McDonnell Douglas Rocket Nears Liftoff

If all goes according to schedule, a McDonnell Douglas Corp. Delta rocket will lift off from Cape Canaveral early Sunday evening, propelling a British broadcasting satellite into orbit and the United States into the rough-and-tumble market for commercial launches into space.

The field is now dominated by the European rocket consortium Arianespace. But U.S. companies have been preparing for a run from behind since 1986, when President Reagan created new demand for commercial launches by effectively banning nongovernment cargo from future space shuttle flights after the Challenger explosion.

McDonnell Douglas’ scheduled launch will be the first lift-off under the new policy. The company will be in full command of the pad and will shoulder any financial liability in the event of an accident.

The Delta is designed and partially built by McDonnell Douglas’ Space Systems Co. in Huntington Beach.

McDonnell Douglas has signed up nine commercial customers, including the British satellite company, with each launch contract worth about $50 million.

Two other U.S. companies have been working hard to enter the market. Martin Marietta Corp. plans the first commercial launch of its Titan rocket later this year, while General Dynamics Corp. has plans to send up its first commercial Atlas next June.

Daunting Competition

The companies face daunting competition from abroad, despite the U.S.’s traditional leadership in space exploration. And they are entering the market at a time when the number of launches is lower than was predicted when they began gearing up. “There’s more supply than demand,” said Judith Comeau, a vice president of Goldman, Sachs & Co., New York, who watches the aerospace industry. “It’s very simple.”

Arianespace, launching from a complex in the jungle of French Guyana, has built an impressive record: 15 successful launches in 15 tries since September, 1987, when it ended a yearlong grounding that was called after a launch failure. It has had the commercial field all to itself for the last two years and holds an estimated two-thirds or more of the market for the next year or so.

In addition, China’s Long March booster and the Soviet Union’s Proton are being offered to the world for rides into space at prices sufficiently lower than those to be charged by U.S. companies. That has left the American firms complaining that these governments are unfairly subsidizing the aerospace companies in their countries. Further down the road, Japan is expected to introduce a large booster, the H-2, for its own satellite payloads and possible entry into the world market in the 1990s, which would create further competition for the three American players.

“I don’t think there’s enough business on a commercial basis (alone) to enable all three companies to remain viable in the face of increasing foreign competition,” said Brad Meslin, managing director of CSP Associates Inc., a Cambridge, Mass., firm that consults on the aerospace business. But Meslin suggested that the three would probably be able to stay in the market due to revenues from separate noncommercial rocket business with the U.S. military.

Leader of the Pack

General Dynamics, with firm contracts for 17 commercial launches, is viewed as leading the pack among the American three. “We feel pretty confident that the decision we made to go into the commercial launch services business is really proving to be a good business decision,” said Jack Isabel, a General Dynamics spokesman.

Contributing to this story was David Olmos, Times staff writer.