Transterrestrial Musings

Comments

Hi Rand,

Guess I'd like to weigh in on this one.

The reason I've seen that we lose jobs overseas is a little complex, but understandable. It's related to the the belief that public companies are always preferable to private companies, the quarterly reporting cycle, and positive feedback management structures.

A public company must must must report quarterly. Current public thinking rewards companies that have positive slopes each and every quarter on income and profitability, and devastates companies that don't. So. This has driven (almost) every significant company into a 12-week mentality, and to view employees as disposable expenses. Have a bad quarter coming up? Fire half the staff. After all, you can hire more later just like the ones you threw out.

For this behavior, managers are rewarded by:
1) not being fired themselves and
2) financially with the bonuses we've all heard about (for being so forward thinking about employees).

So management rewards it's own behavior. Investors reward management... Positive feedback.

And hey, now there's a new fad! Send your high-tech, high paying jobs overseas to (the third-world backwater of the day). This allows firing even more highly paid workers in positions like Engineering, Finance, Planning and Customer Support. And of course you can continue to send those pesky manufacturing jobs overseas as well.

The best part is that by the time anybody figures out what a disaster you have created, the bonus checks have been rolling in for a long time, and somebody else can figure out how to straighten it all out.

There is no reward for having corporate backbone or a time horizon that extends beyond 12 weeks in this system. Employee retention is no longer a positive corporate value. Retaining employees has no reward. That the people in (the third-world backwater of the day) haven’t the training, knowledge, tools or ability to perform the tasks they are given, so far has not modified corporate behavior.

The folks in the US who have lost their jobs in the last 20 years were not doing bad work. Nor were they charging too much money for their services. The fact is that these people were casualties of a kind of corporate thinking that has no loyalty. It’s a pure kind of capitalism that searches out the cheapest labor on earth and sends the job there No Matter What. It’s a brutalism that Scrooge would admire, but your mother would not.

Rand. It has just occurred to me that I have the solution for expensive boost capability! We’ll outsource it! You probably will say it makes no sense, doesn’t reduce the real cost per pound, won’t pay off in the long run, we’ll lose our technical base… Hmmm. Well. But it seems to be the answer for everything else. So why not for boosters?

Posted by Gerry at March 29, 2004 06:58 PM

Gerry, while those may be valid points in some context, they've nothing to do with this post, which is about the emphasis in the space program on "jobs" rather than on utility and cost effectiveness.

Posted by Rand Simberg at March 29, 2004 07:06 PM

Actually, to outsource for boosters would work quite nicely. $1 billion would buy 20 Soyuz shots and $2 billion would probably buy 50 Soyuz on a quantity discount basis, even if spread over 10 years to 15 years.

So, why pay to develop CEV? If Elon Musk's man-rated Falcon V can equal Soyuz on price, okay, buy that instead.

Contract for 50 Soyuz to be launched from Kouru and spend the rest of NASA's budget on a powerful nuclear exploration vessel the Soyuz can dock with while in LEO. Then off to the Moon, and Mars.

Skip the CEV generation of spacecraft and let the private sector take us to the next level after that for Earth to LEO transportation. If we cannot buy Earth to LEO off the shelf, we don't fly, right?

Posted by Bill White at March 29, 2004 07:42 PM

Rand,

I started reading blogs 3 months ago because I am very interested in alt.space. But the coolest thing is that every now and then the underlying philosophies pop up and bite me on the brain. Mealing's link to Tom Peter's Re-imaging was worth reading 100 blogs.

Posted by Jeff at March 29, 2004 08:23 PM

Thanks Rand!

If you read my 'blow by blow' commentary you'll see that I got fairly livid during this testimony. The statement was made by the presenters that the one or two budget votes that put things like ISS and Shuttle over the top came as a direct result of their organizations. I'm still incredulous at that being thought of as a good thing.

Jeff,
Re-imagine is one of my 'go to' books for the inspiration it takes to keep going forward. If you're going to read any business books this year it should be that one and Innovator's Solution by Clayton Christensen.

BTW, the location and theme for the San Francisco meeting has been released: Galileo Academy Of Science And Technology and the theme is "the impact of space exploration on education and youth".

