Closing Bell - Manifest Space: Culmination of Vulcan with United Launch Alliance CEO Tory Bruno 7/27/23

Episode Date: July 27, 2023

As Amazon amps up its Project Kuiper satellite development, key partner United Launch Alliance readies to launch the debut flight of heavy-lift rocket Vulcan Centaur. CEO Tory Bruno discusses the plan to launch the rocket later this year, a recent mishap involving the explosion of a Blue Origin engine, and the space race between the U.S. & China.

Amazon is investing $120 million into a new Florida facility to prep its internet satellites for launch. Kuiper is the tech giant's multi-billion dollar plan to build a mega-constellation offering broadband service from space to customers on Earth. The first two prototypes will head to orbit on the new Vulcan Centaur from United Launch Alliance, which is the joint rocket venture between Lockheed Martin and Boeing. Vulcan suffered a mishap in March after a propellant tank cracked and ignited into a fireball. But ULA CEO Tori Bruno says its maiden flight, which will have those payloads for Amazon, as well as others, is still set to happen this year. This was an acceptance test failure, which will happen again, happens in a production run on a rocket, somewhere on a rocket, pretty much every month.

And it won't be news once, you know, once the other things we're doing are less interesting. The ones at the launch site have already been through this successfully and even been hop fired in a flight readiness firing. I literally have nothing else to do to qualify the Vulcan rocket other than reinforce the top of a steel tank so it's a little bit stronger. That's happening right now. On this episode, Bruno discusses the plan for Vulcan, the launch market's capacity crunch, which is due, thanks in part, to Amazon,

and the space race between the US and China. I'm Morgan Brennan, and this is Manifest Space. I think there's now a pretty widespread appreciation that for us, space is no longer just a force multiplier. It's absolutely required for basic military effectiveness. We've come to grips with that. We appreciate now that China knows it, and they are moving fast in terms of developing and deploying anti-satellite capabilities. So now it is a little bit of a fever pitch because we have to deal with this problem urgently. So what does that mean for ULA specifically? Well, it means that we need to do more than just be the two-space transportation capability. We have to pull our weight, if you will, against this big challenge. And of course, we've been

investing for a long time on what I would call through space capabilities, things that we do after the initial journey to space that can help with this problem. And of course, working with other people and teaming up to make sure we're doing the right thing. So what are some examples of that, the through space capability? I mean, is that things like in-space transportation capabilities or something else? No, it is exactly that and more. I mean, I would start it from the lift perspective with the notion that when we fly a satellite to space, a National Security Space Asset especially, we tell China a lot about what we're doing. They get to observe the launch, see the configuration of the rocket.

They generally have ways of determining, understanding whether there's multiple payloads or just one. They watch where I take it and where I put it. And so after all of that, they have pretty good guesses about what it is, where it would fit in a prioritized target list, God forbid, and where it'll ever be. And I don't have to do that. I can make it so much more complicated than that and obscure where it is, which makes them work harder and devote more of their space assets to finding targets and therefore less things to be able to address them. After that, once we're in space, there's an opportunity to increase the resiliency of assets by refueling them so they're free to move when they need to get out of a battle space, for example,

and by having things in space that can interfere with a threat asset approaching or setting up an attack vector on one of our precious, precious satellites. So who are you working with then in terms of partners on some of these new technologies and capabilities? And dare I ask, have you had to test them in real time in the real world to date? Well, of course, we are obviously working with our customer to understand their needs and what they understand about it. So that means the Space Force and the Air Force writ large. We are also forming partnerships with a number of small companies that are interested in doing in-space mobility and servicing. to say exactly who because we're talking to several right now and we haven't decided if we're going to narrow to a smaller set or continue to work with everyone. But it wouldn't be hard to figure out. Folks in the space community know about the companies that are doing servicing or trying

to. We're talking to all of them. So let's talk Vulcan. You're still going to fly by the end of this year. You're confident that's going to happen? Yes, that's our plan. And I'm feeling good about the path ahead. I literally have nothing else to do to qualify the Vulcan rocket other than reinforce the top of a steel tank. So it's a little bit stronger. And that's happening right now. I mean, there was some attention given in the last couple of weeks to, and CNBC reported on this, to one of the Blue Origin BE-4 engines exploding during testing. Is the engine, is the propulsion part of the equation still an issue? No, not really. You know, we're in sort of the position of everything we do is news. This was an acceptance test failure, which will happen again, happens in a production run on a rocket, somewhere on a rocket, pretty much every month. And it won't

be news once, you know, once the other things we're doing are less interesting. And so if I could put it into context for you, there's sort of two big kinds of tests you do. You do qualification tests at the very beginning, you do them once, and what they do is establish that your design is good. And that's wonderful, But then you have to go and build many units through time, right? That's the big production run. And the idea is that all of those subsequent units, whatever they are, valves, actuators, BE-4 rocket engines, RL-10 rocket engines, whatever they are, are the same as the one that you qualified. And you do that by having really good production disciplines and everything. But hey, what if an operator has a bad day and doesn't torque down a bolt right or

