Category Archives: Business

Fascists Of The Corn

David Freddoso is still angry about our insane and, in my opinion, criminal ethanol and sugar policies:

The problem is that our sugar industry has even better lobbyists than big ethanol. They enjoy price supports, which we pay for both through the Treasury and in the supermarket. The price of our sugar is usually twice that of the world market. The sugar growers love it — even if they cannot sell all of their sugar, they have a guaranteed government buyer at an inflated price. The corn growers love it too, because high U.S. sugar prices push our food industries to use high-fructose corn syrup (ever seen that on a product label?) as an alternative sweetener — yet another artificial support for the world price of corn.

Not to mention wreaking havoc on the Everglades. Price-supported sugar cane is using up a lot of the water that both south Floridian humans and animals need, and they do this with the same political clout that they use to get the subsidies and tariffs, for an industry that is not all that big in terms of the economy.

Even if we want ethanol, we can’t solve the problem by importing sugar, because there are tariffs in place. We can’t import the ethanol itself because there’s a high tariff against that, too. Wherever you turn, there’s no way out — Americans don’t enjoy economic freedom, we live in a managed economy.

It makes me especially proud of my country when I see Sen. Chuck Grassley (R-Iowa) call foreign delegates’ concerns over a potential doubling of world hunger “a joke…”

Let’s call these people out for what they are–Republicans and Democrats alike–fascists. Not that there’s anything wrong with that.

[Update a few minutes later]

Biofool.

[Update early evening]

Oh, wonderful:

Key House and Senate farm bill negotiators reached agreement today on the main elements of the farm bill…[T]he five-year bill would raise the target prices and loan rates for northern crops beginning in 2010, raise the sugar loan rate three-quarters of a cent and include a sugar-to-ethanol program.

Oh, that’s just great. We have a program that makes us overpay for sugar, and now we’re going to start a new program to subsidize the ethanol we create from it — because without the subsidy, the inflated sugar price we’ve created will make the ethanol unprofitable.

Just when you think it can’t get any worse, they always find a way.

Rocket Racing Competition

Alan Boyle has more info on this morning’s press announcement from the Rocket Racing League. It looks like they haven’t necessarily dropped XCOR as a supplier (as I previously speculated–note that there is a comment in that post, ostensibly from someone from the RRL, saying it was good news for everyone), but are looking for more competition for propulsion, so now they’ll have a kerosene engine from XCOR and an alcohol engine from Armadillo. If they can spread the wealth and expand the industrial base for these technologies, that’s all to the good.

And this should gladden the hearts of LLC competitors:

Carmack recently said he would make rocket engines available to customers at a cost of $500,000 apiece. He declined to say exactly how much the racing league was paying Armadillo for the current project – but he said the project had a higher priority than Armadillo’s renewed push to win the NASA-funded Lunar Lander Challenge.

That could conceivably mean that they won’t even bother, and will leave the money on the table for someone else, but even if they compete this year, their chances of winning will be reduced if they’re not focused on it, so it could represent an opportunity for Masten, Unreasonable Rocket, and others.

Anyway, I’m glad to see this industry finally (literally) getting off the ground. I wrote a paper at STAIF ten years ago that we needed a racing industry to push the technology, just as occurred in the auto (and air) racing business. A lot of people at the session in which I presented it were skeptical at the time, but it looks like my vision is finally coming to fruition.

[Mid-morning update]

Here’s another pre-press-conference report from the New York Times.

[Update a couple minutes later]

Clark Lindsey live blogged the press conference via call-in. I don’t see any mention of XCOR.

Reinventing The Wheel

Thomas James has a question that I’ve often wondered about as well:

I have to wonder, has every project I have ever worked on with LM (X-33, VentureStar, ET, CEV/Orion, among others) started from scratch with everything from numbering schemes to release processes to configuration management to data vaulting to drawing formats and standards to basic skill mix and team structures? You’d think that after so many decades that a lot of this stuff would have become routine by now — revised periodically as new technology becomes available, of course, but not built anew every time.

A counter argument to this — and one I used frequently when confronted with the All-Encompassing Michoud Excuse for Not Improving Processes: “That’s the way ET does it” — is that one ought to take advantage of the start of a new program to incorporate the lessons learned from other programs, thereby continuously improving the way business is done. Unfortunately, there doesn’t seem to be a middle ground between status quo and Year Zero when it comes to these things.

Every time we used to do a proposal at Rockwell/Boeing, and have to describe the systems engineering process, it seemed like we had to come with a new process flow description and graphic, as though we’d never done this before, instead of taking an existing one and tweaking it, and this applied all across the board–in risk mitigation and management, trade analyses, etc.

If I were running one of these multi-billion dollar corporations, I’d put someone in charge of boilerplate and legacy, so that there was a one-stop shop of best practices and material for use in both proposing and managing programs. Maybe they have one, and I was always unaware of it, but if that’s the case, that’s a big problem as well.

