The cynic in me assumes the 40% savings will just get shoveled into the F-35 furnace.
Now that you mention it, isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services?
SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
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Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#22This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive Spac…
Problem with monopolies is that they lag behind on innovation.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#23Earlier quoted context omitted.
> I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. That would be blatantly anticompetitive dumping, by the textbook definition.
It is also illegal to bid contracts below cost when the customer is the DoD.
Illegal is a very lose term...so many projects "overrun" their contract price...I don't believe that these companies that have decades of military and government contract experience cannot budget for overhead expenses and project delays. They just end up charging more later on, rather than be upfront with actual costs.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#24Yet, SpaceX cries about getting undercut by ISRO.
A group which SpaceX is a member of raised concerns that launches by ISRO are allegedly subsidised by the Indian government and therefore the pricing is anticompetitive but have also acknowledged that the market served by the PSLV is badly serviced by American companies. They're not the only ones to raise the same concern but no-one's seriously crying about being undercut.
Even as it is, the Falcon 9 and PSLV price per kg to LEO are pretty much the same with newer Falcon 9 winning out slightly.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#25Earlier quoted context omitted.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive Spac…
> I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. That would be blatantly anticompetitive dumping, by the textbook definition.
They were already colluding to form a monopoly, I don't think antitrust prosecutions are going to be forthcoming.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#26Earlier quoted context omitted.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive Spac…
Problem with monopolies is that they lag behind on innovation.
Have you met Google? (Said in my best NPH voice)
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#27This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive Spac…
It's more likely that the response will be too slow than fast and overwhelming. ULA likely took advantage of their monopoly to underinvest in lower-cost technologies, and the lead time to correct that could be very long.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#28The cynic in me assumes the 40% savings will just get shoveled into the F-35 furnace.
F-35 funding is through congress and involves congressional oversight and is a multi-branch project. It's not just the Airforce that has the F-35.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#29This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive Spac…
>You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices.
I do. In the '90s I was working for a company that was used to bidding cost plus contracts when DoD contracts pretty much dried up as a result of the collapse of the Soviet Union. Management tried very hard to realign the company to compete in the commercial sector and failed miserably.
Changing the focus of a large organization like that from performance to cost is extremely difficult. Your people aren't organized properly, your finances aren't organized properly, and you have a cost+ culture that's hard to kick.
A much cheaper and safer strategy is to get Congress to wire defense contracts for you. ULA has manufacturing all over the place. What that means is job losses at ULA will be politically unpalatable. Beyond that, a logical argument can be made against putting all the national space eggs in one basket.
Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force
#30The cynic in me assumes the 40% savings will just get shoveled into the F-35 furnace.
Now that you mention it, isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services?
At this point, I'm pretty sure the Stargate must be real and the crazy cost per unit for the F-35 is to hide R&D, construction and launch of a space defense fleet.