Good Russian Businessmen

I’ve said for years that no one, including the Russians, knows how much their space activities and hardware costs, because of the nature of their economy, in which proper cost accounting never existed under the Soviets. Presumably they have had time to fix this problem, but they don’t seem to have done so:

Russian engineering corporation Energomash sold rocket engines to the United States at half production cost, losing $32 million as a result, the Russian Comptroller’s Office said on Wednesday.

It did not say how many RD-180 engines were sold, only saying the loss was sustained in 2008-09, constituting 68 percent of the firm’s total losses.

This is going to be a headache for United Launch Alliance, which is going to have to purchase more engines in the future for the Atlas, and the price is likely now going to more than double, which means yet another increase in their costs. I think that Aerojet is actually licensed to manufacture the engines here, but they’ve never done so because it would cost much more than it has been to purchase from Energomash. This may change that calculation, but I’m not sure that it’s going to make sense even at the higher purchase price. It may still be cheaper to buy Russian. Of course, there could be a point at which the Pentagon makes a decision to subsidize the price, just for reasons of national security, to reduce our dependence on a nation that does not have our best interests at heart. If only we could get Congress to be sensible about Commercial Crew, so we can end our dependence on the Soyuz as soon as possible.

13 thoughts on “Good Russian Businessmen”

  1. Note this is from the Russian controller’s office. Translated, if you are going to replace Soyuz with CCdev on Atlas you will still pay us!

  2. Aerojet is licensed to build the NK-33 (AJ26) engine used by Orbital’s Taurus II. Pratt & Whitney has the RD-180 license. Aerojet and Pratt & Whiney should get together to produce an RS-68 with Aerojet’s Thrust Augmented Nozzle using LOX/Kero for the augmented phase. That would increase initial thrust, provide atmospheric pressure compinsation and get the Russians out of the loop.

  3. If I am not mistaken, the DoD seems to have a slowly percolating plan to develop a replacement in the post-2018 timeframe. They had a proposed project recently to develop a precurser engine of the 200klb thrust range, which I presume would lead to a larger engine at the end of the decade.

    The original RD-180 contract was for 100 engines. The flight rate of Atlas has used up only a minority of those engines, so the original contract would cover actual demand for some time yet. It’s not that an American engine would cost more, but that a built American engine factory would more or less sit idle for a time period of a decade while the original Russian contract covers the actual demand.

  4. So far as I can tell, the only people who have asked SpaceX about buying Merlins is geeks at space conferences. When asked Gwynne and Elon always say something like “we’re very interested in talking to anyone who wants to do that… *very*” and then nothing. Maybe when their production gets up to a few hundred a year people will start knocking, but you’ve got to remember that this industry is sick and broken and it will never become healthy with entities buying parts from other entities without price gouging and dirty tricks until the government gets out of the picture. No-one gets a bad reputation for ripping off the government anymore, it’s just considered good business, so why would you want any other customer?

  5. reader Says:
    “On a related note, this was just reported yesterday, russian defense tech sector is in for a trouble”

    That was a very interesting quote from Medvedev. Maybe not too surprising, considering the way they handle pirates.

  6. One of my sources, usually reliable, told me that P&W got the license to manufacture the RD-180, along with the entire design disclosure *except* the coating technique for the oxygen preburner duct. Russian engines run all of the oxygen through a fuel-lean preburner, discharge it through the turbine to drive the pumps, and duct the turbine exhaust into the main combustion chamber. The oxygen ducts need a special oxygen-resistant coating, or they burn through. It’s the Russian “secret sauce.”

    Aerojet selected the NK-33 rather than the RD-180 to license, just because of this coating issue. The NK-33 runs at slightly lower pressure, and even though the oxygen preburner temperature is the same, there is a critical pressure below which the duct needs no coating. The NK-33 is below that pressure, while the RD-180 is above it.

    As I said, my source on this is usually reliable, and in an unusually good position to know the real story. So even if it isn’t true, it ought to be…

  7. The RD-180 is only an issue for around 4 US Military launches per year. While they are critical for the US Military, there are many options other than Atlas V.

    The RL10 upper stage engine is another issue for the Atlas V, because P&W has supposedly raised prices 6-fold to $30-Million per RL10 engine versus $5-Million.

    The Taurus II 1st stage using the NK-33 has similar performance to the Atlas V 1st stage (remember that the Atlas V was going to use NK-33s at one point).