What Are They, Chopped Liver?

Apparently Aerojet is getting into the responsive reusable engine business (albeit with Air Force funding). I think that’s great, but I have to wonder if the reporter has been paying attention to what has been going on in the industry:

The last US-designed and produced hydrocarbon engine was the Rocketdyne RS-27, based on 1960s technology and now out of production.

There may be some qualifying adjectives that would make that statement true (of thrust greater than X? Used in an orbital launch system?), but folks like XCOR and Armadillo, and Masten, and several contenders for the LLC would be surprised to learn that they haven’t been designing and producing hydrocarbon engines for the past few years.

The Dog That Didn’t Bark

The Rocket Racing League is going to make a press announcement on Monday, but the release raises some questions:

Rocket Racing League Composites Corp. will announce the acquisition of a leading aircraft manufacturer and a partnership with a leading engine manufacturer…

…WHO:
Granger Whitelaw, CEO, Rocket Racing League
Peter Diamandis, Co-Founder, Rocket Racing League
Adam Smith, Vice President, EAA
Len Fox, Test Pilot, Rocket Racing Composites Corp.
Scott Baker, President, Velocity Aircraft
Neil Milburn, Armadillo Aerospace
John Carmack, Armadillo Aerospace

We have a missing player, and a new player. XCOR was building the initial racers, but they don’t seem to be represented at the event. And this is the first time that I’ve heard Armadillo associated with the project. So apparently, for whatever reason, Armadillo is now providing propulsion for the racers, and they’re apparently acquiring an aircraft manufacturer (Velocity?). I wonder why they have to acquire Velocity. Can’t they just buy modified aircraft? Or maybe they’re being imprecise in language, and it’s also a partner?

This obviously raises many questions, none of which I know the answers to, but it would seem to be bad news (though of course by no means fatal) for XCOR. It certainly won’t affect their work on the Lynx. It’s also good news for Armadillo, and it means a new customer with apparent confidence in their hardware, even after the engine problems at the cup last October.

Perhaps the questions will be answered at the press conference, if asked.

[Update a few minutes later]

Actually, on reconsideration, it’s not even obvious that it is bad news for XCOR (though clearly John Carmack must think that it’s good for Armadillo, or he wouldn’t have done the deal). It could be that, now that they’re trying to focus on developing a true suborbital vehicle, the RRL work was proving to be a distraction for them that they’ve now gotten out from under. But it’s speculation on my part, either way.

The Dog That Didn’t Bark

The Rocket Racing League is going to make a press announcement on Monday, but the release raises some questions:

Rocket Racing League Composites Corp. will announce the acquisition of a leading aircraft manufacturer and a partnership with a leading engine manufacturer…

…WHO:
Granger Whitelaw, CEO, Rocket Racing League
Peter Diamandis, Co-Founder, Rocket Racing League
Adam Smith, Vice President, EAA
Len Fox, Test Pilot, Rocket Racing Composites Corp.
Scott Baker, President, Velocity Aircraft
Neil Milburn, Armadillo Aerospace
John Carmack, Armadillo Aerospace

We have a missing player, and a new player. XCOR was building the initial racers, but they don’t seem to be represented at the event. And this is the first time that I’ve heard Armadillo associated with the project. So apparently, for whatever reason, Armadillo is now providing propulsion for the racers, and they’re apparently acquiring an aircraft manufacturer (Velocity?). I wonder why they have to acquire Velocity. Can’t they just buy modified aircraft? Or maybe they’re being imprecise in language, and it’s also a partner?

This obviously raises many questions, none of which I know the answers to, but it would seem to be bad news (though of course by no means fatal) for XCOR. It certainly won’t affect their work on the Lynx. It’s also good news for Armadillo, and it means a new customer with apparent confidence in their hardware, even after the engine problems at the cup last October.

Perhaps the questions will be answered at the press conference, if asked.

[Update a few minutes later]

Actually, on reconsideration, it’s not even obvious that it is bad news for XCOR (though clearly John Carmack must think that it’s good for Armadillo, or he wouldn’t have done the deal). It could be that, now that they’re trying to focus on developing a true suborbital vehicle, the RRL work was proving to be a distraction for them that they’ve now gotten out from under. But it’s speculation on my part, either way.

The Dog That Didn’t Bark

The Rocket Racing League is going to make a press announcement on Monday, but the release raises some questions:

Rocket Racing League Composites Corp. will announce the acquisition of a leading aircraft manufacturer and a partnership with a leading engine manufacturer…

…WHO:
Granger Whitelaw, CEO, Rocket Racing League
Peter Diamandis, Co-Founder, Rocket Racing League
Adam Smith, Vice President, EAA
Len Fox, Test Pilot, Rocket Racing Composites Corp.
Scott Baker, President, Velocity Aircraft
Neil Milburn, Armadillo Aerospace
John Carmack, Armadillo Aerospace

We have a missing player, and a new player. XCOR was building the initial racers, but they don’t seem to be represented at the event. And this is the first time that I’ve heard Armadillo associated with the project. So apparently, for whatever reason, Armadillo is now providing propulsion for the racers, and they’re apparently acquiring an aircraft manufacturer (Velocity?). I wonder why they have to acquire Velocity. Can’t they just buy modified aircraft? Or maybe they’re being imprecise in language, and it’s also a partner?

