SpaceX has put themselves in a corner. Next week’s launch of the new Block 5 Falcon Heavy has to go almost flawlessly or much, if not all, of what they have will go down in flames with the rocket.
SpaceX 1 September 2016 Static Test Explosion – Ignition
SpaceX’s Financial State
SpaceX played a risky game last year focusing on making money in commercial launches. That should have been a big boost to their revenue stream, but in January they announced layoffs. SpaceX also announced a sudden cut in the number of launches in 2019. [Source: Business Insider 21 Jan 2019 – Dave Mosher] That might indicate that SpaceX was offering bargain prices to its customers to land contracts but losing money in the process.
One line in a statement made to Business Insider by a SpaceX representative regarding the layoffs is telling:
This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.
Taken at face value, SpaceX’s rationale for the massive layoffs in its rocket manufacturing division sounds like a proactive business strategy, but why be so forceful in the justification? They insist that the “only” reason for the layoffs is for the “challenges ahead.” SpaceX then repeats itself at the end of the sentence by saying, “and would not otherwise be necessary.”
SpaceX 1 September 2016 Static Test Explosion – Upper Booster Engulfed
The Organization Doth Protest Too Much
The defensiveness of the statement indicates that the layoffs are necessary because SpaceX is already in trouble. By saying the layoffs were to prepare for a grim future, they may have confirmed that they were a reactionary, not proactive move.
SpaceX 1 September 2016 Static Test Explosion – Entire Rocket/Pad Engulfed
The Falcon Heavey Gambit
Up to now, SpaceX has landed customers on bargain pricing, but it is likely that they desperately need to attract customers that can pay top dollar. Enter the U.S. military. SpaceX has yet to gain the full confidence of the U.S. Air Force for their military satellites. Elon Musk may have thought that one successful launch using the old Block 4 boosters would have the U.S. military eating out of their hand, but that didn’t happen.
Now SpaceX desperately needs another spectacular success of the Falcon Heavy to convince those with deep pockets that their bird is equal or better than the competition.
But what if the next Falcon Heavy launch is a failure?
SpaceX 1 September 2016 Static Test Explosion – Upper Stage with payload fall to the ground
What’s at Risk for SpaceX
It is unlikely that SpaceX will experience the worst-case scenario of the complete loss of the Falcon Heavy and its Arabsat 6A satellite, but what would happen if the nightmare happened?
No space cred for the Falcon Heavy. The Falcon Heavy would not be in consideration for heavy-lift payloads by the military, nor private customers at any price.
No human-rating cred for Block 5 redesign. NASA requires seven successful launches of the Block 5 booster without a significant redesign to gain a human rating. The 15 November 2018 launch of Booster 1047 was the first with newly designed tanks. Since then, SpaceX has had six launches with the new design. The Falcon Heavy would be the seventh launch. Failure would mean another delay in obtaining the human rating for the Block 5 booster.
Loss of two Falcon 9 Block 5 boosters and one Block 5 core. The two side boosters would be the biggest loss. They are planned to be reused on the next Falcon Heavy flight in July. That flight would have to be delayed for months and SpaceX can’t afford that delay. Remember that layoff? That hit the rocket manufacturing plant the hardest.
More expense with no revenue. Insurance would cover most, if not all, of the loss of the vehicle, but it’s not going to provide more revenue. More cuts would have to follow, pushing back the launch schedule even farther.
Loss of pad, more delays. It would be bad if SpaceX lost the vehicle in flight, but in the worst-case scenario, the loss would occur on the pad. It could be a year or more to rebuild the launch pad. The destruction of the pad and the two side boosters would bring into question whether SpaceX could make the contracted cargo deliveries to the ISS.
Testing of the Dragon 2 crew capsule flights would be jeopardized. If the April launch of the Falcon Heavy fails, Boeing would probably be able to coast into NASA’s crew capsule contract.
Enough Pessimism, What If the Falcon Heavy Flies!
A win for SpaceX would be a successful launch and recovery of at least the two side boosters, but that only buys them three months. The April Falcon Heavy launch is Act I of a two-act play. Act II is a follow-up flight in July of the Falcon Heavy reusing the two side boosters from the April launch. Part of the show is to demonstrate that the boosters can be turned around and relaunched in a matter of weeks.
The U.S. Air Force may give SpaceX a heavy-lift contract even before the July flight of the Falcon Heavy; however, it is likely that they will negotiate a below market price and it may be contingent on both the April and July flights meeting all expectations.
Less than a year ago Elon Musk was boasting that in 2019, SpaceX would have a 24-hour turnaround on a Block 5 booster. [Source: NASASpaceflight.com 17 May 2018 – Michael Baylor] Eight months later SpaceX was cutting their labor force by ten percent. Rather than two launches of the same booster in 24 hours, this year SpaceX is struggling to have more than one launch per month.
SpaceX fans worship Elon Musk’s great vision but there is a fine line between vision and false bravado. Musk is known to continually overstep that line. Now one misstep with next week’s Falcon Heavy launch and SpaceX is risking a lot more than the loss of one satellite.