PWR Reducing Manufacturing Space by More than Half
COLORADO, SPRINGS, Colo. — With business volume down sharply following the retirement of NASA’s space shuttle fleet, liquid propulsion provider Pratt & Whitney Rocketdyne (PWR) is reducing its production footprint by more than half, mostly in California, company officials said.
Jim Maser, PWR’s president, said that by the end 2013, the company will have shrunk its factory floor space from 189,000 square meters to less than 90,000 square meters. PWR has sprawling manufacturing and test facilities in Canoga Park, Calif., where it is headquartered, but Maser said operations in West Palm Beach, Fla., also are being consolidated.
Briefing reporters April 16 here at the National Space Symposium, Maser said the propulsion business has high fixed costs that can be offset by production volume. With volume down, PWR is working to reduce overhead and streamline operations, he said, adding that much of the company’s infrastructure was set up for NASA’s human spaceflight program, where work was done under cost-plus contracts in which the government assumes the risk of cost growth.
Maser said most of the work force reductions associated with the infrastructure overhaul have already been made. PWR, which is up for sale by parent company United Technologies Corp. of Hartford, Conn., now has about 2,400 employees, down about 1,000 from three years ago, he said.
Maser said PWR is looking for efficiencies wherever it can find them. Support functions are being consolidated, for example, and common tooling and facilities are being used across engine production programs to the extent possible, he said.
PWR is the largest U.S. maker of liquid-fueled rocket engines, and its biggest program was the space shuttle, which NASA retired last summer. The company built and refurbished the Space Shuttle Main Engine, three of which were used on each orbiter mission.
The shuttle’s retirement has caused cost spikes on PWR’s other products, most notably the engines it supplies for the Atlas 5 and4 rockets built and operated by ( ) of Denver. These expendable rockets are used to launch the vast majority of U.S. government satellites, and the rising cost of this activity has brought ULA, a Boeing-Lockheed Martin joint venture, under intense congressional scrutiny in the past couple of years.
The U.S. Air Force’s strategy for reducing its launch costs is a so-called block buy of Atlas 5 and Delta 4 rockets, the idea being to stabilize production and thereby reduce uncertainty in the supplier base while reaping the efficiencies associated with bulk production. The block buy options under consideration range from six to 10 booster cores annually over a period of three to five years.
PWR manufactures the RL10 upper-stage engine, different variants of which fly atop both the Atlas 5 and Delta 4, as well as the latter rocket’s RS-68 main engine. The company also is a partner in the RD-Amross joint venture with Russia’s Energomash propulsion manufacturer that supplies the Atlas 5’s RD-180 main engine.
The Air Force favors using firm, fixed-price contracts throughout the ULA supplier chain for the block buy, but PWR executives say this is not necessarily the best way to save money. Such arrangements put the contractor on the hook for any program cost growth, and Maser said the company would have to protect itself by charging higher prices.
“We’re happy to do fixed-priced contracts but it’s going to cost the customer more,” Maser said. There are factors in the cost of producing rocket engines that are unpredictable and beyond the company’s control, he said.
For example, the company tests RS-68 engines at NASA’s Stennis Space Center in Mississippi and must lease that infrastructure and buy propellant from NASA. “We have no idea what they’re going to be charging us in 2016,” Maser said.
Steven A. Bouley, PWR’s vice president for launch vehicles and hypersonics, said the company’s Stennis-related RS-68 costs have grown by 12 percent to 15 percent in a single year.
Company officials said a more sensible approach is a hybrid featuring fixed-price contracts for products whose manufacturing costs and processes are well understood and predictable, and cost-plus arrangements for those with riskier cost profiles.
PWR has built its latest engine production proposals to ULA under the assumption that the Air Force will order eight rockets over a five-year period starting in 2013, with launches beginning in 2015. One proposal is for 31 RL10 upper-stage engines of various configurations; the other is for 21 RS-68 main engines, Bouley said.
ULA has a sizable number of RL10 engines in inventory, PWR officials said.
The Defense Department projects it will need 53 launch missions from 2015 through 2019, PWR officials said.