This obviously raises many questions, none of which I know the answers to, but it would seem to be bad news (though of course by no means fatal) for XCOR. It certainly won’t affect their work on the Lynx. It’s also good news for Armadillo, and it means a new customer with apparent confidence in their hardware, even after the engine problems at the cup last October.

Perhaps the questions will be answered at the press conference, if asked.

[Update a few minutes later]

Actually, on reconsideration, it’s not even obvious that it is bad news for XCOR (though clearly John Carmack must think that it’s good for Armadillo, or he wouldn’t have done the deal). It could be that, now that they’re trying to focus on developing a true suborbital vehicle, the RRL work was proving to be a distraction for them that they’ve now gotten out from under. But it’s speculation on my part, either way.

The State Of The Industry

I mentioned yesterday that, in addition to hawking rockets, John Carmack had an assessment of the state of the industry and his competition. If you didn’t read it, it’s well worth a read, and I largely agree with it. Just a few quibbles:

Scaled / Virgin is the safest bet for success. Outside of the X-15, Space Ship One is the only example of a reusable, 100km class manned vehicle. Everyone else, us included, requires a lot more extrapolation for an investor to believe in, and the problem isn’t nearly as trivial as some people like to make it out to be with the “There are no technical challenges, just give us the money!” lines. It is not true that any old team could have won the X-Prize if Paul Allen had given them $20 million.

On this last sentence, while I don’t have any reason to think that John is aiming that comment at me in particular, I have made statements, both at Space Access a couple weeks ago and here, that some might mistakenly take to mean that I would dispute this. I have said that Burt’s success lay not (just) in his engineering talents, but more importantly, in his reputation and ability to raise the money. When I said that the mystique of Burt has been broken, my point was that many people believed (and still may believe) that only Burt could have won the X-Prize, in terms of technical capability, and I don’t believe that to be the case.

Clearly, only Burt was capable of raising the money (at least from Paul Allen) to win the X-Prize, and that this was the critical achievement. I do believe that there are others who, had they been adequately funded (i.e., on the same level as Burt) could have won as well. That does not mean that I believe that “any old team” could have done it–there were obviously many teams that couldn’t engineer their way out of a wet kleenex. It takes a combination of engineering capability and funding. There was more engineering capability than funding available, at least at the time, and only Burt had both, so Burt won.

I also agree with John’s assessment that Scaled’s approach is low risk, but also high marginal cost and not particularly operable (and not as safe as advertised from the standpoint of propulsion–I’ve long been on record as saying that hybrids have been overhyped from a safety standpoint, and have suggested to Alex Tai that he should be soft peddling this aspect). They’ve chosen a hyperconservative design that will be safe, but they also risk getting undercut in price by more operable systems with lower marginal costs, and marginal costs are important when you get into a price war. Sir Richard has the funds to subsidize the system for a while to compete, but I doubt if he wants to do it forever. So they are smart to be a space line that will have access to other vehicles, because I suspect that they’re going to decide that they need options other than WK2/SS2.

I also agree that Dreamchaser is not a promising concept (again, partly because hybrids have been overhyped). I thoroughly agree with his pithy assessment of EADS/Astrium’s laughable proposal: “Oh, please.”

I think that his assessment of his own efforts is valid. He has taken an approach of build a little, test a little, and expanded it to build a lot, fly a lot, and he does in fact probably have more test time than all the other folks put together (though as he notes, XCOR is likely to catch up quickly as they move forward with X-Racer and Lynx).

The great thing is that we don’t have to bet on a single horse. There are a number of competing approaches, both in terms of how to develop vehicles, and what kind of experience to offer to the customers. You’ll never get me in the fishbowl, both because I’d feel much too exposed, but also because I don’t think that I’ll ever trust engines alone to get me down safely. That doesn’t mean that it won’t be a successful concept in the market, though. Unlike many, I don’t foolishly extrapolate my own interests to the rest of the marketplace. I think that there will be different strokes for different folks, and that only by trying a number of different approaches will we see how many of them will be successful, and which will be most successful, which is something that will never happen under a government space program (though we had at least a shot at it under Steidle’s plan for a CEV fly-off, until Mike came along and canned him, and implemented the One True Concept).

We’ve been talking for a long time about a return to the early days of aviation, with a wide variety of approaches, and letting the market sort it out. It appears that we’re finally on the verge of seeing that happen, and I find it very exciting, for all that it’s belated.