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Northrop Grumman to own Scaled Composites
Dolphinzilla writes "According to Space.com, Northrop Grumman Corporation agreed on July 5 to increase its stake in Burt Rutan's Scaled Composites (designers of Space Ship One, Proteus) from 40 percent to 100 percent. They have purchased the company outright, marking a new future for the space pioneering firm. 'Scaled Composites currently is working with Sir Richard Branson's Virgin Galactic venture on a vehicle designated for now as SpaceShipTwo, which would carry two pilots and six paying passengers into suborbital space for a few minutes of weightlessness. The company also is building a new carrier aircraft, dubbed WhiteKnight2, that will carry SpaceShipTwo to an altitude of 15 kilometers before releasing it to soar to suborbital space. The two companies last year formed a joint venture called the Spaceship Company to build the new vehicles.'"
http://en.wikipedia.org/wiki/Scaled_Composites_Spa ceShipTwo
While this is probably great for Scaled from a cash perspective - it is truly saddening for the space industry. Scaled has been for nearly the last decade pushing into areas where private firms have not been able to go in the past. They innovated and created a workable solution for "mass" sub orbital flights. Ultimately the next steps are going to be push to LEO - and beyond. I fear however that the innovation and creative problem solving that has defined Scaled to date is no longer going to continue. Despite the company's best wishes - they will no longer have the ability to take the risks and make the decisions necessary to continue innovating.
We will most likley see Scaled develop into a robust provider for Sub Orbital flights but I doubt that they will attempt to push further.
Best of luck to Rutan with establishing another aero company if he wants to...
-b.
I applaud attempts to create a tourism of space, but so far there is nothing especially interesting in the presented solutions. They are just building smaller and cheaper rockets. These "space ships" don't even achieve stable orbits. They're basically only throwing a large object high enough that it needs a few minutes to fall back. So besides the nice view and the temporary weightlessness (which can be achieved by an airplane), there's nothing special about it.
What I would like to see is some truly innovative solutions. Things that bring us closer to a conquest of space. Contests such as the X Prize should focus on that instead of giving money away for stuff that's been done 50 years ago.
The Slashdot story needs translation. Probably something like this, in my opinion:
"Northrop Grumman Corporation top managers decided they were bored with their regular business. They decided to buy a business they can talk about at parties. Of course, they have nothing creative to contribute. They are contributing only money. So, they will degrade Burt Rutan's Scaled Composites with their company politics, their need to be seen as important, and their general disinterest in doing the real work."
That scenario is a silly fantasy, perpetuated by people who have no idea how to run a business. If you buy a competitor just to make it go away, you realize no benefit from the purchase. Grumman bought Scaled because they want Scaled's capabilities in their toolkit. Scaled was not in the business of building fighter jets for the Navy, or bidding against Grumman on massive defense contracts. Calling them a competitor at all is a bit of a stretch.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Having worked at Scaled Composites in Montrose, CO I must say that the writing is probably on the wall for the Mojave Company. You probably haven't heard of a Montrose branch. That's because after having trouble with our bottom line being in cahoots with Burt Rutan we found a large company to buy us out and when our bottom line failed to improve we were bought out by another larger company. When the bottom line failed to satisfy the larger company we closed our doors and a fine r&d company with a lot of talented engineers and fabricators ceased to exist. Burt Rutan and many other people including some of our engineers are cutting edge innovators and people like them are the reason our country is so great but they are finding it harder and harder to develop new technologies and to be inventive because the big money companies that now own almost everything squeeze them out of their budgets. I think the solution is for the small companies to resist selling out to large corporations and continue their cutting edge work while taking on enough boring jobs to keep their bills and workforce paid. Too often today, companies are formed with the idea that if they show promise and profitability, they can sell out for a profit. I hope that Burt Rutan can continue to do what he does best and I'm fairly confident that, given his drive, talent, and inteligence he'll do whatever he needs to go on innovating and exploring new things.
If you buy a competitor just to make it go away, then you remove some of the downward price pressure in the market and therefore make yourself more competitive in that market than you would be otherwise. The closer to a monopoly situation you can get, the more control you have over the market prices. And that is a very real benefit, because it means more profits for you.
Whether the move ends up being worth it or not depends on how much you paid to remove the competitor versus how much money you can make as a result of the increased prices (or lack of decreased prices) you can charge afterwards. If a competitor looks to be on the verge of becoming very successful (and thus wielding a lot more market clout), then it's obviously better to buy them out earlier (before they get really successful) than afterwards because it's cheaper and it heads off the changes to market expectations that a successful, scrappy player can bring.
No, I'm afraid the possibility that Grumman bought out Scaled Composites for this reason is very real. Scaled Composites is probably close to the point where they look like they can make a very real change to the expectations of the market, and that would put the traditional players like Grumman in a very bad position.
Think of it as the equivalent of IBM buying Apple right before Apple made the mass-produced personal computer a reality. Doing so probably would have given IBM another few years, at least, of dominance of the computer market with their mainframes, but it would have taken a lot of insight and foresight on the part of IBM to know to make that move. That said, it was a lot cheaper to become a successful small computer manufacturer back then (Apple got started in a garage, and started shipping product while still in the garage phase) than it is to become a successful aerospace company today, so the buyout strategy would be more expensive for the big players in the case of computers because there would be more targets they'd have to buy out.
Use 'slashdot stuff' in the subject line in any email you send me if you want to get past the spam filter.
Scaled doesn't and has never manufactured Air/Space (mostly Air) Crafts on a mass scale.
They would build prototypes based on requests that they would receive.
Grumman is buying a design firm which they themselves have used in the past.
You hear a lot about Lockheed Martin's "Skunk Works", but Northrop Grumman keeps a lower profile in the "Crazy Ideas That Just Might Work" department. Perhaps they're looking to change that.
Ah yes, because nothing improves news more than pointless conjecture and outright fiction.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
Didn't Lockheed win the contract to build the Space Shuttle replacement vehicle? If so, this could be Northrop's bid to compete by pursuing the commercial sector...
It must have been something you assimilated. . . .