    It is likely that by 2017 SpaceX, OSC Taurus II, and Blue Origin will have many more launches into space per year than the current Atlas V launches per year. It is unlikely that CCDEV2 competitors will really use the Atlas V beyond demo launches, because ULA has not finished commitments to manufacture it in Alabama. The US Military has many options with other rockets, and the Russians should not overplay their leverage with the RD-180.

  8. It looks like the Air Force wants to break the ULA monopoly by sponsoring a test launch to demonstrate required capabilities.

    The U.S. Air Force is crafting a plan to stimulate competition to break the virtual monopoly held by the United Launch Alliance’s Evolved Expendable Launch Vehicle product family, even as USAF studies ways to reduce EELV cost.

    Among the competition initiatives is a test launch for companies seeking to break into the defense launch market.

    Maj. Gen. John Hyten, director of space programs for the Air Force acquisition office, says the service has requested $135 million in the fiscal 2012 budget plan to fund competition for launch of NASA’s Deep Space Climate Observatory (Dscovr) satellite (formerly called Triana) as a flight test for a new launch provider. Space Exploration Technologies Corp.’s (SpaceX) Falcon 9 would be an appropriate launch vehicle for a satellite of its size. Though the parameters have not yet been determined, Hyten says the test will be designed to demonstrate a variety of requirements.

    “They may have to do an upper-stage coast, for example. . . . That is a very important capability for us—getting into geosynchronous orbits,” Hyten tells Aviation Week. “I would imagine it is going to be a fairly interesting launch.”

    Dscovr, originally proposed by then-Vice President Al Gore, was designed to stare at Earth from geosynchronous orbit and gather other scientific data. The project was pulled from the manifest of the ill-fated Columbia shuttle mission in 2003 and shelved thereafter. While the winner of the Dscovr launch test will earn government support for its work, future liftoffs are not guaranteed.

    The service also plans to compete launch work supporting the Space Test Program, which managed launches for the Defense Department’s research and test community.

    Together with NASA and the National Reconnaissance Office (which builds and launches U.S. classified satellites), the Air Force is drawing up a list of criteria for companies seeking to sell launch services to the Pentagon. These include SpaceX, which plans to re-fly the Falcon 9 launcher in early 2013. Alliant Techsystems is also teamed with Astrium to offer a capability using an Ariane 5 core. And others, such as Orbital Sciences Corp., are proposing concepts for smaller launch vehicles.

  9. “Maj. Gen. John Hyten, director of space programs for the Air Force acquisition office, says the service has requested $135 million in the fiscal 2012 budget plan to fund competition for launch of NASA’s Deep Space Climate Observatory (Dscovr) satellite (formerly called Triana) as a flight test for a new launch provider. Space Exploration Technologies Corp.’s (SpaceX) Falcon 9 would be an appropriate launch vehicle for a satellite of its size. Though the parameters have not yet been determined, Hyten says the test will be designed to demonstrate a variety of requirements. ”

    Gee.. somebody proposed that very idea on this very board some weeks ago and his initial’s weren’t GM for a change.

  10. RD-180 coating – that’s been the story I’ve got as well. When pushed, certain people claim this is “not an issue” on demand. So you get two stories, not surprisingly. Perhaps someone doesn’t want to stick one’s neck out with a costly qualification process.

    Anyone who has had the slightest contact with weapons technology knows that costing is an ephemeral thing. The best costing you get is when you scale up production to massive volumes *successfully*, and again unsurprisingly the product may go through very different “formulations” before it gets to be acceptable.

    Look at cruise missiles jet engines as an example. Note that the attempt at doing small, low cost business microjets and “jet taxi” service was an attempt to leverage this into commercial markets, and even with the vast refinements .. it was still unacceptable.

    When you start off with *any* kind of technology in a weapons system, you lose *any* kind of cost controls no matter. Its an endemic process that can’t be avoided.

    That’s why the Merlin advantage is more unique than many see – it didn’t start off as a weapon but a cost leveraged system component. Avoided the problem entirely.

    Doesn’t matter the country – Natzi germany, US, Russia, France, … China, Brazil, India , … they all suffered from this difficulty. It is endemic to the means by which you pursue such. I wouldn’t be surprised if even North Korean were found to have the same. So saving money … by repurposing … works fine for “onesy twosy” … kills you for more. But by that point, its “flight qualified hardware” … good luck in attempting to get it out of your technology development stream.

    BTW, taking things into the arsenal system from “commercial” has problems too – many weapons systems disasters too. But when it works, it leads to long term reliable and low cost systems. As opposed to reliable and high cost systems.

    Now where would you use a Merlin 1 engine, besides where SpaceX does? Hint – anywhere a Fastrac had/should have been …

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