One of my other pet peeves about this Commission is that it is approaching education purely from the standpoint of 'inspiration' or 'hero worship' (definitely _not_ the Randian kind!). Sure, inspiration helps in the elementary schools, but as you move on into highschool that stuff just doesn't cut it. In today's world you need flash to get and keep a kids attention. Give test pilots the same salaries as basketball stars and let them drive really hot sports cars and then you'd see kids lining up to be engineers. Remember when we were all in high school? No one in high school really wanted to be like a Bill Gates. Sure, they would love his money, but to actually be Bill Gates definitely isn't cool.

Posted by Michael Mealling at March 30, 2004 06:31 AM

"Skip the CEV generation of spacecraft and let the private sector take us to the next level after that for Earth to LEO transportation. If we cannot buy Earth to LEO off the shelf, we don't fly, right?"

The US government does not leave launch vehicles to "the market" for the same reason that it does not leave strategic bombers or nuclear weapons to "the market." They are essential for national security.

Posted by Dwayne A. Day at March 30, 2004 08:27 AM

Ummmm...Dwayne? The government no longer operates any launch vehicles, other Shuttle. The Air Force does in fact "leave it to the market," in the sense that they purchase commercial launchers. Now, they do help make the market, and occasionally prop it up, but the fact remains that all expendable launches in the US are now commercial.

In any event, we weren't discussing national security--we were talking about the manned space program...

Posted by Rand Simberg at March 30, 2004 08:33 AM

"The government no longer operates any launch vehicles, other Shuttle. The Air Force does in fact "leave it to the market," in the sense that they purchase commercial launchers. Now, they do help make the market, and occasionally prop it up, but the fact remains that all expendable launches in the US are now commercial."

So you're perfectly happy with Boeing and Lock-Mart? (And you know what I mean--the standard COTS/alt.space/libertarian space rant is that Boeing and Lockheed-Martin are really just an extension of the US government and most certainly _not_ what they mean when they talk about free enterprise.)

This is a "protected market" and what the other poster was discussing was essentially an open market. That's not going to exist, for the reasons I listed above. Launch vehicles--and the health of the launch vehicle market--are closely tied to US national security. And the human spaceflight stuff is really just an extension of that. Although it is not national security, the US government is never going to leave human spacecraft to an open market for the same reasons.

Posted by Dwayne A. Day at March 30, 2004 09:04 AM

No, I'm not happy with Boeing and Lockmart. I just wanted to clarify the record lest someone unfamiliar with the situation misinterpret your comments and believe that a) the government still provides their own launch services and b) that the Shuttle is part of "national security" (I thought that the whole purpose of setting up NASA was to prevent such confusion, albeit with mixed success, partly because of posts like yours...?)

And this: ...the US government is never going to leave human spacecraft to an open market for the same reasons.

Dwayne, undulge me for a moment in my fantasy. Are you really saying that if there are thousands of tourists going to and from LEO to orbital hotels, at a cost of tens of thousands of dollars each (easily doable with current technology and that level of activity), that NASA would be allowed to continue to spend over hundreds of millions of dollars to send a few astronauts into space? That they wouldn't simply book flights, as they do now when they have to fly across the country?

Posted by Rand Simberg at March 30, 2004 09:35 AM

I agree with Dwayne Day that national security concerns require a protected market for launch services. This is a good thing for US citizens as domestic launch services are essential to our well being.

My original point is that private sector launch services are a hot house flower, a protected industry, unless they can beat Russian pricing.

Elon Musk's Falcon is part of a protected class unless he can beat Dnepr on price. "God Speed!" say I yet it won't be easy for Musk to do that.

Elon Musk's man-rated Falcon V is part of a protected class unless he can beat Soyuz and put three crew in orbit for $40 million. Again, "God Speed!" say I.

IMHO, protectionism is appropriate here, lets just not pretend its really the free market at work.

