Hitching to a Star : Space Station Contracts Could Rocket Small Firms to Higher Revenues and Boost Employment

AEC-Able Engineering Co., a small business in Goleta, seems to have hitched its fortunes to the right stars.

The 20-employee company designed two huge joints as part of McDonnell Douglas Astronautics’ bid to build the framework for the manned U.S. space station. AEC also came up with deployment mechanisms and more rotating joints for the solar cells and thermal radiator in a space station power plant proposal by Rockwell International’s Rocketdyne division.

Both McDonnell Douglas and Rocketdyne have been selected for NASA contracts, and AEC is waiting for subcontracts worth up to $35 million, which would more than triple employment, to 70 workers, President Max D. Benton said.

For giant Southern California aerospace corporations accustomed to more valuable military contracts, participation in the space station will mean a toehold for future space contracts and a dribble of extra revenue spread over the next decade. But for AEC and others of the region’s many small space businesses, the space station could mean a bonanza--if and when it is eventually built.

Companies with fewer than 500 employees--NASA’s definition of a small business--have manufactured an extraordinary range of widgets for past U.S. space programs. Many now hope to cash in on the space station project. Work available to small space businesses may include making everything from insulation to graphite tools to extendable booms, which will deploy the station’s eight, 100-foot-long and 30-foot-wide panels of solar cells.

Entrepreneurial Engineers

“When you look at how things are actually made, it’s a cottage industry. . . . There are very few production lines,” said Joe Carroll, a principal engineer with Energy Science Laboratories. The 16-employee San Diego company has won more than $500,000 worth of NASA contracts to develop a system for sending packages of space station experiment results back to earth.

Small, highly entrepreneurial companies are found throughout Southern California’s space industry. Independence-minded engineers with experience at the region’s major aerospace corporations typically launch these high-risk entrepreneurial ventures, starting with a handful of employees in a small office doing design work.

“With the standard notion of engineers that they can run things better than the bosses can, I broke off and opened my own business,” recalled Benton, who spent several years at Hughes Aircraft and eight more years at a small research firm in Northern California before starting AEC in 1975.

Sieg Borck, a German immigrant mechanical engineer who spoke no English when he arrived in the United States in 1957, started Hi-Temp Insulation in 1964 with two employees. Now the company has 200 employees, owns two plants in Camarillo totaling 64,000 square feet and has made more than $15 million worth of heat tiles, insulation and hydraulic cooling systems for the space shuttle.

Small Employment Gains

Hi-Temp, which also makes insulation for commercial airliners, plans to bid for contracts to insulate the space station. As the station orbits 300 miles above the Earth, the temperature will range from 380 degrees above to 180 degrees below zero Fahrenheit as the station passes in and out of the earth’s shadow. Winning these contracts would mean hiring an additional 15 to 20 employees, Borck said. But because NASA and its contractors have only just agreed on the space station’s basic design, it will be late this year at the earliest before such contracts come up for bids, he added.

Larger Southern California subcontractors also anticipate new orders but less spectacular employment gains from the space station. “We have had some preliminary requests for quotes. . . . We do foresee significant demand,” said Shelley Baumsten, a spokeswoman for El Segundo-based International Rectifier. The company employs 2,300 and makes radiation-resistant semiconductors that can conduct and control power for motors, lights and electrical circuits, handling up to 50,000 volts--a far greater load than conventional, 10-volt semiconductors. But meeting the additional demand will mean running the company’s highly automated factory a little faster, not hiring new workers, Baumsten said.

Enthusiasm among Southern California businesses for space station work is tempered in any case by worries that cuts in the federal budget deficit may slow the program. The Senate has already voted once to slash by 27% the Reagan Administration’s request for $767 million in space station funding for the 1988 fiscal year, up from Congress’ allocation of $320 million in 1987.

NASA nonetheless announced on Dec. 1 that it will soon sign 10-year space station prime contracts totaling more than $5 billion with four teams of giant aerospace corporations. Boeing Aerospace Co., McDonnell Douglas Astronautics Co., General Electric’s Astro-Space division and Rocketdyne each will lead a team. But it is unclear whether Congress will give NASA the money needed to carry out those contracts on schedule.

“Until NASA knows what its budget is going to be, we’re not even in a position to get any (subcontractors) on board,” said Roger Beall, a spokesman for Lockheed Missiles & Space in Sunnyvale. Lockheed will do about $1 billion worth of work on the station as a prime software contractor and a member of three of the four winning space station teams.

Some scientists have charged that the construction of a manned space station--which the military desires as part of the Strategic Defense Initiative--will squeeze out funding for smaller, less spectacular programs. Other critics have argued that NASA’s projected $14.6-billion program cost is an underestimate, partly because it does not include the expense of carrying the parts into space for assembly.

Building a space station will also test NASA’s managerial skills, widely criticized after the Challenger disaster. “This is a real challenge to NASA to tie itself together and heal the competitive tensions among the (NASA) centers. . . . The question is, will they be able to put it all together?” said Andrew F. Lawler, associate editor of Space Station News, a biweekly newsletter based in Washington.

Even if the station is fully funded, the production of hardware to shoot into space lies at least two years in the future, with final assembly of the space station unlikely until the mid-1990s. NASA and the four major teams of aerospace companies will not sign final contracts giving all work requirements until sometime between March and June, NASA spokesman Mark Hess said. Only then will most of the subcontracts begin to become available.

But space subcontractors are already visiting engineers and officials at the main contractors anyway, pressing the flesh and promoting their wares, said Ray T. Brighton, sales engineer of 110-employee Aircraft Engineering Corp. in Paramount. “All us guys our size are (scurrying) around. . . . Even though they’re two years away from final design, you need to be getting around and talking to people.”

Confidence in Shuttle

The aerospace tooling and parts manufacturer plans to bid on $4 million to $6 million worth of contracts to make graphite composite tool molds and steel parts for assembling the framework’s graphite tubing. Winning the contracts would mean hiring about 70 additional welders and tooling engineers.

Contractors and subcontractors alike are counting on the space shuttle to come back into service this year to carry the space station into orbit and assemble it there. Confidence in the shuttle’s future reliability is an article of faith among industry professionals, notwithstanding repeated postponements of the shuttle’s return to operation.

Tininess, optimism, entrepreneurship and confidence in the shuttle’s return are exemplified by American Space Technology. Launched a year ago, the fledgling company occupies a 1,000-square-feet space in Santa Monica and has just won a NASA contract to develop a shuttle experiment for studying the behavior of flames, smoke and fire extinguishing agents in space. The experiment could help guide the development of a space station fire control system, said Arthur T. Perry, president of the three-employee firm. “I recognize that in some people’s eyes this might not be the best time (for space projects). . . (but) the risk-takers now are the ones who are going to get the fruits of it in the coming years.”