ULA VP resigns following remarks on company’s competitive position, strategy

by

PARIS — The debate over March 15 remarks by United Launch Alliance’s engineering vice president, Brett Tobey, during a university seminar — remarks that cost him his job the next day after his company disavowed them — has obscured the fact that much of what he said is beyond serious question.

The truly contestable parts, and those that likely caused his resignation — Reuters reported his departure late March 16 — are little more than the usual excesses of someone defending his company beyond what the evidence shows.

ULA confirmed Tobey’s departure in a March 17 statement attributed to ULA CEO Tory Bruno: “The views, positions and inaccurate statements Mr. Tobey presented at his recent speaking engagement were not aligned with the direction of the company, my views, nor the views I expect from ULA leaders.  Mr. Tobey’s resigned his position at ULA effective immediately.”

Here are some of the topics that Tobey raised. The ones that forced his departure are not necessarily the most important:

— Tobey’s suggestion that U.S. Sen. John McCain (D-Arizona) is an attack dog for ULA competitor SpaceX, using the Russian RD-180 engine as a pretext, was not just impolitic. It brushed aside the legitimate issue of how much the U.S. Defense Department – which for years declined to develop a U.S. alternative to the Russian RD-180, which powers ULA’s Atlas 5 vehicle – should continue to rely on a Russia whose geopolitical strategy has forced a rethink of U.S. and Western relations with Moscow.

The fact that SpaceX has made use of the argument to advance its own corporate interests does not invalidate the seriousness of the issue.

— Tobey implied that the absence of public debate over Orbital ATK’s use of the RD-181 engine, made by the same Russian company that builds the RD-180, was no accident. But the fact is that, for now, the discussion in Washington has focused uniquely on Russian engines for U.S. military programs, not for commercial or civil government missions with NASA, where Orbital ATK’s RD-181-equipped Antares rocket operates at the moment.

— Tobey’s remarks about the competition between Blue Origin and Aerojet Rocketdyne to replace the RD-180– his rich girl/poor girl analogy was intended to be comical and drew laughs from the University of Colorado-Boulder engineering audience – were little more than stating the obvious.

ULA Chief Executive Tory Bruno said as much in June testimony before the U.S. Congress: Blue Origin’s BE-4 has the inside track, and Aerojet Rocketdyne’s AR1 is the challenger. BE-4 development is more than a year ahead of the AR1.

What is more, Tobey said the BE-4 is likely to be 40 percent less costly than the AR1 and is backed by a billionaire, Amazon Chief Executive Jeff Bezos, who can make split-second investment decisions on behalf of BE-4, and has already demonstrated his determination to see it through.

AR1, in contrast, depends mainly on U.S. government backing, meaning Aerojet Rocketdyne has many phone numbers to dial to win support, whereas Blue Origin needs only Bezos’s mobile.

— Tobey’s assessment of ULA’s corporate ownership — a 50/50 joint venture of Lockheed Martin and Boeing — as “dysfunctional parents” was in response to a university questioner’s incredulity at the fact that ULA must get quarterly approval for continued work on its new Vulcan rocket.

“The discussion was, ‘Why not just launch the rest of our Atlases and Deltas in the in the inventory in most profitable way and then, just like we did with USA [United Space Alliance, a Boeing-Lockheed joint venture to manage space shuttle operations and other NASA work], go out of business?” Tobey said, referring to the Lockheed-Boeing debate on ULA’s future.

Call it what you will, most industry observers have long agreed that ULA’s corporate structure will have to change if the company is to evolve into the lean, competitive force its managers have stated as their goal. Tobey said Aerojet Rocketdyne’s $2 billion bid to buy ULA was rejected because ULA’s owners value the business at $4 billion.

— ULA’s decision not to enter the competition with Hawthorne, California-based SpaceX for a U.S. Air Force GPS-3 satellite launch, he said, was a simple observation that SpaceX can offer prices that ULA is unable to match.

Naturally enough, the company did not say this at the time, preferring instead to cite obscure government contract rules for which ULA’s accounting office was unprepared in explaining its refusal to bid.

— Tobey’s larger point was that the U.S. government is now obliged to use the lowest-cost measure as its prime criterion for awarding launch-service contracts. The days of reliability at all cost – and he conceded the cost is high – are over.

And here he raised an issue that the U.S. Air Force, the national security establishment and NASA will all grapple with: Can they live with Silicon Valley’s “iterate, fail, then iterate again” operating manual?

“This is where it starts to get emotional at work,” Tobey said, recalling that ULA will be launching Boeing’s CST-100 Starliner astronaut capsule under contract to NASA, just as SpaceX’s Falcon 9 will be launching SpaceX’s crew-version Dragon capsule.

“When you talk about a failure, and then getting to a definitive root cause and making substantial changes to fix it – all that costs lots and lots of money,” Tobey said. “And if we start chasing the price point down to where it’s now affordable, how much will you lose and what risks are you taking?

“You really don’t know you’ve gone too far until you end up losing a rocket. If you lose a rocket with a low-cost commercial satellite, it’s one thing. If you lose it on a national security satellite, it’s another thing.

“If you lose it with humans, you become part of the tragedy in the history of American spaceflight. That’s completely different.”