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Proposed NASA budget plots entrepreneur-friendly course

President Obama's plan to abandon a return mission to the moon and rely more on private start-ups would be a blow to big contractors like Northrop and Boeing while encouraging smaller rivals.

February 04, 2010|By W.J. Hennigan
  • Buzz Aldrin walks on the moon in 1969.
Buzz Aldrin walks on the moon in 1969. (Neil Armstrong / NASA )

Big defense firms are reeling from President Obama's call to reshape NASA and scrap plans for sending astronauts back to the moon, an ambitious endeavor that would have meant billions of dollars in spending to develop new rockets and spacecraft.

The potentially seismic shift for the aerospace industry was announced Monday, the seventh anniversary of the loss of the space shuttle Columbia, and came as defense companies were bracing for a pullback in the Pentagon's spending on weapons.

But NASA's new direction could be a boon to private space entrepreneurs, who have thus far been funding their ventures mostly on their own dime. If the plan makes it through Congress -- a big if at that -- funding for spacecraft development could shift dramatically from entrenched defense firms to privately funded start-ups.

"Obviously, we're disappointed at the direction the administration seems to be taking," said Randy Belote, spokesman for Century City-based Northrop Grumman Corp., which is working on the lunar lander for NASA's next moon mission. "If the budget does go through, this will be a whole different ballgame. And we're going to have to look at our options very closely before we go forward."

The shift may already be underway. This week, NASA awarded $50 million in research funds to five private companies to design prototypes for a vehicle that could carry crew to the International Space Station. They would replace the space shuttle, which is scheduled to stop operating this year.

"The president has asked NASA to partner with the aerospace industry in a fundamentally new way, making commercially provided services the primary mode of astronaut transportation to the International Space Station," NASA Administrator Charles Bolden said as he unveiled the space agency's spending plans Monday.

The new direction would also bring an end to NASA's 5-year-old Constellation program to put astronauts back on the moon by 2020. Under the program, NASA is working on developing a new rocket, the Ares 1, a crew capsule and a lunar lander, similar to the Apollo program.

But canceling Constellation is not expected to be easy.

The government has already poured $9 billion into the program, which has created thousands of jobs in about 40 states -- and that's not including the hundreds of small-business suppliers across the country.

"When the president says that he's going to cancel Constellation, I can tell you that to muster the votes and to overcome that, it's going to be very, very difficult," said Sen. Bill Nelson (D-Fla.), whose state is expected to lose 7,000 jobs when the space shuttle program is mothballed.

Obama's plans for the space agency also call for restructuring the way that big contracts are awarded. Typically, multibillion-dollar projects such as Constellation have been awarded to a major aerospace firm, which in turn doled out work to subcontractors.

"It looks like those days are history," said Edmund G. Memi, a spokesman for Boeing Co. "There's going to be a change in procurement. Change is always difficult. But if that's the way it is, then we'll find a way to adapt."

Boeing, which has a large contingent of aerospace engineers in El Segundo, Huntington Beach and Seal Beach, recently got $18 million in seed money to develop space crew transportation systems. It received an additional $6.7 million for technology development for its joint rocket venture with Lockheed Martin Corp.

But the contracts are a far cry from the awards it got in the past.

In 2007, Boeing won an $800-million contract to develop the avionics for the Ares I rocket. The contract, which has meant 400 jobs, is now in jeopardy under the new budget plan

Many small, local firms could also be left in the lurch.

Votaw Precision Technologies in Santa Fe Springs is a subcontractor to Lockheed Martin, which got a $6.4-billion contract to build the crew capsule for the Constellation program. The 100-employee firm makes specialized tools for assembling rockets.

Votaw's work on the Constellation program, which makes up about 20% of the company's business, came just as it was laying off 25 employees because of the space shuttle cancellation and the overall downturn in the aerospace business.

"A program like Constellation could provide us with about 15 years of work," said Scott Wallace, Votaw's president. "If that's pulled out from under us, it would really hurt."

But a new crop of space entrepreneurs vying for the commercial contracts is welcoming NASA's shift.

Space Exploration Technologies Corp. in Hawthorne, founded by a former Silicon Valley entrepreneur, has been developing a rocket that can be flown for a fraction of the cost of today's launch vehicles. The company, known as SpaceX, recently won a $1.6-billion NASA contract to build rockets that can transport cargo to the space station.

The company was started by Elon Musk, who made a fortune when he sold his online payment business PayPal Inc. in 2002. Musk has put about $100 million of his own money into SpaceX.

william.hennigan @latimes.com

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