Recently, according to foreign media reports, the United Launch Alliance (ULA), a well-known US rocket launch contractor, may be sold later this year, and the buyer has not yet been determined. But this is a shocking news to the industry, because the United Launch Alliance has been at its peak in the 2010s and has actually monopolized all US defense launches, but it has only been 10 years since it was sold off today. What happened in these 10 years that caused a space launch company that was praised by netizens as the US space "national team" and "black shop" to fall to the point of selling itself to survive? The birth of ULA: a merger of two strong companies Speaking of the United Launch Alliance, which has been established for 17 years, it is definitely a veteran company in the field of space launch in the United States. But some readers may say that this is not right. Space Exploration Technologies Corporation is 21 years old, and the United Launch Alliance is only 17 years old. How can it be considered a "veteran"? This has to start with its origin. In fact, the United Launch Alliance did not start from scratch, but was jointly established in 2006 by two military-industrial complexes of the United States, Lockheed Martin (hereinafter referred to as Lockheed Martin) and Boeing. The United Launch Alliance has basically inherited all the launch business resources of the two military giants, so it can be called the "dream team" of American rocket launches. If the history of the United Launch Alliance is counted from the birth of "Boeing", it can even be called a "century-old brand". The United Launch Alliance inherited the two series of launch vehicles, the Detla of "Boeing" and the Atlas of "Lockheed Martin", and these two series of launch vehicles have been fighting in the launch field for many years before the merger, and have made great achievements. The merged United Launch Alliance not only has strong technical strength, but also has the backing of the two giants. It is financially strong and has always been called the "quasi-national team" of American space launches. Its customers are mainly government departments such as the US Department of Defense, NASA and NRO (National Reconnaissance Office), as well as some commercial satellite operator customers. Although all models under the United Launch Alliance are disposable launch vehicles, they still represent the strongest strength of mainstream launch vehicles in the United States at that time. However, from the perspective of Boeing and Lockheed Martin, this is not the case. This has to start from the late 1980s and early 1990s. At that time, major accidents occurred in the US space shuttle and other mainstream launch vehicles, while Europe (including Russia) emerged as a dark horse in the world commercial launch market. In order to ensure the United States' leadership in the field of space launch at the end of the Cold War, the US Air Force launched the "Evolved Expendable Launch Vehicle" (EELV) program in 1994, intending to support two (originally one) new launch vehicles that are commercially competitive and can meet the military's launch needs. The two rockets serve as backups for each other to maintain the necessary national defense launch capabilities. Heavy Delta 4 launch mission In order to attract bidders, the U.S. military put forward an average of 20 military payload launches per year, causing Boeing and Lockheed Martin to undercut each other on price. According to the memoirs of a former senior executive of the United Launch Alliance, under the huge temptation of the military, the two companies had invested huge amounts of money in the development of these two launch vehicles. In addition, at that time, the first generation of low-orbit Internet constellations such as Iridium and Globalstar were emerging, and the two companies also hoped to use these two rockets to share in the upcoming explosive growth of the commercial aerospace market. However, in 2002, the Iridium and Globalstar projects went bankrupt one after another, and the bubble of low-orbit Internet constellations suddenly burst. As the saying goes, misfortunes never come alone. Many government projects in the expected orders have also experienced several delays, and the launch of some projects has even been delayed for more than 10 years. In short, with launch demand far below expectations, neither company has an effective plan to stop losses. After four years of threatening to withdraw from the market and the farce of "unified purchase and sale", Lockheed Martin and Boeing finally established the monopoly "United Launch Alliance" in 2006, each holding 50% of the shares, thus forming a price alliance. Even so, Lockheed Martin was only able to recover its investment in the development of Atlas 5 in recent years. And with the retirement of the Delta series of rockets, Boeing seems to never be able to recover its investment. High price, de