Rocket Whiners

This is rich.

Russia’s resident blowhard, Dmitry Rogozin, has been shooting off his mouth again. This time he complained about SpaceX “price dumping”. He’s not the only one, Arianespace has alleged the same thing in the past. I’ve also heard ULA and Boeing fans on social media sing similar notes against SpaceX.

Russian nationalist Rogozin, former Russian envy to NATO and former Deputy Prime Minister of the Russian military-industrial complex, he currently serves as Director General of Roscosmos. Author of the famous “trampoline” Tweet a few years back after the U.S. Congress sanctioned him along with other Russian officials over the invasion of Crimea in 2014, he likes calling himself a troublemaker and is known for his outspoken wit…sometimes without thinking through the consequences.

In detail, the price dumping claim is that because SpaceX charges four times as much for U.S. government launch contracts as they do for commercial launches, that that amounts to a government subsidy that facilitates pricing that undercuts and steals business away from their commercial competition…namely Roscosmos, Arianspace, and United Launch Alliance.

Does SpaceX make more money per launch from government contracts than they do from private sector launches? I don’t know. I mean, I don’t have access to the cost of all the extra paperwork, lobbyists, lawyers, uncompensated design changes, and other losses necessary to participate in the U.S. government procurement system. Having not run those numbers I can’t fact check that part of the claim.

SpaceX allegedly does charge the government four times what they charge the private sector. I’ve seen some of those price comparisons and they basically match up the very public amounts awarded on these government contracts against the advertised base price of a Falcon 9 launch to Low Earth Orbit (LEO) of $62 million, plus estimates for additional costs and services. I’m told that such ball-park figures are necessary for making these comparisons because the exact prices being charged for commercial launches are protected by non-disclosure agreements.

People like Rogozin like to talk about low launch prices like they’re a bad thing. Some folks here in the U.S. still do that as well. These are mainly people who benefit financially from the wasted billions flowing out over the edges of the traditional space launch industry and oozing from the corruption holes in the U.S. government procurement system. Meanwhile, the high cost of access to space stifles innovation and strangles tech advancements, leaving the public with the impression that the whole thing is just a big fat waste of money. Most people here in the U.S. have grown sick of it. Elon Musk went to the Russians and tried to buy human access to Mars, (not for just some rich-guy joy ride but to start an actual business) when he first became wealthy after PayPal went public. He found that the price they wanted to charge was way too high to get anything done profitably. Russian launch prices and arrogance are part of the reason SpaceX exists today.

Roscosmos and Arianspace both still use one-shot rockets, and have been heavily subsidized by their respective governments. So, I don’t see how either of them can honestly accuse SpaceX of living off of an alleged pocket subsidy. I also have to ask…how can SpaceX be overcharging NASA or the United States Air Force in order to undercut their competition on commercial launches, when they severely undercut their competition on government launches as well? Both NASA and the Air Force have said as much publicly and those numbers are very available for all to see. Indeed, the high price and low value in Boeing’s proposal versus SpaceX got them booted out of the Lunar Logistics Services contract competition. Yes, Boeing, one of the very top most prolific and respected spacecraft manufacturers in the world, has been removed from consideration for an upcoming, next generation, envelope stretching NASA project, in part due to their lack of ability to compete with SpaceX pricing on government contracts.

I should note that SpaceX also just finished beating out the vaunted Boeing on both price and performance for NASA’s Commercial Crew program and will start shuttling astronauts from at least three different countries (so far) to the International Space Station this summer, while NASA babysits Boeing through a line by line review of their flight software in preparation for a re-flight of their failed uncrewed test mission.

I should further note that a more than significant percentage of SpaceX business has been commercial launches…many of which are for their own upcoming Starlink Internet constellation. Yes, they fly for NASA, and kicked in the doors of the U.S. Air Force to wrench United Launch Alliance (ULA) out of their exclusive deal, but they certainly don’t live off the government. As of this latest Starlink launch, the 80% reusable Falcon 9 is now the world’s most flown launch vehicle…having passed up the ULA Atlas V. SpaceX plans to launch more payloads into orbit this year than all of Russia.

ULA refused to even put in a bid for an important series of Air Force launches for the new GPS upgrade, once SpaceX was allowed to participate in the bidding. The Air Force insisted that the costs in the bid couldn’t be subsidized from other projects and ULA claimed that their bookkeeping simply didn’t work that way. When asked in a Congressional Armed Services Committee hearing with Tory Bruno of ULA how SpaceX builds rockets at such low cost, Gwen Shotwell, CEO of SpaceX, tossed the question back to Bruno…

“I don’t know how to build a $400 million rocket, I don’t understand how expensive they are…rather than [ask] how am I less expensive than ULA, I don’t understand how ULA is as expensive as they are.”

Gwen Shotwell — CEO of SpaceX

So I’m going to say something similar here. Dmitri, if you’re listening, please tell us all, if you are now able to lower Roscosmos launch prices by 30 percent to face SpaceX competition as you’ve recently said, then why didn’t you do that back when SpaceX and Arianspace first started kicking your butt on new launch contracts, collectively winning over 80% of all new business world wide year after year, largely on pricing? More importantly, where has all that extra money that Roscosmos apparently doesn’t need been going? It certainly hasn’t been spent on modernizing your antiquated fleet or on improving your quality control.

You’re just sore because Roscosmos can’t sell business anymore while you and your rich, corrupt buddies continue to feather your nests off of Russia’s spaceflight industry. You’re going to have to tighten your belts a bit, reinvest, and innovate if your country is going to participate in the next space race. Maybe if you get tired enough of the view behind the lead dog on the team, Russia will do what is necessary to become a great space leader again.

Of course, snide trampoline remarks about your customers don’t help either.


~ by Bill Housley on April 25, 2020.

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