Northrop Grumman buys Scaled Composites [Update]

So, is this a good thing? I'm not so sure...

Posted by Frank Glover at 07/20/07 14:17:10

My first thought was, have I fallen through a timewarp to April 1st? My second thought was "oh s**t". A plump, contented dinosaur is now picking mammalian fur from between its teeth :-(

Posted by Stellvia at 07/20/07 14:59:50

It was by invitation, the sky isn't falling.

Posted by Use that link at 07/20/07 15:22:35

I second Stellvia's reaction: Oh shit.

Posted by Brian Swiderski at 07/20/07 15:30:56

According to the article, NG already owned 40% - Who owned the other 60%?

Posted by Ferris Valyn at 07/20/07 15:31:11

"It was by invitation . . . "

????????????????

And how did you come by this information and when are you going to share more of it?

Posted by Rob Abiera at 07/20/07 16:00:59

I do see another possiblity - NG doesn't have a segment of the space launch market, at all. That raises the question - can they/are they really able to be considered of the dinosaur variety (and actually, I've got to say, I really hate that comparison - had it not been for the asteroid strike, Dinosaurs would be kicking our buts - but I digress)?

If they wanted access to the launch market, and they see whats happening with Newspace, this would give them a quick way to get into the industry.

Im not convinced this is a bad thing, but by no means am I convinced its a good thing

Anyway, my 2 cents

Posted by Ferris Valyn at 07/20/07 18:23:33

While I don't doubt NG has taken a sincere interest, their instinct will be to bring Scaled under closer control as its revenue from TSC ramps up--especially if SpaceShipTwo becomes a generic vehicle beyond the Virgin brand. Being with Northrop might actually make their SS2 operation more efficient once established, but it also probably means you can kiss SpaceShipThree goodbye. Even if SS3 had total support, which it won't, the NG people might insist on modifications during development and try to optimize it for Pentagon contracting--i.e., a commercial nonstarter.

Generally speaking, acquisition by major aerospace corporations turns revolutionary, cutting-edge firms into closely-managed specialty units for incrementally advancing subsystems. So, whoever the other 60% shareholders were, they should have waited until SS2 was fully developed and flying before introducing this kind of influence.

Posted by Brian Swiderski at 07/20/07 19:28:53

So much for creative and experimental ventures in civilian aerospace. The big boys smoking their cigars at the top of the food chain aren't going to give a damn about fiddling around with little vehicles that don't have the potential for windfall profits or government contracts. RIP the Burt Rutans of the world, welcome imperialist and unimaginative corporate overlords. Rutan, the man always ripping old school aerospace, has become a sell out.

Posted by gg at 07/20/07 20:07:08

Come now, people! It's true that the Corporate Fat Cats, the Dinosaurs, or whatever else you want to call them, have no intrinsic interest in space or technological innovation. Their only interest is in profit. But this is not necessarily a bad thing!

Traditionally, the old guard of aerospace has thrown up all kinds of roadblocks to the development of Newspace. But this is only because newspace developents threatened their existing profit models, without proposing any credible alternatives (as far as the "dinos" were concerned).

Traditionally, the "establishment" firmly believed in the inelastic nature of the space launch market. If the market was truly inelastic, then their strategy made sense: maximize costs, thereby maximizing profits. Cost reductions will only cut into your profit, without creating a corresponding rise in demand. The Old Guard was very comfortable with this profit model, and reacted badly to anything which proposed to threaten it.

What's changed is that their belief in the inelasticity of the space launch market has been irrevocably shattered, on numerous different fronts. Virgin Galactic is, obviously, well on their way towards making a pile of money -- and Space Adventures has already made several large piles of money -- thereby giving lie to the belief that there's no market for space tourism. And tourism is an OBVIOUSLY elastic market. Meanwhile, SpaceX's low prices are attracting customers that would have not previously been able to launch anything (read: they're expanding the size of the market), the military is talking about operationally responsive space, and all kinds of new, elastic markets are generally making themselves manifest.

For companies which are concerned only with profit, all of these facts suggest a new strategy: rather than making costs as high as possible, try to reach a market that is as broad as possible. Their interest in doing this is absolutely sincere, which should be a GOOD thing as far as us space nuts are concerned.

My only real worry is that their institutional culture, despite their best intentions, will have quite a bit of inertia in making the shift to this new type of profit model.

Posted by Nathan Koren at 07/21/07 00:40:28

Details are sparse so far, but Leonard David's article makes it sound like the arrangement will be mostly hands-off. (Check the link above). We will see what happens in the long run.

Also see the post and comments at Personal Spaceflight:
http://www.personalspacefli...

I'll just add that Northrop Grumman has had some interesting interactions with the entrepreneurs lately (this, Lunar Lander Challenge sponsorship, and Zero-G teacher ride sponsorship come to mind).

Posted by Ray at 07/21/07 04:59:51

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