facto monopoly, perfect performance Soon after the establishment of the United Launch Alliance, it was nicknamed "black shop" by the industry and netizens, mainly because it actually monopolized the space launch of government payloads in the United States, and the price was very high. The price of the government launch of "Atlas 5" was between 150 million and 200 million US dollars, and the price of the heavy Delta 4 single launch was as high as 380 million to 420 million US dollars. But as the saying goes, "you get what you pay for", the United Launch Alliance has excellent launch performance. Since the establishment of the company in 2006, it has never lost any payload. It is truly a hundred shots! Whether it is a military payload such as the Keyhole reconnaissance satellite, or a high-risk payload with nuclear such as NASA's "Curiosity" and "Perseverance", they are all delivered safely without exception. As the propaganda picture of the United Launch Alliance in the early years, the company claimed that its rockets could deliver payloads to all required orbits, from near-Earth space to synchronous orbits, and even to distant deep space. The United Launch Alliance must achieve its mission. At the same time, the company also mocked the Falcon 9 rocket of Space Exploration Technologies Corporation at the time for its insufficient capacity and limited orbits that could be delivered. Of course, the United Launch Alliance's launch record is not perfect. In 2007, when launching the NROL-30 ocean monitoring satellite, the second stage of the Atlas 5 rocket shut down prematurely, causing the orbit to be lower than the planned orbit when the rocket and satellite separated. However, the customer insisted that the launch mission was successful, so the United Launch Alliance also announced that the mission was successful. There was also a launch in 2016 that was a near miss. When the Atlas 5 rocket was performing the sixth Cygnus spacecraft mission, the Russian-made RD-180 engine of the core stage was shut down 5 seconds in advance due to a malfunction. The Centaur upper stage worked for an additional 67 seconds to make up for the error caused by the premature shutdown, and finally the launch was successful. The successful remedy was mainly due to the propellant redundancy of the upper stage, but this "remedy" is also limited. The subsequent investigation report showed that as long as the RD-180 was shut down 1 second earlier, the launch would have failed. Although there are flaws, the United Launch Alliance's launch performance is still outstanding compared to its competitors. Competitors are gaining strength, and launch volume and price are falling After the establishment of the United Launch Alliance, most of its orders came from the US government. The prices of these orders were "sky-high" compared to the pure commercial launch prices of Russia and Europe (Proton, Ariane 5) during the same period, but government customers had no choice because the United Launch Alliance basically had a de facto monopoly in this field. However, this is not an administrative monopoly. Although the United Launch Alliance has politicians in Congress and the military responsible for lobbying, it essentially relies on the United Launch Alliance's technical level and success rate in the launch field to achieve a monopoly. Considering national security, government and military payloads are strictly prohibited from being launched by foreign contractors, and the United Launch Alliance is almost the only company in the United States that has this capability until the emergence of Space Exploration Technologies Corporation (SpaceX). However, SpaceX was not born with the ability to threaten its position. When the United Launch Alliance was founded, SpaceX was only four years old, and Musk was still accumulating Falcon 1 rockets with a capacity of less than 1 ton on the Kwajalein Atoll in the Pacific Ocean. At that time, the United Launch Alliance had the most powerful launch vehicle in service at the time, the heavy Delta 4 with a low-Earth orbit capacity of up to 28.8 tons. The launch capabilities of the two companies are incomparable. Perhaps the United Launch Alliance may not have taken SpaceX seriously at that time. Although it is now forced to sell itself by its competitors, this is all later. In 2010, the first flight of the Falcon 9 rocket was successful, and SpaceX entered the ton-class commercial launch market for the first time. The first killer is the low price. The public offer is only 54 million US dollars, while the launch offer of the United Launch Alliance will hardly be less than 100 million US dollars. However, the initial 1.0 version of the "Falcon 9" has a low capacity and can only serve NASA's CRS series cargo spacecraft contract, which does not pose a direct threat to the United Launch Alliance business. In September 2013, SpaceX launched the 1.1 version of the "Falcon 