Firms Seek New Way to Loft Satellites : Mishaps and Military Priorities Threaten Commercial Industry

When an executive of Hughes Aircraft showed up recently on a tropical isle in the Pacific, he traveled not as tourist, but as scout--searching for possible sites from which to launch the company’s satellites.

The unusual trip--and the prospect that satellite maker Hughes might also get into the launching business--illustrates how anxious the commercial satellite industry has become to find a way into space in the aftermath of the Challenger disaster and subsequent failures of both Titan and Delta rockets.

The U.S. commercial satellite industry, concentrated in California, fears serious long-term problems as a result.

Survival of Industry

The industry is fighting efforts by the Air Force to throw commercial users off the shuttle to accommodate military satellites. The National Aeronautics and Space Administration is not even committed at this point to provide launching service of any type to future commercial users, beyond those that have existing contracts, the agency said. Some aerospace executives feel the commercial satellite industry’s very survival is at stake.

“Last July, no sane person would have forecast the state of affairs in which we find ourselves today,” said Albert Wheelon, Hughes executive vice president and a member of the presidential commission that investigated the Challenger disaster. “No one would have conceived that our communications satellite industry would face extinction because the government may deny it access to the launch vehicles that only it supplies.”

Satellite makers are still doing a healthy business as they complete programs that were in place before the shuttle accident and rocket failures. But problems are likely to turn up in the next several years if the industry does not have the launching services it needs.

Next Shuttle in 1988

NASA now predicts that the next shuttle will be launched no earlier than the spring of 1988, following extensive tests and modifications to its flawed booster rockets. But there is little hope that the shuttle fleet can significantly diminish the growing backlog of U.S. space payloads, since it is still unclear if a replacement $2-billion orbiter will be built. In addition, hopes for frequent shuttle launchings, on the order of once every two weeks, have been dashed by the Challenger disaster.

A decision on a national plan to recover from the current launching crisis, which could come as early as this week, is unlikely to satisfy many members of the budding commercial space industry.

“They are all going to get kicked off the shuttle,” said John Pike, a space analyst at the Federation of American Scientists. “We are making a lot of stupid decisions right now.”

The ramifications of the Challenger loss have triggered a contentious environment in the aerospace community, in which the interests of private corporations, the Pentagon and NASA have diverged.

“I can see a fight because at the moment the military’s needs come first,” said Verne Orr, recently retired secretary of the Air Force. “I can see a number of missions are going to be 100% military. It is going to cause a tremendous amount of distress.”

One sign of that came last week. Hughes’ Wheelon called on NASA to abandon its cherished goal of launching a large manned space station in the early 1990s because it would tie up launching capacity and drain the agency’s budget for other programs.

“The present plan should not be pursued,” Wheelon said. “It is much too ambitious and everything else will go down the tubes.”

A Glamorous Program

Never before had a major aerospace company struck out against such a large government program, not to mention one as glamorous as the space station. Hughes is not expected to be a major contractor on the space station. Nevertheless, Wheelon’s remarks demonstrated the depth of the satellite industry’s concern over the impact of recent failures.

The string of embarrassing mishaps--the Challenger in January, Titan in April and Delta in May--has caused significant and immediate problems for the national security system and space science. The Air Force is short of reconnaissance satellites to monitor Soviet activities, and some experimental satellites are gathering dust on Earth.

The military has reacted by ordering a $1.5-billion crash program to develop new launching capacity, including a new rocket called the medium launch vehicle. The military is also claiming for itself as much space shuttle capacity as it wants, regardless of what the commercial industry needs.

“The military is putting first claim on all the resources,” said Jack Frohbieter, general manager of RCA’s Astro Electronics division, a major satellite manufacturer in New Jersey. “The military may not be saying it wants all the flights, but the effect may be just that.”

The future access of commercial users to launching services is being debated by the “commercial space working group,” consisting of the National Security Council, NASA, the Pentagon, the Commerce Department and the Transportation Department.

An Air Force spokesman said the Defense Department opposes future use of the shuttle by the commercial satellite industry.

