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SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

reuters.com

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Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#81

Post by oarsinsync »

rebootthesystem wrote: post #63
hudibras wrote: post #4

Earlier 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…

You are missing a very important data point: ULA receives nearly a billion dollars a year just to exist. They don't have to deliver a single vehicle. Free tax-payer money being gifted to the highest bidder. THAT has to end. Then let's see them compete.

How/why/what? Is it through subsidies, or preferred govt contracts, or what? Why are they just being given money?

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#82

Post by kuschku »

DigitalJack wrote: post #71
secfirstmd wrote: post #50

Earlier quoted context omitted.

I'm always curious how much of a "covert" budget for the next stealth or other projects, can be hidden in something as big as the F35 program.

That's an interesting point. I could only hope that it is actually true, and that the F35 is more subterfuge than boondoggle.

With the cost overrun of the F35 Project, though, one could probably finance a whole Stargate program, spaceships included.

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#83

Post by j1vms »

tn13 wrote: post #22
hudibras wrote: post #4

Earlier 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.

> Problem with monopolies is that they lag behind on innovation.

With an arguable rare exception being AT&T from the early 20th century up until about ~1980 perhaps, nurturing within it the renowed Bell Labs and its predecessor(s).

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#84

Post by TeMPOraL »

nitrogen wrote: post #76
patrickk wrote: post #75

Earlier quoted context omitted.

An interesting counterargument from Peter Thiel: " Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of. " http://www.wsj.com/articles/peter-thiel-competit…

I don't really buy it. Decades of monopoly profits are a powerful incentive to stagnate. Those profits definitely fund a lot of survival, and potentially some interesting side projects, but I wouldn't call most of it innovation or progress. As for ambitious research projects, some people just do those on their own, and for the rest, there's academia, government grants, and venture capital.

> As for ambitious research projects, (...) there's academia, government grants (...)

I.e. both of which provided by a de-facto ultimate monopoly which can afford "luxuries" like basic research because they don't have to worry it won't pay off next quarter.

> (...) and venture capital.

I want to see VC-sponsored ambitious research projects. VC-money-induced thinking is very short term.

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#85

Post by dasmoth »

tw04 wrote: post #55
azernik wrote: post #27

Earlier quoted context omitted.

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.

Under-invest? You mean not invest at all? While I get that Russia had rockets that were perfectly functional, they appear to have made no efforts at all in developing a more efficient in-house replacement.

Angara is making steady progress.

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#86

Post by TeMPOraL »

tn13 wrote: post #22
hudibras wrote: post #4

Earlier 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.

There are two types of innovation. Random "out there" market ideas? Yes, because upstarts have to find something to upset the monopoly, so they're self-selected to have something interesting. But long-term, actual innovation? Pretty much only monopolies can afford that. That includes governments, and that includes R&D departments of various corporations that can stay cost centres for years before accounting notices.

There are of course exceptions - like Elon, who has and for whom the profitability of the company is only a secondary, supporting concern.

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#88

Post by maaku »

hudibras wrote: post #4
mdorazio wrote: post #3

This 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…

Trouble for ULA is that they are used to cost-plus contracts. E.g. "I'll pay you 120% what it costs you to make." The incentive to maximize profits here is to maximize costs up to 80% of the highest amount the customer is willing to pay. For example, use obscure materials and manufacturing methods and lots of people in the assembly line. Better still if the rocket is built in parts in lots of different states and shipped around in pieces. Now with competition they have to go back and cut all those costs, which is not going to be easy.

(I used to work for Lockheed, although not in the missiles and space business. I wouldn't hold my breath expecting ULA to match SpaceX's prices.)

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#89

Post by maaku »

hackuser wrote: post #58
sounds wrote: post #51

Earlier quoted context omitted.

Launch insurance is also included, and for a very good reason.

It's included in SpaceX's/ULA's/whoever's bid? Insurance doesn't reduce the costs of (whatever event you're insuring), it just evens them out. Instead of paying for (e.g.) 1 failure every 25 launches, you pay for 0.04 failures on every launch (plus the insurance company's profit). So the payloads' costs still apply.

For the price differential we're talking about, it works out in the customer's benefit.

Re: SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

#90

Post by maaku »

bediger4000 wrote: post #48
Gibbon1 wrote: post #37

Earlier quoted context omitted.

I seem to remember that in the 1950's the US tried to design unitary multi-role fighter and it failed.

Not in the 1950s - that would have been the F-4 Phantom, and it was actually quite successful, in production from 1959 to 1979, and probably still flying (albeit totally hotrodded) by lots of air forces. You might be thinking of the F-111, which was supposed to be all things to all services. That was the 1960s. Or maybe the failed A-12, which was supposed to be an attack plane for all services. But you're correct, un…

A-12 is the SR-71, no?
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