9", with a 30% increase in capacity. Since then, the United Launch Alliance market has been gradually eroded by the "Falcon 9". In December 2015, the "Falcon 9" full thrust configuration was put into service, and the capacity was greatly increased again. At this time, the "Falcon 9" capacity can replace most of the configurations of the Delta 4 and Atlas 5 rockets, thus directly "grabbing food from the tiger's mouth" in the United Launch Alliance launch business. Of course, the strongest blow came in February 2018, when the Falcon Heavy rocket successfully completed its maiden flight, surpassing the United Launch Alliance's most powerful rocket, the Heavy Delta 4, in terms of carrying capacity. From then on, all missions of the United Launch Alliance could be replaced by SpaceX, and more importantly, SpaceX's bid was low. Before 2020, the United Launch Alliance not only received a large number of launch contracts from the military every year, but also received an average of $1 billion in "launch capability maintenance subsidies" each year. This period can be regarded as the golden age of the United Launch Alliance, which could make money without doing anything. However, since 2014, SpaceX has sued the US military for favoring the United Launch Alliance when bidding for the national security mission of the Falcon 9. After the withdrawal of the lawsuit and the settlement, the military gradually awarded SpaceX relevant contracts and launched the national security payload for the first time in 2017. In addition to the huge advantages brought by rocket recovery, the frequency of SpaceX's launches has increased year by year, and the monthly launch volume at the end of 2022 will even match that of the United Launch Alliance for the whole year. Since the orders were divided up by Space Exploration Technologies Corporation, the launch volume of the United Launch Alliance has been hovering at a low level since 2017, with only 5 launches in 2019 and 2021 respectively. The once proud heavy Delta 4 will be retired next year, and there will be only 2 launches left. In fact, the United Launch Alliance is not sitting still. The company has tried to change its corporate image, such as launching a commercial launch reservation website. It also claims that by increasing or decreasing the number of solid boosters, changing the size and model of the fairing, and changing the number of Centaur upper stage engines, the near-Earth orbit capacity of "Atlas 5" can be flexibly adjusted from 9.8 tons to 18.8 tons, avoiding the situation of a big horse pulling a small cart, saving costs and working hours, and saving customers a lot of launch costs. However, since the United Launch Alliance is a traditional design-procurement-final assembly model, the cost is far from being able to compete head-on with Space Exploration Technologies Corporation, which has a higher degree of vertical integration (self-production rate). A bloody battle for territory and the loss of monopoly In fact, the US political circles have always been concerned about the use of the Russian-made RD-180 engine by Atlas 5, fearing that Russia would take advantage of the opportunity to threaten US national security. In particular, the outbreak of the Russia-Ukraine conflict in 2022 has further accelerated the US's abandonment of the RD-180 and ordered Atlas 5 to withdraw from the US defense launch field as soon as possible. In order to meet future defense launch needs, the US Air Force renamed the EELV project "National Security Space Launch" in 2019. The project plans to select two more contractors to use "pure American" rockets for subsequent launches. Considering that defense payloads are usually valuable, the launch costs are relatively higher than pure commercial orders, and the profits are lucrative; in addition, the launch demand is stable and considerable, and compared with the "uncertain" commercial launch market, the defense launch business is indeed a "hot commodity". Even with the high bidding threshold, it still attracted three major military industry giants including the United Launch Alliance (United Launch Alliance represents Boeing and Lockheed Martin) and two leading private aviation companies to bid. The United Launch Alliance bid for the Vulcan launch vehicle under development. Vulcan generally inherits the design concept of Atlas 5. The diameter of the entire rocket is unified to 5.4 meters, and the design and process of the core first-stage tank are improved. In terms of power, it uses two BE-4 liquid oxygen-methane engines developed by another bidder, Blue Origin, to replace the Russian-made RD-180 engines, and is equipped with the GEM series solid boosters provided by Northrop Grumman. The core second stage uses the Centaur 5 upper stage equipped with two RL-10 engines. While achieving full "American manufacturing", the Vulcan has an improved capacity level compared to Atlas 5, and can cover the current heavy