Business, Space

The Pressure Is On

15 Comments

…at SpaceX. Alan Boyle talks to Elon Musk.

I think I’m going to be on Which Way LA this afternoon with Elon, talking about the moribund manned space industry in southern California. SpaceX is the only player standing.

[Update early afternoon]

I’ll definitely be on the air, in a little over half an hour. KCRW streams, so you can listen on the Intertubes, if you’re not near an FM radio in southern California.

[Bumped]

15 thoughts on “The Pressure Is On”

  1. He’s right that SpaceX shouldn’t be viewed as carrying the whole commercial space torch, but I still hope Falcon 9 has a very successful maiden voyage.

  2. Rand,

    Locating in Southern California made sense for SpaceX when he was going to launch out of VAFB, but he took a real lost on the venture.

    With that advantage gone the cost of advantages of moving out of the state to a better business environment are very strong. Imagine the costs saved if he was building his rockets in Texas near his test site, or in Florida where they will be launched. I wonder how long SpaceX will hold out.

    I expect the only thing keeping him there is his tight development schedule for the Falcon 9 and his sunk costs in his plant.

  3. One can argue OSC is still in the manned launcher business.
    the Taurus 2 has a COTS contract, and in the future OSC will no doubt
    argue they can expand it to COTS D capacity.

  4. The plant is significant and moving it would put a many month pause in the plan. also with 1K employees, what percentage would move?

    Clearly when flying F1 from VAB it made sense, flying F9 from KSC? not so much.

  5. > == I expect the only thing keeping him there is his tight
    > development schedule for the Falcon 9 and his sunk
    > costs in his plant.

    In relocating factories, realestate folks say in the end — the site that offers the shortest commute for the CEO always wins.

    😉

    Musk really loves the San Fran area — it might really be the desisive factor.

  6. Yes, and Elon is also stuck with his Tesla plant being in the bay area. And after getting a $400 million loan from Uncle Sam for it, he needs to make sure it is moving forward as well. So although it may make business sense to relocate he is basically trapped in California for now.

  11. As sucky as CA’s political climate is, there is a pile of good aerospace talent from San Diego to Mojave, and lots of those people have zero interest in moving. Staying in SoCal makes people sense to SpaceX.

  12. Does NASA have an overall negative effect on the public’s reaction to space entrepreneurs? Everyone seems to love Burt Rutan, but is that just because he isn’t doing orbital yet?

  14. I really think commercial crew could be as important as the decision to outsource air mail in the 1920s. That’s what got Charles Lindbergh going, and all the other early airline pilots. If the Post Office hadn’t outsourced air mail, I think there would have been a huge delay in the advent of everyday air travel.

    The air mail analogy has been used many times but I wonder how many people are familiar with what actually happened back then. It’s true that the government offered subsidizies to the early airlines to carry the mail. The fact is that until the DC-3 came along 75 years ago*, the only way the airlines could make a profit was by taking advantage of the airmail subsidizy. The DC-3 was the first airliner that could make a profit carrying only passengers.

    Now, in 1933, the Congress held an investigation on what came to be known as the Spoils Conference – a meeting between the Postmaster General and airline executives in 1930 on the subject of the subsidizies. The outcome of this was that FDR canceled the mail subsidizies and ordered the Army was directed to carry the mail. Unfortunately, the Army wasn’t up to the job. Few of their planes or pilots were up to the challenges of flying the mail in bad weather. In short order, 10 Army pilots were killed in crashes and FDR reversed the order. This was the infamous Air Mail Scandal.

    No analogy is perfect but the COTS contract is similar to those air mail subsidizies. It allows the companies to make a profit earlier than what would otherwise be possible, fostering outside investment and speeding development of the private launch sector. In this case, COTS is less a direct subsidizy than a fee for service contract.

  15. Larry J,

    Its also important to remember what led to the “Spoils Conference” which was abuse of the early contracts. On common technique was to use a 1 lb padlock to secure a 1 lb bag of mail, basically doubling what the carrier received since they then charged the Post Office for 2 lbs of cargo.

    Also the reason the U.S. Army failed is a cautionary note. Unlike the airlines, the Army didn’t have many transport aircraft since they often contracted with the airlines for transport service. The few transports they had were generally attached to fighter and bomber squadrons since the Army didn’t have any Air Transport squadrons at the time. Because it didn’t have any transport squadrons most of the mail had to be carried in fighters or 2 man observation aircraft designed only for daylight tactical air operations in good weather. Occasionally bombers like the B-10 were used, but these were also in short supply.

    Given how bad the winter weather was that year, and that the majority of aircraft the military had available were not intended for winter flying, its amazing more aircraft were not lost.

    BTW one result of the Airmail Scandal was the realization the military needed its OWN transport service as redundancy to its existing reliance on the commercial airlines. This led to the U.S. Army purchasing a number of DC-2 aircraft (called the C-33) to equip the Army’s First air transport squadron.

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