Posted by Bill White at March 30, 2004 11:16 AM

While I would potentially agree that national security concerns would justify keeping up some form of launcher (the shuttle would be an ideal example in that it was built to address all potential national uses), this is far from justifying a protected launcher market. Unless you think we need a three hour manned insertion capacity anywhere on the globe without the need for forward bases, there is little need for better launch capacity from a military perspective as unmanned aerial vehicles provide similar, and in some cases superior, capabilities to satellites in the areas of both communication and sensing. Furthermore, the differences in missle tech and launcher tech seem to be large enough to justify separating the two fields from a national security perspective. While I have no problem with the US protecting its launch providers against foreign subsidies, the case for protection based on national security seems weak. If economic security is what you really mean, then the effect of government "protection" on innovation has to also be taken into account. If the government "protects" the industry as the Europeans do, by ensuring that there will be one strong domestic provider, then they are likely ensuring that innovation will be lessened, and they will be locked into second place (at best). This is also arguably not optimal for "national security".

Even worse, our use of national security for as a justification is mimicked internationally (see Europe, Russia, China, India, Japan, and Brazil as examples). The foreign subsidies are then used as a justification for domestic subsidies of Lock-mart and Boeing. If the US shifts to a pure competitiveness analysis in the aerospace sector, it would be a first step to getting antitrust authorities (particularly in Europe) to adopting a similar analysis. Cooperation with Europe on this issue would then make it much more possible to address Russian predatory pricing.

The problem with using Russian (or Chinese) prices as a measure for US launch providers is that Russian prices are the result of drastically different market conditions. While the Russians are no longer just converting left-over ICBMs, they are still working with the benefit of substantial government assistance, just as is every existing launch provider in the market. However, a protected US market does not mean a protecting Lock-mart and Boeing. The US can keep its fly-US policy while promoting real competition/innovation in the market, it just has to start looking to all the potential launch providers.

Posted by Nathan Horsley at March 30, 2004 03:52 PM

Here is an idea for a low cost off the shelf (almost) 6 crew to LEO system.

SeaLaunch, working with private manufacturers and no tax dollar assistance, completes X-38. They also design a new add on module, similiar to the Orbital Recovery satellite tug, except it contains sufficient propellant to manuever and dock with an orbital station and contains supplemental life support for the X-38.

Man rate Zenit-2 (which is smaller & cheaper than the primary SeaLaunch booster) and launch this X-38 derived craft via SeaLaunch. Depending on the cost of the add on module, 5 guests and 1 crew could travel to an LEO hotel for less than $100 million which matches Soyuz in total cost per passenger.

Space hotel? What space hotel? :-)

ISS-Zarya plus a TransHab plus a new docking module. 2 Delta IV-H can lift it, no problem. Use power generation tethers and solar panels for electricity,

Total cost? Less than $500 million.

$75 million for the spare ISS-Zarya (its surplus sitting in Moscow) $50 million for 1 TransHab (ain't no one else buying any right now) $75 million for a new docking module. $150 - $200 million for 2 Delta IV-H (based on the Air Force quantity discount - - good PR for Boeing might help, here) plus some odds and ends.

A space hotel, no?

Funding? Sell name rights to a major hotel chain. Sell advertising rights to Verizon (Can you hear me now?) Fund the rest through the time-share concept.

$50 million buys a first right of refusal for buying rides to the hotel. A Hollywood star or mogul might shell out $50 million for the exclusive right to film feature films at the hotel, etc. . .

Raise $500 million with NO debt service needed and encourage all the alt-space guys to get guests up there as cheaply as possible.

NO TAX DOLLARS NEEDED!

Anyone else with a private sector idea that doesn't require an Act of Congress or killing off NASA first?

Posted by Bill White at March 30, 2004 04:14 PM

A name rights link:

http://www.bizstrat.com/fa0503.html

$200 million for the life of the hotel to Hyatt, Marriott, Hilton or whatever does not seem unreasonable, IMHO.

Posted by Bill White at March 30, 2004 04:32 PM

My problem with many of the private sector & alt-space advocates and pundits who testify at places like the Aldridge Commission is that they all seem to sing the same song:

"Mother May I. . . "

Here is an idea for a purely private sector company to kick NASA / Boeing / Lockmart in the teeth.

Finish X-38 privately. Incorporate the ability to attach an independent manuevering unit to allow last mile guidance. Make it compatible with as many US and foreign boosters as possible and make other simple adjustments which provide quick and dirty taxi access to LEO.

