It was not a surprise that Boeing Co’s launch of its CST-100 Starliner capsule was postponed on Saturday.
It would have been the company’s first mission carrying astronauts to the International Space Station since NASA awarded contracts in 2014 to Boeing and Space Exploration Technologies Corp (SpaceX) to do the job. Boeing has been plagued with delays and numerous missteps since it took up the challenge to wean US dependence on Russia to ferry NASA crews and equipment to the space station.
With less than four minutes left in the countdown, the mission was aborted after a redundant computer check flagged a potential problem. The launch of the capsule, atop Lockheed Martin Corp’s Atlas V rocket, was rescheduled for yesterday.
Even if Starliner took off and reached the station, it would hardly be a roaring success. Boeing’s partnership with Lockheed Martin, United Launch Alliance, is about seven years behind on its first crewed mission, and the Atlas V is a cargo rocket that is at the end of its useful life.
It is hard to tell how much cash Boeing’s space business is burning, because it is tucked under its money-losing defense unit, but it is a problem the company cannot afford.
Boeing should carve out its space business and combine it with a bold, entrepreneurial space company, with the backing of deep-pocketed venture capital firms whose principals dream about going to space.
The unit desperately needs a shake-up to compete and can no longer rest on the laurels of its heyday when the Saturn rocket powered the Apollo missions to the moon.
The goal should be to match SpaceX’s success and help drive down the cost of space launches as NASA seeks to put people on Mars with the moon as a way station.
Boeing has failed so far at its mission to replace US dependence on Russia for ferrying people and supplies to the space station. Russia last year agreed to stay on as a space station partner through 2028.
As geopolitical tensions heat up, Russia now plans to build its own orbital station. Do not be surprised if China joins in that effort. If it were not for SpaceX’s Falcon 9 rocket, which has flown nine crewed missions since 2020, Russia could strand US astronauts in space.
This is not good for the US, nor for Boeing, which has serious quality and safety problems at aircraft factories that the US Federal Aviation Administration has criticized for having a dysfunctional corporate culture.
Boeing has its plate full trying to turn around its main business, and it could still take years to fix, said Tim Clark, president of Emirates Airlines, the biggest buyer of Boeing’s wide-body commercial aircraft.
“For me, this will be a five-year hiatus starting from now,” Clark said at the weekend. “I don’t think they will recapture their production line on all aircraft types.”
Boeing needs an all-hands-on-deck overhaul of its manufacturing process for commercial aircraft. If it cannot turn around its airliner business, the company is sunk. That is the top priority, and nothing else comes close. The company’s string of missteps has shown management lacks the ability to juggle that mess and turn around its space business.
That is not the case with Boeing’s other units. Global Services was started in 2017 as an extension of commercial aircraft activities and is the most profitable business right now. Defense, space and security are lumped into one unit.
Defense is a keeper because of the synergies it has with commercial aircraft, including shared platforms for the P-8 patrol aircraft and the KC-46 Pegasus mid-air refueling tanker. The security business, which includes cybersecurity, has more in common with defense than space, and the need to protect networks is only growing.
The space unit is a full-service company that maintains the space station, builds and services satellites, and serves as a main contractor for NASA’s Space Launch System, which is designed to put US astronauts back on the moon and on Mars.
United Launch Alliance, the Boeing-Lockheed partnership, launched the new Vulcan rocket in January after years of delays. Vulcan is designed to compete with SpaceX’s heavy-lift Falcon family of rockets.
There is value and potential appetite for a pure-play company in this second space race, but Boeing’s space business needs focus and bold leadership, which it cannot expect to get from current management. Besides keeping the commercial aircraft business from going under, Boeing CEO Dave Calhoun is busy finding a successor after he agreed to step down at the end of this year.
The defense, space and security unit posted a US$1.8 billion operating loss last year. There has been speculation that Boeing wants to exit its space partnership with Lockheed. Bloomberg News reported that the company is also looking to sell a couple of small defense businesses. This does not go far enough.
For the US, the space industry needs to remain several steps ahead of Russia and China, which landed its first spacecraft on the dark side of the moon on Saturday — the same day Boeing aborted its Starliner mission.
Boeing should turn its space business loose and allow a firm backed by deep-pocketed investors to revamp its culture and attract fresh talent. Instead of working on moonshots and going to Mars, Boeing needs to stick closer to home and concentrate on its main priority — building the highest quality commercial aircraft on time and under budget.
Thomas Black is a Bloomberg Opinion columnist writing about the industrial and transportation sectors. He was previously a Bloomberg News reporter covering logistics, manufacturing and private aviation. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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