Most of this site’s readers are somewhat familiar with the kerfuffle concerning SpaceX and the US government’s Evolved Expendable Launch Vehicle (EELV) contract. For those who aren’t, there are quite a few sources for the story, including this site. But the US government isn’t the only one on the defensive from SpaceX’s aggressive launch development program and PR campaign.
According to this Reuters post (written today), a few European companies are concerned that SpaceX’s low launch prices will make the European offerings look overpriced and irrelevant. Specifically, Airbus’ branch of Defense and Space (the builder of the Ariane rocket), and Safran (no, not saffron), a company that builds solid rocket motors.
Unsubstantiated rumors go from there, with speculation that the companies of Airbus and Safran would like to start consolidation moves to fight SpaceX’s low rocket prices. Will this kind of reorganization really help against SpaceX? If European big companies and bureaucracies run like American big companies and bureaucracies, I don’t believe it will.
I do believe the companies are right to respect the progress SpaceX is making with the Falcon 9 rocket. But, and this is also a sticking point with the US government, SpaceX have not yet launched a rocket able to take very heavy satellite payloads into geosynchronous orbit (GEO)–at least until later this year (so their website says). So, there is some time to think the consolidation idea through.
Let’s look at how SpaceX is run. SpaceX is fairly lean in its day-to-day operations. And I’ve heard from certain sources that Elon Musk intends to run the company in “internet startup” mode for a good long time. They’ve also been “iterating” their Falcon 9 rocket designs almost every single launch, something that is considered quite risky in the industry. The company has “only” some 3,000 employees. Airbus, on the other hand, is big. It’s very big. According to the wiki, the company employs 63,000 people. Safran is even bigger, with 66,300 employees.
What happens when big companies merge? Just guessing from here on out, but I believe there will be some growing pains. People will get laid off. Morale takes a hit because of mixed messages about who will remain employed. Every group will be reorganized, and need time to adjust to different bosses and expectations. Plans will need to be re-explained and reviewed to many different people. Such a process requires a few years at least until a company can effectively move forward again.
But perhaps more importantly, the companies will form a bigger entity, and bigger almost never means “quick to respond.” A bigger organization will be unable to respond appropriately to a company as nimble and as small as SpaceX. Because combining two bureaucracies doesn’t produce a smaller, streamlined and competitive bureaucracy, but an even bigger one, with more fingers in the launch pie. More fingers in the pie, or stakeholders, may make risk-taking almost impossible. How will any of these potential results make launch costs cheaper?
While European laws are different than the ones here in the US, there may also be a monopoly question. Instead of going the route of merging, why not decide to have the two companies become more competitive with each other? This may be a foreign concept to some countries over there, especially France.
Either way, SpaceX will probably keep on its track, iterating rockets quickly, and maybe even successfully launching some heavy payloads into orbit with newer, possibly reusable, rockets, getting some European launch contracts in the process. That will surely get some competition going.