The Brevard Technical Journal

Lockheed Martin poised for expanded military opportunities
Rising costs, overcapacity contribute to soft commercial market

by Anne Straub
Brevard Technical Journal

Lockheed Martin's Atlas V launch control center during the July 17, 2003 launch of Rainbow 1, a commercial communications satellite. The control center is located in the Atlas V Spaceflight Operations Center, located at Cape Canaveral Air Force Station. Photo courtesy Lockheed Martin, © 2004.

The future of launch services at Lockheed Martin Space Systems Co. already is here. More specifically, it's at Cape Canaveral Air Force Station's Pad 41.

That's the launch site for the company's Atlas V, which has recorded three successful missions as it starts its own mission to replace the company's Titan IV and earlier versions of the Atlas.

"That is the future of space launch," Jim Banke, director of communications for Space Foundation, said of the Atlas V and Boeing's new Delta IV. Both were developed for the Air Force's Evolved Expendable Launch Vehicle program.

The military remains the biggest customer for launch services, and likely will continue to be as the commercial market is expected to remain soft for the next five years, said Phil McAlister, director of Futron Corp.

"Right now, it's a very good customer," McAlister said of the U.S. government. "With every military operation, the Pentagon's appreciation for space assets has grown exponentially."

That increased value on space resources, coupled with a president who's concerned about security, add up to funding. "Those two things together make a very compelling case for companies like Lockheed Martin," said McAlister, whose company provides space-related business analyses.

Government business is filling the gap left by the lack of commercial launch business. Instead of enjoying a commercial launch boom forecast a decade ago, launch companies are facing an overcapacity that dampens new business.

Lockheed Martin's first Atlas V rocket arrived at Cape Canaveral Air Force Station's SKid Strip on June 5, 2001. It was offloaded the following morning and processed for its initial launch. The Atlas booster and Centaur upper stage is shipped from Denver, Colorado to the Cape on an AN-124 Russian transport aircraft. Photo courtesy Lockheed Martin, © 2004.

Reasons are many. "It's everything from satellites lasting longer, to the demand not being there, to fiber optics and other ways of delivering signals," Banke said.

While launch companies were busy putting satellites in orbit, other companies were laying fiber. After the telecom bubble burst, the industry was left with much more capacity than it needs.

Based on last year's small pick up in satellite orders, some commercial telecommunications satellites could be ready for launch next year, said Marco Caceres, a space analyst for Teal Group. "But it's not a boom," he said, noting that most orders are replenishments for systems that are already in place. "I think everybody's hurting," he said of the commercial launch industry worldwide.

The current cycle of rising costs works against an increase in commercial business. "With fewer commercial missions, costs rise for government missions. As government missions become more costly, prices rise for commercial missions. It will take a surge in commercial demand to break the cycle, or increased competition in the form of new launch companies at the Cape Canaveral Spaceport," said Eddie Ellegood, director of policy and program development for the Florida Space Research Institute.

Ben Dusenbery, Titan IV program director, and Ed Christiansen, Atlas program launch conductor, are leaders in Lockheed Martin's Launch Operations teams at Cape Canaveral Air Force Station. Photo courtesy Lockheed Martin, © 2004.

Boeing, Lockheed Martin's main U.S. competitor, has announced it's focusing the Delta IV on government business rather than devoting resources to competing commercially. That could work out to Lockheed Martin's advantage. "The market's not dead," Caceres said. "I think eventually when the market comes back, Lockheed's going to be in a better position to win more of that business."

Strengthening the company's bottom line, last year Lockheed Martin won seven Air Force launches that had been awarded to Boeing. The Air Force changed the award after the discovery of ethical lapses at Boeing. The military also allowed Lockheed Martin to develop a launch site at Vandenberg Air Force Base in California, giving the company the ability to launch over the Pacific.

"Lockheed Martin is as well-positioned as they have ever been," McAlister said.

The company's future is its Atlas V, a larger, better designed and more automated rocket than its predecessor, said launch conductor Ed Christiansen.

The actual rocket isn't the only change the Atlas V brings. Lockheed Martin assembles its new Atlas in a Vertical Integration Facility and rolls the rocket to the launch pad, rather than putting the rocket together on the pad. The company consolidated several launch functions into the renovated and expanded Atlas V Spaceflight Operations Center, located several miles from the launch pad. The pad is Complex 41, which was reworked after hosting Titan launches for more than 30 years.

The end of the Titan program means a loss of jobs at the Cape, where Titan accounts for about 470 of Space System's approximately 750 employees. Lockheed Martin is encouraging Titan workers to look for openings at other facets of the company. "The baton will be passed to Atlas V," said Ben Dusenbery, Titan IV program director.

Christiansen hopes future work for the Atlas V includes a role in the proposed moon and Mars exploration initiative.

The company will be competing against Boeing for that business. In the offing are a new Crew Exploration Vehicle, plus a way to get it into space. Experts expect the Atlas V, Delta IV or an unmanned vehicle derived from the shuttle to be top contenders for the job.

"There's a lot of confidence in both launch systems," Banke said of the Boeing and Lockheed Martin rockets.

The two will fight for the biggest piece of the pie, but both stand to gain regardless of who comes in first. "There's no way NASA could put together a complete program without the help of those companies," Caceres said. "You're talking hundreds of billions of dollars, and a lot of that is going to go to Lockheed Martin, one way or another."