Briefs: More COTS info; Unreasonable update

It occurs to me that since NG bought out Scaled, this might provoke or encourage the other big boys to start checking the teeth of other small space companies. I'm not usually one to speculate, but it seems that this is part of what we're seeing here.

Posted by Simon Arthur at 12/02/07 20:05:00

NG bought Scaled to get access to their composite mfg capabilities, and more importantly, to their DoD revenue stream. Large companies buy small companies as a way to move money from the balance sheet to the P&L. Scaled primarily builds UAV components for a number of customer programs, all very profitably. I would not be surprised to see NGC either spin out, sell off, or just shut down the space project. It is sad, but I don't see where the gravy is in it for them, just lots of potential liability.

Posted by turkeysandwich at 12/02/07 20:35:06

Turkey - They won't shut it down. There are already contracts in place for SS2, and unless they want to shut that down and deal with the fallout from that, they'll leave it alone.

In addition, I suspect that in the buyout agreement, was a clause stipulating that the space division would be left alone. Rutan may shoot his mouth off, but I can't see him putting himself in a position to make pronouncements, and then have the rug yanked out from under him by NG.

In short - yes, they bought it for the UAV contracts, but I don't think they'll screw around with the space division unless and until there is a serious problem

Otherwise, I suspect things would've changed after the accident earlier this year

Posted by Ferris Valyn at 12/02/07 23:52:11

Hi Ferris,
I agree. NG would have to pay big bucks to Virgin if it tried to break the Scaled contract for the SS2 system. Also, Rutan has said repeatedly since 2004 that space projects will be his top priorities for the rest of his working life. There is no way he would have sold his shares in Scaled if he was not sure that he could continue to work on what he wants to work on.
- Clark

Posted by TopSpacer at 12/03/07 00:10:47

The SS2 will likely be the last space project that Scaled develops. NG isn't going to allow unproven, civilian space projects to eat into their profits. It doesn't matter what Rutan had been sure of in the past; he no longer calls the shots. It's all noses to the military aircraft grindstone after the SS2.

Posted by anon at 12/03/07 07:50:31

Anon, etc....

One thing that was said (a lot) during the Northrop-Grumman buy of Scaled was that there would be minimal interferance with Scaleds "Business" which NG considers designing and building inovative aircraft and new composites research.
They specifically BOUGHT Scaled to lock those abilities and process' into their company. From what I understand, (unproven I'm afraid but it has the ring of truth to me :o) Scaleds help was invaluable with NG winning and producing a composite LH2 tank for NASA that required no kiln or baking and passed with flying colors every test NASA threw at it.
While some at NG are less than 'thrilled' at the aquisition of Scaled and it's "unproven" civilian space project they will honor the Virgin Contracts at that very least. I would point out however that Rutan and Scaled have made a business out of putting new and 'unproven' ideas into flying vehicles and this more than anything else was the factor that prompted NG to 'buy' Scaled.

I will REALLY be surprised it Scaled doesn't turn into a NG version of the Skunk Works.

Randy

Posted by Randy Campbell at 12/05/07 07:49:08

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