‘Awaiting a Decision’

“The issue is presently under study, and we are awaiting a decision within the next few weeks,” said Henry Clark, NASA director of technology utilization. Clark noted that NASA will honor its existing contracts with commercial users but is not committed to launching anybody’s payload beyond that.

The satellite industry’s difficulties were compounded in May when France’s Ariane rocket exploded, grounding the only Western alternative to U.S. launching capability. Even when the Ariane begins flying again, it will be unable to accept many additional U.S. payloads because it is booked up well into the future.

Hughes Aircraft is so concerned about the potential loss of launching services that it is proposing to build its own launching rockets, the firm disclosed last week.

It will offer to build for the Air Force a fleet of expendable rockets, possibly based on the Saturn rocket design that carried U.S. astronauts to the moon. Hughes may wish to build such rockets for launching its own satellites. Finding a private Pacific isle launching site was the purpose of the recent trip to the region by one of its vice presidents.

‘We Are Desperate’

Wheelon said Hughes’ “only interest” in getting into the launching business is to assure itself access to some form of space launching system. “We are desperate, frankly,” he said.

Tens of millions of dollars have been invested by the industry to design commercial satellites specifically for launching by the space shuttle. The industry now will not be able to take full advantage of that investment. In addition, it will face sharply higher costs and lower-quality launching service without the shuttle, experts say.

Despite the explosion of the Challenger, the space shuttle system is still regarded as more reliable than expendable rockets. A shift toward more frequent use of rockets also would be more expensive for private industry. The federal government has subsidized launching costs far more for the shuttle than for expendable rockets.

Moreover, a major retrenchment by the U.S. government in its role of launching commercial satellites would play directly into the hands of Japanese and European competitors who want to gain a toehold in the production of satellites, the ultimate high-technology glamour industry. While American firms could turn to foreign nations for launching services, they would be sacrificing their long-term competitive advantage in the highly competitive business of producing satellites.

‘Very Competitive Game’

Much of the U.S. domination of the industry is owed to the nation’s ability to sell package deals of financing, insurance, launching service and satellites. But in recent years, financing and insurance have dried up because of satellite failures before the shuttle disaster. Now, without competitive launching services, the country would be trying to sell an inferior package.

“This is a very competitive game internationally,” said Peter Glaser, a vice president and commercial space expert at the consulting firm Arthur D. Little Inc. “We want to be very circumspect about bowing out of it.”

Despite the current crisis, the industry is not facing immediate difficulties. Production has been scantly affected at satellite production plants. Ford Aerospace & Communications Corp. in Palo Alto, Hughes Aircraft in El Segundo and RCA in Princeton, N.J., all say they are carrying forward with previous programs. Hughes and RCA say they have even received some new orders for satellites.

500 Workers Laid Off

But few in the industry are confident that they will emerge from the current launching crisis unscathed. Hughes has already laid off about 500 workers at its Space and Communications Group in El Segundo. The company has not met its growth projections and it is trying to cut back on expenses.

“There is a climate of grave apprehension,” Wheelon observed. “I would have expected a lot more of a pause than we have detected. But I think it will come. We sense that people have lost spring to their step.”

Meanwhile, the military satellite market has been affected to a lesser extent by the launching failures. Rockwell International, for example, is continuing full-speed production of its large Navstar program in Seal Beach.

TRW, a large government contractor, recently received preliminary approval for a new tracking and data relay satellite to replace the one that was destroyed aboard the Challenger.

“There will be an effect. We will see it mostly in stretch-outs,” said George Solomon, general manager of the firm’s electronics and defense sector.

Military Producers

The reason military producers are affected less is that the Air Force has decided to complete production of many satellites under current contract and store them, rather than slow down the programs at a higher cost.

But the decision to complete production of satellites now under contract ultimately will result in a downturn for military producers. With a backlog of unlaunched satellites, the military will have less need to order new ones, a top industry official says.

Some experts question whether the full scope of the shuttle’s problems have been realized even now.

“If people are saying we can have 12 to 16 flights per year, that’s far too ambitious,” said one high-ranking official in the military space program. “The effective fleet of shuttles has been reduced to two, with one spare. We can probably do four launches per year per shuttle. That’s conservative. I don’t think we should expect more than eight flights per year with a surge capacity of 10 per year.”