Sunday, August 16, 2015

One Year Later

Click the arrow to watch the Tory Bruno interview. Video source: UnitedLaunchAlliance YouTube channel.

One year ago, on August 12, 2014, United Launch Alliance announced that Tory Bruno had been appointed President and Chief Executive Officer.

Although it was never explicitly stated, Bruno's actions in the last year suggest he was charged with changing the ULA culture.

United Launch Alliance was created as a legal monopoly in 2006. Its parent companies, Boeing and Lockheed Martin, claimed they could no longer remain in the launch business as competitors due to lack of demand from the government. To assure that the Department of Defense, and to a lesser extent NASA, would have an uncrewed launch option other than the Space Shuttle, the Federal Trade Commission reluctantly approved the creation of ULA.

As with any monopoly, prices went up in the name of “mission assurance.” ULA's two launch vehicles, the Atlas V and Delta IV, have a virtually perfect record.

Commercial satellite companies, meanwhile, took their business overseas to places like Arianespace and Khrunichev. The last non-government customer to launch from the Cape with ULA was in 2009.

The emergence of SpaceX with a competitive business model returned the commercial launch industry to the Cape. NASA awarded SpaceX commercial cargo and crew contracts, and in May the U.S. Air Force certified SpaceX for military payloads.

Congress passed a law in December 2014 mandating ULA phase out use of Russian RD-180 engines on the Atlas V for military payloads, so it became clear to ULA management that the culture had to change if the company was to survive.

In his first year, Mr. Bruno has often stated that he intends to make ULA competitive with other launch companies. In April, ULA announced a new launch vehicle named Vulcan which will be partially reusable. ULA even held an Internet-based contest to name the rocket; Vulcan became the popular choice after the death of Leonard Nimoy.

One year after his ascension, ULA posted the above interview with Mr. Bruno on its web site. He discusses the challenges in changing the corporate culture, to make it more competitive and less secretive.

Two competitors, Orbital ATK and SpaceX, have suffered launch failures in the last year, giving ULA the high ground when it comes to mission assurance. But ULA launches cost by some estimates roughly three times more than SpaceX. How much “assurance” are customers willing to buy down by flying with ULA? For the government, it's just tax dollars, but with commercial satellite companies they have to pay for insurance — or choose not to insure, absorbing the risk.

If not for SpaceX, most likely ULA would still be a government monopoly, commercial customers would still be launching overseas, and jobs wouldn't be returning to the Cape. In an odd way, one could argue with Mr. Bruno owes his job to Elon Musk.

What a little competition can do.

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