COLORADO SPRINGS, Colo. — Major space hardware manufacturers and the U.S. Air Force on April 12 admitted they are uncertain of whether the U.S. space industrial base is threatened with a loss of key know-how at the second- and third-tier level.
Some spoke of oversupply, others of actual or impending shortages of key components.
All agreed that the industry is being forced into what may be an unprecedented self-examination as the largest-ever cycle of military space spending increases comes to an end.
Brett Lambert, U.S. deputy assistant secretary of defense for industrial policy, said his office is conducting a detailed analysis of lower-level component manufacturers to see which ones might be in trouble — before their situation becomes critical.
“We want to get out of the lifeguard role, where we intervene only when somebody is drowning,” Lambert said here during the National Space Symposium. He said his office is doing a sector-by-sector, tier-by-tier review of the space industrial sector to identify trouble spots.
Lambert said the Defense Department is midway through a six-month analysis of the U.S. liquid propulsion industry, following a similar analysis recently completed of the solid propulsion industry.
He said the U.S. Defense Department recognizes that it has been the technology driver for the industry as well as its biggest customer and that both roles now may be reduced in an era where major new space programs are unlikely.
“The Department of Defense is not used to being the tail, it’s used to being the dog,” Lambert said. “And somebody shot our dog.”
Sensing the way the wind is blowing, some companies are pouring more resources into what may be a more stable commercial market for satellites. That is the case of Boeing Network and Space Systems.
Roger A. Krone, president of Boeing’s Network and Space Systems division, said Boeing has concluded that there is a broad overcapacity in the industry. “We need to get more lean. There will be reductions in the work force,” Krone said.
Marion C. Blakey, president of the Aerospace Industries Association (AIA), a Washington-based trade group, said reform of U.S. policy on satellite exports could ease the problem by providing a new market for U.S. suppliers. She said the AIA has concluded there is a serious problem in several space component sectors, but she conceded the association remains unclear of the status of the whole industry.
“It is difficult to get a good macro picture,” Blakey said, adding that her concern is that “we’re going to find out about it later than any of us will be comfortable with.”
Northrop Grumman Chief Executive Wes Bush, in a keynote address to the conference, urged industry not to take refuge in the usual response to the coming downturn in defense business.
To some extent, Bush said, the industry has only itself to blame for the fact that many in the U.S. Congress now view space missions as always exceeding their cost and schedule, and increasingly replaceable by other technologies, such as unmanned aerial vehicles.
Bush said he senses “customer exhaustion with cost and performance and schedule issues that seem to be endemic. The track record in the past decade on cost and schedule has not been acceptable.”
Bush said that for some decision-makers in government, buying a complex satellite system may be compared to purchasing a $20,000 car: The customer makes the down payment and arrives to take delivery, only to be told that the car will now cost $10,000 more than initially agreed, and delivery will be a year late.
Bush said the usual industry response to crisis — calls for industrial-base protection, for a back-to-basics approach to program execution, and a heightened sense of risk management — “are no longer enough.”
“When launch costs are two or three times the cost of the systems themselves, it’s pretty clear we need some extraordinary innovation in that regard,” Bush said.