Delta 4 rocket, and is very competitive overall. Coupled with the United Launch Alliance's excellent launch performance, it is no surprise that it won the bid. It is difficult to determine when the "Vulcan" launch rendering will be realized SpaceX, the "newcomer" in the industry, became the "old driver" in this bidding, using the Falcon Heavy rocket for high-orbit and large-mass payloads, and the highly mature and inexpensive Falcon 9 rocket for other missions, and the two were combined to bid. As the only company among the four that uses mature and active models, coupled with its excellent performance in launching payloads for the military many times in recent years, as well as the high-frequency launch support and low prices provided by reused rockets, it is reasonable for SpaceX to win the bid. As a "territorial battle" for US military space launches in the coming years, the highly anticipated second phase bidding results of the National Security Launch (NSSL) project were announced in August 2020. After two rounds of fierce competition, the US Air Force announced that the United Launch Alliance and Space Exploration Technologies Corporation won the bid. The two companies will share 60% and 40% respectively for the high-value defense launch mission contracts, which are expected to total 30 to 34 times from 2022 to 2026. This is a sky-high contract with a total value of up to US$5 billion. Although the United Launch Alliance still accounts for the majority of this contract, it has lost face compared to the previous era of "eating alone". The United Launch Alliance's financial reports in recent years have not been good, and its net profit has declined year by year. Even though it has received a large number of network launch orders for Amazon's low-orbit Internet constellation, the Vulcan rocket has been delayed due to the BE-4 engine progress, and its first flight has been postponed. It is even more difficult to compete with the "Falcon 9" whose recycling and reuse has become a state of perfection in terms of quotation. As the saying goes, "misfortunes never come singly." The "Vulcan" that the United Launch Alliance has high hopes for has not only delayed its first stage, but also had a test accident in the second stage recently. Photos exposed by the media show that a huge mushroom cloud has risen from the test facility. Although the United Launch Alliance officially denied that it would affect the progress of the first flight of the "Vulcan", this is a relatively rare accident for the Centaur upper stage, which has been successfully in service for more than half a century. At the same time, it has also delayed the service progress of this rocket, which was originally scheduled to fly for the first time in 2021. Many intentions or reserve orders originally scheduled to be launched by the "Vulcan" have also changed due to the delay of the first flight. Centaur 5 upper stage test accident In this embarrassing situation, the sale of the United Launch Alliance is both an unexpected and reasonable option. The news of the sale of the United Launch Alliance should have been confidential, but it was revealed by the US aerospace media. According to industry analysis, there are several potential buyers: First, the two major shareholders, Boeing or Lockheed Martin, will make a full acquisition, but since the two companies want to sell the United Launch Alliance, both companies think that the United Launch Alliance is a "chicken rib" and it is a pity to throw it away. Therefore, the industry generally believes that the possibility is not great. The second alternative is "Blue Origin" or "Amazon". After all, "Blue Origin" itself has in-depth cooperation with the United Launch Alliance. At the same time, "Blue Origin" also urgently needs the overall design and manufacturing capabilities of rockets at the level of the United Launch Alliance. In addition, it is backed by Amazon's strong financial resources and is considered by the industry to be the best choice for acquisition. In addition, Northrop Grumman Innovations is also one of the alternative acquirers, but considering that Northrop Grumman has already acquired the original Orbital ATK rocket team, and its self-developed Omega rocket was eliminated during the National Security Launch Bidding period, Northrop Grumman decided to completely dismantle this research and development line. Therefore, whether Northrop Grumman is interested in acquiring a large rocket company like United Launch Alliance remains to be seen. In short, will the United Launch Alliance really be sold as a package? If so, who will get it in the end? If not, how will SpaceX and the United Launch Alliance, two fateful rivals, compete in the end? Let us wait and see. (Author: Tian Feng) This article originally appeared in Space Exploration magazine, Issue 5, 2023 Source: Space Exploration Magazine |
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