ULA vs SpaceX: An Empire Strikes Back!

          By Glen Strom

The book of conventional wisdom says that a large, established company can’t be as nimble as a small company. The big guy just can’t change direction fast enough to ward off the brash upstart. 

The Atlas family of rockets, which were originally designed in the late 1950's by the Convair Division of General Dynamics, for use as intercontinental ballistic missiles (ICBM). From 1962 to 1963, Atlas boosters also launched the first four American astronauts to orbit the Earth. The Atlas V is still in service with ULA, as part of the USAF EELV program. Graphic c/o FAA.

United Launch Alliance (ULA) is out to prove that some books should be left on the shelf to collect dust. The joint venture, set up by Lockheed Martin and The Boeing Company in 2006, has used Delta IV and Atlas V rockets to successfully launch dozens of US Air Force (USAF) payloads as part of the Evolved Expendable Launch Vehicle (EELV) program. Since its creation  in the 1990s, the EELV program has become the primary program for launching high-value and highly profitable US military satellites.

Elon Musk. Picture by Dan Taylor / Heisenberg Media. 

Enter the aggressive startup. 

Space Exploration Technologies (SpaceX) of Hawthorne, CA, wanted some of that lucrative USAF business. SpaceX CEO Elon Musk saw his chance during the March 5th, 2014, meeting of the US Senate Appropriations Subcommittee on Defense to launch an attack at what he saw as ULA’s big weakness.

Cost.

As outlined in a March 5, 2014 NASASpaceFlight.com article, “SpaceX and ULA go toe-to-toe over EELV contracts,” Musk claimed that the USAF paid ULA more than $380Mln USD per launch ($472.19Mln CDN). SpaceX, he said, could do the same launches for under $90Mln USD ($112Mln CDN). 

Musk also pointed out that ULA’s Atlas V rocket uses a Russian RD-180 engine, an old, but still physically reliable engine, surrounded by potential political problems due to the current tensions over Ukraine.

Now, back to the point about those slow-to-respond established mammoths of industry. Some big companies would have shrugged off the attack from the upstart and carried on as before.

That seemed to be the case with ULA. As mentioned in the NASASpaceFlight article, ULA’s CEO at the time, Michael Gass, said little more than ULA had a great track record and Musk’s numbers were categorically wrong.

The Delta rocket family. Rolled out in 1960, two variants, the Delta II and the Delta IV, are still being manufactured by ULA as part of the EEVL program. As outlined in the March 3rd, 2015 Space News article, "ULA Targets 2018 for Delta 4 Phase-out, Seeks Relaxation of RD-180 Ban," ULA is slowly phasing out the Delta, due to its high cost.  Graphic c/o  USAF.

ULA’s plans for change must have been in the works—rocket development has a long lead time—but for whatever reason, the board decided that Gass wasn’t the right guy to lead that change. He was replaced by Salvatore “Tory” Bruno, the president of Lockheed Martin Strategic and Missile Defense Systems, on August 12, 2014.

PR-speak often veils true meaning in the corporate world, but it’s easy to read between the lines in a statement Gass made that’s quoted in “United Launch Alliance Taps a Lockheed Executive To Replace CEO Gass,” an August 12, 2014, article at SpaceNews.

Mike Gass. Photo c/o NASA.

... Gass said he had planned to retire ‘in the near term’ but with ‘the changing industry landscape over the next several years, the Board of Directors and I have agreed that the immediate appointment of my successor to begin the leadership transition is in the best interest of the company...

The new guy didn't waste any time making it clear to SpaceX that they were in for a fight. In an October 16, 2014, Denver Business Journal article, “ULA plans new rocket, restructuring to cut launch costs in half,” Bruno addressed the cost factor directly.

We’re cutting [ launch cost] in half again, we’re getting in to the commercial [launch] marketplace. We will also adjust design our teams and our organization to be the most effective at delivering that.

Bruno again outlined his plans in a February 17, 2015, article in Aviation Week, “New Rocket, White Tails In ULA’s Long-Term Strategy.”

Two projects are under way: a new upper stage to replace the existing RL-10 upper stage, and a new booster called the Next-Generation Launch System (NGLS).

The new booster/upper stage combination will replace both the Atlas V and the Delta IV rockets. A new methane/LOX engine from Blue Origin, the company owned by Amazon.com tycoon Jeff Bezos, will provide the power.

Flight testing for the NGLS is scheduled for 2019.

ULA will also reduce the number of launch pads it maintains from 5 to 2. The one on the east coast will support the last launches of the Atlas V and Delta IV, as well as the NGLS.

Further evidence shows that ULA is thinking more like a competitive commercial company. They’re ordering hardware further in advance than they used to for white tail rockets (vehicles that haven’t been sold yet) for an expected increase in business. The old, conservative ULA was loath to order parts without a committed customer.

Where’s that increased business coming from? NASA commercial launches and non-governmental commercial launches of communications satellites. Bruno said in the Aviation Week article, “We intend to go aggressively now after NASA commercial activities—cargo and crew—as well as pursuing [the] commercial market place which is largely comsats in the GEO orbit.”

Bruno’s moves aren't just behind the scenes. His public profile is noticeably higher than the previous CEO’s. An article from January 21, 2015, at Adweek, “Meet the Most Interesting Space CEO You’re Not Following on Twitter,” covers Bruno’s entry into social media. He has a lot to say in his Twitter account, @torybruno, about his company, the industry, and his main competitor. He even jokes around with someone who created a fake Tory Bruno Twitter account.

Glen Strom

Some big companies falter when they’re pushed by a new, innovative competitor. Some, like ULA, fight back. In the end, commercial space should benefit from the innovation that comes from the competition between these two nimble companies.
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Glen Strom is a freelance writer and editor with a background in business and technical writing. He's also the editor of The Gazette Weekly, the newsletter of the Canadian Space Society.