The size and diversity of Boeing’s space business enables it to weather the industry’s often localized ups and downs. Losses in competitions to build new generations of navigation and weather satellites, for example, were offset in part by a contract to build up to four telecommunications satellites for Intelsat based on Boeing’s new 702 Mid Power platform design.
Pentagon space spending appears headed for a period of decline after a decade of growth; big ticket programs like the Transformational Satellite (T-Sat) program have been canceled. But Boeing has what could be a long-term anchor manufacturing program in the U.S. Air Force’s Wideband Global Satcom (WGS) system, and holds the NASA prime contract on the international space station, which the U.S. government intends to continue supporting through at least 2020. Boeing also has considerable classified work and is building a new generation of radar satellites for the U.S. National Reconnaissance Office (NRO), a fact that NRO officials have acknowledged
Nevertheless, Roger Krone, who is responsible for Boeing’s entire portfolio of space and missile defense programs, has a number of concerns these days, the future of U.S. space exploration after the space shuttle retires prominently among them. U.S. President Barack Obama has moved to cancel the current shuttle replacement program, along with NASA’s planned return to the Moon.
Krone spoke recently with Space News Editor Warren Ferster.
What’s your reaction to the new direction for NASA’s human spaceflight program?
We’re certainly excited by the increase in the NASA top line by about a billion dollars. We think that represents a commitment by the administration to the mission of NASA human spaceflight and exploration in general. Second, we see the renewed commitment to the large investment that the country’s made in the space station — the extension on orbit to 2020 and hopefully beyond — and a call for increased utilization of what is not only a national asset but an international asset. Our concern, which I think is industry’s in general, is that we find ways to bridge the work force between the programs that we have today — Ares, Orion, Altair — and what will follow. We all want a robust NASA, a robust human spaceflight program, a robust exploration program. So we just have to work together to find a way that minimizes this period of uncertainty and allows us to retain the work force.
Is developing a shuttle-derived heavy-lift rocket the best way to preserve jobs?
Although I have a very warm spot in my heart for shuttle, we clearly see the end of the shuttle program. Even if it gets extended, it is not the long-term answer. We believe that in the long term there needs to be a heavy lifter, an Ares 5-class vehicle. There are multiple ways you can get to a heavy lifter. Within Boeing we’ve looked at various options, as I’m sure all the other companies have. I know there are people talking about how far could you take a triple-stick Delta 4. What we’ve concluded is that no, in the long run we need a heavy lifter.
Will Boeing bid to provide commercial astronaut taxi services to and from the space station?
Boeing is certainly prepared to bid. In discussions we’ve had with NASA, the ingredients of a commercial program are multiple users, that the contractor has money at risk, and minimal nonrecurring costs paid by the agency. So it’s more of a commercial structure. Remember, we’re Boeing; every commercial aircraft we’ve developed, we’ve developed under that business structure. We’re very comfortable with spending our own money to develop product. What we’ll be looking toward the agency is to understand how much of a potential market the agency is going to represent.
Do you see a significant non-NASA market there?
In the Boeing internal plans, we don’t have space tourism as a large part our addressable market. A lot of people have forgotten that Delta 4 — and frankly Delta 3 before it — was a commercial development. Boeing spent its own money to do the upper stage on Delta 3 and the lower stage on Delta 4. We built a large facility in Decatur [Ala.] that unfortunately 10 years later proved to be bigger than the market, but we felt confident about moving forward because we could look to the government to represent a core number of launches for which we could then build an incremental business case. I think that’s how NASA views the next development.
Has Boeing designed a commercial crew capsule?
We have some concepts that we think would fit well with commercial crew services to low Earth orbit. That is not to say that we have a drawing package ready to release. We would still have to do some work, but we want to be prepared to play in whatever market develops. Clearly we would spend some of our own money to ensure those designs.
What’s the fastest-growing part of Boeing’s space business?
The fastest-growing is actually the re-entering into the commercial marketplace. Our four-satellite deal with Intelsat represents emergence into a new class of satellite, a new market. So just from the numbers, that is the largest area of growth for us.
Pentagon space budgets are flat to declining, while the big satellite operators are winding down their fleet recapitalization cycles. Does this concern you?
Every year, we could view the market as the wrong time or the right time. Depending on what’s happening in financing or in commercial telecom, you could look at the horizon and say, “Look at geostationary-orbit mobile,” and frankly there are a lot of geostationary-orbit slots that if they’d open up there’s a lot you could do, especially with some of the satellite designs we’ve got that provide more power. As handsets get smaller sometimes the satellite wants to get bigger.
When we acquired Hughes back in 2000, they were probably 75 percent commercial. And since that time the mix changed significantly where we delivered out most of the commercial backlog and were able to replace that backlog with government work. We look at the commercial portfolio as being in that 20 to 25 percent of our business mix, not 50 or 75 percent. So we are not looking for a huge home run — 10 satellites a year in the commercial marketplace.
Are there going to be new consolidation pressures ahead for commercial satellite manufacturers?
In the current governance structure over commercial satellites in the United States, there may or may not be pressure, but as long as commercial satellites stay on the U.S. Munitions List, I’m not sure we’ll see a lot happen. It would be interesting to see how the market might change if commercial satellites moved to the Commerce Department’s Control List. We’d like to see commercial satellites or at least major components thereof moved off the U.S. Munitions List to the Commerce Control List.
Do you think that’s realistic given recent history?
I’m hearing more dialogue in Congress and from the administration. There was a sentence in the president’s State of the Union address that specifically spoke to export reform. Boeing’s chairman and chief executive is the head of the president’s export council — Boeing is the largest exporter in the United States — and I think that gives all of us in the satellite industry an opportunity to make the case for why commodity components like commercial satellites ought to be put on the Commerce List. I’m more optimistic than I’ve been in a while, but I still believe we have a ways to go.
How strong is your government satellite business?
From a production standpoint our government business is the best that it’s been since 2001. The concern that we have, and I think it’s industry wide, is that in the wake of the T-Sat cancellation, our factories tend to be full but the front-end development organizations are not as busy as we’d like to see.
What can you do about that?
Well for us it was to make the gamble on the 702 Mid Power. That was an immediate reaction and the timing tended to work out well. The solution — and as I talk to the Air Force customer and other customers — is we need a renewed emphasis on science and technology to keep those precious design and development resources focused on space payloads.
Will Boeing compete to build the NRO’s next radar satellite system?
Boeing would be pleased to compete for almost any payload that the NRO put forward.
Do you hold out hope that the NRO will forgo that competition and continue buying platforms from Boeing?
When budgets are flat there’s pressure to evolve current systems, and we think that favors incumbents.
How far can Boeing take the WGS platform in terms of evolutionary upgrades?
The WGS basic architecture is flexible enough that a lot of the T-Sat capabilities like router in space and even some of the cross linking would be fairly straightforward to add to satellites nine and beyond. To move WGS into the Advanced Extremely High Frequency market is probably not realistic. We’d like to see WGS like a franchise program. The need for bandwidth is always going to be increasing; I think you can fill up a constellation of easily seven or eight and then at that point you’re talking about refreshing the constellation.