sane world, BO would already be launching and be at least some competition for SpaceX, even without the benefit of reuse. But for some reason they still can't get it up after all these years. I mean, pe
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[...] people joke about "Elon time", but it's got nothing on "Bezos time".
If I remember correctly, the motto for Blue Origin is "Gradatim Ferociter"
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The thing is, the deal for BE-4 engines puts ULA as a priority customer. That means Below Orbit basically can't use any of their own engines as long as ULA still wants to buy any. The funny part is that even when Vulcan launches, still nothing from BO will reach orbit, because it's only the first stage.
When that contract expires what happens? I doubt it is a perpetual contract. What if they make an upgraded BE-4+? Can they back burner the old production in favour of the new (for themselves) and avoid that contract?
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[...] Blue Origin has over the last couple of years announced 1st that this rocket (New Glenn) will need to redesign the 2nd stage to be reusable to be competitive (the 1st stage is supposed to be reusable) [...]
If I remember correctly, SpaceX (i.e. Elon) considered making the second stage of Falcon 9 reusable, eventually discarded the idea.
To have full reusability you must replace the second stage with a vehicle like SpaceX Starship. Actually, the one thing I am unconvinced about Starship is size - so big! (Years ago I imagined that SpaceX could devise a "stretched" Dragon that could get into orbit on its own means, ditching the second stage altogether. Musings of an armchair rocket scientist ;-) )
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(Years ago I imagined that SpaceX could devise a "stretched" Dragon that could get into orbit on its own means, ditching the second stage altogether. Musings of an armchair rocket scientist ;-) )
Unfortunately it doesn't work that way. To get single stage to orbit to work you need high ISP, high thrust and low weight for the rocket. As usual the best you can do is 2 out of 3. If the ISP is high enough your exhaust is too low in volume to give you the thrust.
I just used an online delta v calculator and it looks like super heavy could almost achieve orbit on its own. If they could pare off 10 tons of weight it just might barely make it to LEO totally dry.
Re: Who would buy it? (Score:3)
âoe Speaking at the 32nd Space Symposium in Colorado Springs, Colorado this week, ULA president and chief executive Tory Bruno said it would take a series of 10 launches just to recoup the manufacturing and logistical costs associated with building and recovering a returned booster.â
Thereâ(TM)s no way SpaceX could ever compete with ULA by reusing boosters! Thatâ(TM)s definitely not the way forward! /s
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Thereâ(TM)s no way SpaceX could ever compete with ULA by reusing boosters! Thatâ(TM)s definitely not the way forward! /s
He misspoke. He meant to say that there is no way ULA can compete with SpaceX if SpaceX is using reusable boosters.
Of course SpaceX is planning their new rocket to be FULLY reusable. So ULA can surely compete with that right?
Re: Who would buy it? (Score:4, Insightful)
Bad Idea: One Vender Complete Missle System (Score:2)
wasting + $40 billion on a rocket was a good plan (Score:4, Insightful)
This was about playing Santa Claus with tax dollars.
Getting a rocket into orbit was somewhere on the 10th place of things to do.
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It would be really dumb to blow up the very people who buy his mediicre cars.
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Also dumb to blow up the people who provide the taxes that pay for his government launches. The red states have a lot more people who are anti space/anti technology so provoking those who are pro space pro technology when his whole thing is technology and space is DUMB.
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Also dumb to blow up the people who provide the taxes that pay for his government launches.
Ah, but that depends on what you mean by "provide". You say the taxpayer, but they just pay taxes into the general fund. It's congress that specifically provides the taxes that pay for the government launches, not The People. As long as they grease those people properly, the fundings will continue.
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Hear my prayer! (Score:2)
Please, Adam Smith, let it not be a hedge fund. Those are bastions of short-term thinking. If one of them acquires ULA, the assets will swiftly be melted down for beer cans.
Several Sales Options (Score:2)
The simplest deal would be of Lockheed or Boeing decided to buy the other out. Either could be looking to do that now.
Another option would be Blue Origin, as they already partner on engine sales, but only if Blue Origin is getting a cash infusion from Bezos.
I don't think the government would allow the ESA or other European company to buy them, but otherwise that would be an interesting idea.
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I think the Jeff Bezos option is a valid one. Blue Origin havent built much of anything and ULA has the expertise to actually build and launch rockets. It might be the only thing that turns Blue Origin around.
For years now I've been hearing about how each year Bezos has put $1 billion into BO. But I never seem to hear about his Amazon stock being sold to allow it. So my specualtion has been either A/ it's a lie or B/ he just transfers Amazon stock but doesn't actually sell it and relies on government contracts to actually pay for things (which would explain why there is so little progress). He does get the contracts even with no orbital booster so it might work out if he did put in a couple of hundred million
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When you're that wealthy, you use often use the stock as collateral, borrow the $, and write off the interest - which until just recently was very, very low.
Musk selling stock is partly due to it's volatility and partly for his showmanship.
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The simplest deal would be of Lockheed or Boeing decided to buy the other out. Either could be looking to do that now.
Another option would be Blue Origin, as they already partner on engine sales, but only if Blue Origin is getting a cash infusion from Bezos.
I don't think the government would allow the ESA or other European company to buy them, but otherwise that would be an interesting idea.
The US, having spent (literally) billions to ensure having a reliable and viable future military launch provider, will almost certainly require the buyer to be a US owned and operated company. Lockheed would seem to be the most likely (and the easiest to get approved).
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It's speculated that Boeing is the one that wants out of the partnership. They need money to pay down several write off.