When CEV funding comes before Congress, offer your vessel for a fraction of the cost of the Boeing/Lockmart designs with no federal tax dollar R&D needed.

Since X-38 was going to cost $500 million start to finish (which includes 4 copies of the final ship) and much of the engineering has already been done, then for well less than $1 billion (maybe much much less) a private sector company could fly a cheap and dirty CEV without taxpayer money and then dare Congress to buy the Boeing/Lockmart version at 10 times the price.

= = =

My take home message, just do it, or stop whining.

Posted by Bill White at March 31, 2004 08:01 AM

Bill, why do you assume that X-38 is a good design, or building one a sensible thing to do, at any price?

The private sector is going to do what make sense, not just pick up NASA's dropped balls.

Posted by Rand Simberg at March 31, 2004 08:06 AM

The private sector either needs to just do it, or stop whining.

If NASA is blocking low cost access to space, emigrate to Ukraine and build all those thousands of cheap space hotels you keep talking about, Rand.

Posted by Bill White at March 31, 2004 08:14 AM

The private sector is doing it, Bill.

And I don't know what you mean by "whining." If the government is doing things that make it more difficult to "do it," does it makes sense to fight on in silence and futility, or to bring that to their attention, in the hopes of improvement?

What you call "whining" most sensible people call lobbying. And as evidenced by things like the passage of the space transportation legislation, it seems to be working quite well.

Posted by Rand Simberg at March 31, 2004 08:21 AM

The private sector is doing what, exactly? Sub-orbital stuff?

Boosters ARE cheap. Russia sold a Proton launch for a Boeing comsat to India for $48 million. If you or I paid that price, we could put payload into orbit for very close to $1000 per pound. Zenit-2 approaches $1000 per pound.

What the private sector cannot buy off the shelf is a cheap manned capsule. Hence the X-38. Not because it good, but because its cheap.

Will Elon Musk be able to beat $1000 per pound? I doubt it. Falcon is needed for DoD purposes and to leverage Boeing and Lockmart so three cheers for Elon Musk. Yet there are NO private initiatives pending that will beat $1000 per pound to LEO, in the immediate future,

Or are there? Who? Where? Got links?

Posted by Bill White at March 31, 2004 08:38 AM

Yes, Bill, "suborbital stuff." Not to mention "orbital stuff" (e.g., Space-X).

X-38 is neither good, nor cheap, even if built by the private sector.

And no, we don't want to move to the Ukraine. We like America, and want to make it a place in which a space industry can thrive, by "whining" if necessary. You're free to move to the Ukraine if you'd like, but I think you'd rather stay here and whine that the private sector isn't doing what you want them to (emulating NASA's errors).

Posted by Rand Simberg at March 31, 2004 08:46 AM

The Bush timeline gives 4 years until the first uncrewed CEV test flight and ten years before CEV is man-rated.

If the private sector and/or alt-space can do a better, cheaper job of LEO access, NOW is the window of opportunity.

If Boeing and/or Lockmart get a 15 - 20 year stranglehold on CEV (2005- 2020) private space and alt-space can kiss good bye any hope of sharing at the fountain of US federal tax dollars.

Posted by Bill White at March 31, 2004 11:28 AM

Bill, you don't get it. Alt-space isn't interested in "the fountain of US federal tax dollars." They're interested in real markets that actually allow significant profits and revenue growth. And if they do so, Boeing and Lockmart's "fountains" will run dry, because NASA won't be able to justify the high cost of operating a CEV in the face of low-cost private providers.

Posted by Rand Simberg at March 31, 2004 11:32 AM

Good, we agree. :-)

So long as American space is single payor (tax dollars) we ain't going no where.

Where are those markets and why can't we tap into them right now?

And how will we beat the Russians in a free global market?

Posted by Bill White at March 31, 2004 11:37 AM

The market is people who will pay to go. We haven't tapped it to date because it's been difficult to raise money for it, for many reasons, but this is changing. And they'll be able to compete because the Russian launchers are not cheap, they're very expensive. They're only cheap compared to our even more expensive ones.

Posted by Rand Simberg at March 31, 2004 11:42 AM

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