Kistler Aerospace, a reusable rocket venture many had written off after the company’s main backer withdrew most of his financial support late last year, has re-emerged with a new owner just in time to bid the K-1 as the solution to NASA’s international space station re-supply needs.
Kistler now belongs to George French, the chief executive officer and majority owner of Rocketplane Limited Inc, an Oklahoma City-based company building a reusable space plane for the suborbital tourism market. French bought controlling ownership of Kistler from corporate bailout specialist Bay Harbour Management LLC of New York for an undisclosed sum. French said in a Feb. 25 interview he intends to use the K-1 reusable rocket to go after NASA business delivering supplies to the space station.
NASA’s deadline for submitting proposals for the $500 million in subsidies the U.S. space agency is offering under its Commercial Orbital Transportation Services (COTS) demonstration program arrived March 3. NASA is hoping the money can help one or more firms demonstrate by 2010 the capability to deliver cargo and perhaps even crew to the space station. In May, NASA intends to select one or more firms for the subsidized demonstration effort, giving them a shot at potentially lucrative service contracts in the post-space shuttle era.
It is a market Kistler Aerospace has been chasing since the company gave NASA an unsolicited proposal in 1999 for using the K-1 reusable rocket as an alternative to the space shuttle for ferrying comparatively small amounts of cargo to and from the station. In 2001, Kistler won a pay-on-delivery contract for K-1 flight data, but then struggled to raise the $500 million needed to complete the vehicle. Two years later, awash in debt, the company filed for Chapter 11 bankruptcy protection.
Kistler’s continued its dogged pursuit of NASA business despite being in bankruptcy proceedings. The company’s persistence appeared to have paid off in 2004 when NASA — in desperate need of shuttle alternatives since the loss of Columbia the year before — agreed to revive the 2001 contract and pay Kistler $227 million to finish and fly the K-1. Rival rocket start-up Space Exploration Technologies, however, protested the sole source award to the U.S. Government Accountability Office and won.
French, who was an early investor in Kistler when it was started more than a decade ago, described it as an established company with mature engineering designs and a substantial amount of hardware that has already been manufactured at several sites around the United States including parts built by Northrop Grumman and Lockheed Martin. He said Kistler, which had raised more than $600 million in financing before filing for Chapter 11 in 2003, has solid technology but that the company was unable to get to the flight stage because of financing problems that arose after the late 1990s financial crisis in Asia that affected some of its investors and the impact of the Sept 11, 2001, terrorist attacks on financial markets.
“Regrettably, they never made it, but they were close,” French said.
Kistler emerged from bankruptcy proceedings in 2005 determined to go after the COTS opportunity that was starting to take shape. At the time, Kistler officials said the K-1 was about 75 percent complete. By September, however, Bay Harbour had tired of waiting for NASA to release its solicitation and so dramatically scaled back its funding of Kistler’s operations. All but five of the company’s 23 remaining employees were laid off and the firm’s Kirkland, Wash.-based office was closed.
Rebuilding Kistler
Randy Brinkley and Will Trafton, veteran aerospace executives who held senior management positions at NASA before entering the private sector, remained at Kistler’s helm through the layoffs and now are working with their Rocketplane counterparts to capture NASA station re-supply business.
Brinkley, the former president of Boeing Satellite Systems, was hired in August 2004 to serve as Kistler’s chief executive officer. Trafton was hired as Kistler’s chief operating officer the same month, resigning his position as president of Boeing Launch Services to take the job. French said in a Feb. 25 interview that Brinkley and Trafton would remain with the company but that Kistler’s management structure would eventually be overhauled.
Brinkley said in a Feb. 27 telephone interview from Rocketplane’s Oklahoma City offices that he and Trafton continued to pursue the COTS opportunity in parallel to looking for new financial backers. After NASA finally released the draft COTS solicitation in December, Brinkley said, Kistler hired back several members of the company’s technical team to work on the proposal effort. Of the eight key technical managers Kistler had on its payroll prior to last October’s layoffs, six still are on board, Brinkley said, including Joe Cuzzapoli, the K-1 program manager.
Brinkley and Rocketplane Vice President David Urie acknowledged there is some work to be done to rebuild the Kistler technical team, but both expressed confidence in the transition ahead.
“We’re bringing on board key individuals from the Kistler organization who are obviously interested in completing the task they began and have a lot invested in,” Urie said. “We have continuity of technical representation from the subcontractors as well. It’s a challenge to reconstitute an effort of this size and scope and complexity, but I think we have the right people working with us on this both inside and outside Kistler Aerospace.”
Urie said Feb. 27 that Rocketplane and Kistler, which for now continues as a separate legal entity owned by French LLC, had been working as a team on their COTS proposal for about six weeks but that their individual efforts go back much further.
While the COTS competition was looming large on Urie’s and Brinkley’s radar screens last week, Urie suggested that the combination of the two companies is a good fit for the long haul.
“There’s almost perfect complementarity between Rocketplane and Kistler,” Urie said. “Both are systems integrators. We are both working on completely reusable spaceflight vehicles. We are looking at two different markets. There is virtually no competition between the two. It’s a good as match as you can find in any industry and certainly in the space launch industry.”