install an O-ring right? So the last thing we do before the supplier delivers a product to us, or we ourselves deliver it to the pad is you conduct an acceptance test. That's for workmanship. It doesn't reflect on the qualification or the design at all. It's really just to make sure it got built right because we're going to build hundreds of these things. And over time, you can drift away and make mistakes because people are human beings. That's what an ATP is or an acceptance test. That's what we were doing on this production asset. The ones at the launch site have already been through this successfully and even been hot fired in a flight readiness firing.

This unit did not pass acceptance the first time it tried. It had some rework done to it. It got back on the stand. It failed again. And the one thing that is unique about rocket engines that's different than all the other things that get acceptance tested is they generate a lot of energy when they're running. And so we install a whole bunch of extra instrumentation. We hook that up to a high-speed computer. And within that, we set limits. And we call them red lines.

And so if a pressure gets above this number, the computer shuts down the test. If a temperature gets above this number, it shuts down the test, and so on. There'll be several hundred red line parameters like that. And it's not unusual to have an ATP failure and have the computer shut it down. However, at the very beginning of running these acceptance tests on rocket engines, you don't always get that exactly right in terms of what that limit is for every circumstance. And the RD-180, the RL-10, the RS-68, I won't say other numbers, but everybody else's rocket engine too, at the front end of that production run, will have an ATP failure that doesn't get shut down fast enough, and you end up burning through your rocket engine because of all this energy. That's what happened here. In this case, I can tell you that it was shutting down on a pressure that went over one of these red lines. The pressure wasn't set low enough. I guarantee you it will be set lower next time. So this is sort of a natural occurrence and it really doesn't

comment at all on the qualification of that BE-4 engine or its design. That was a lot of context. Thank you. I appreciate that. You know, you mentioned, and I think that's one of the things about you, Tori, is that you are very transparent in terms of development of your rockets and of your space hardware. And you mentioned the tank before, and you were very transparent in terms of what happened with a mishap, with an explosion, not that long ago as well. I guess just walk me through that and why it makes sense to be so transparent when a number of other space companies, not so much so. Well, it's a couple of things, Morgan. I mean, first off, there's just a philosophy that,

you know, we are part of the national defense and that comes with an obligation and a duty and people need to understand what's happening so that they have confidence in what's going on. The other part of it is, you know, if you don't tell people what happened, then they imagine things and they will generally imagine something far more colorful and exciting that actually happened because that's human nature. So I always feel it's better to just tell people up front and then not have to correct misconceptions or incorrect data later. So in terms of Vulcan, the first two missions are going to be commercial missions and the Space Force wants to see those successfully conducted and then it'll basically sign on and certify the rocket for its own national security missions. Is that still the

game plan? Yes, that's still the plan. So we'll fly two certification missions to certify the vehicle to be able to fly national security space. So we'll fly in Q4 CERT1. We've just been talking about that. A few months later, we'll fly the next one. That one will be for Sierra Space with the Dream Chaser. That will leave. I can't talk exactly about the first National Security Space Mission because we're not in the window where I'm allowed to do that yet. But I can say that we'll have several months to analyze the data and for our customer to also look at the data and feel confident and buy off on the rocket. And then we're off and going. Yeah, these first two missions are pretty highly

anticipated from a commercial space standpoint. You just mentioned Sierra Space and the Dream Chaser, which I think has been long awaited. But then even with the first mission, the first two demo satellites for Project Kuiper for Amazon, for which you are a key launch partner. Yes, we're pretty excited about those two. Well, all three payloads, the commercial lunar lander for Astrobotic and even the Celestis Memorial that stays on the Centaur. But yeah, the Kuiper is a really, really exciting,

low latency, high performance internet in the sky. It's gonna be kind of a technology leap forward. I'm not allowed to tell you all about the specs. That's Amazon's news to tell when they're ready. But I can tell you that it's going to be a pretty eye-watering capability. And as soon as it's available, I'm getting it in my house. Wow. That's like a cliffhanger right there. How does it speak to launch capacity in this market over the coming years? It's something you and I have discussed in the past, but Amazon specifically last year came in and struck a record-breaking deal for rocket capacity. Has the market gotten tighter or looser since then? Yeah, that's a great question.

It is continuing to be in a state of really scarcity. So there's less capacity globally than there is available. And as we go through this transition period, it is becoming tighter because we are now seeing the capacity run up against the availability in Europe and here in the United States, as the rockets that were already ordered and really already in flow now have been all snatched up. So as people are trying to buy new rides, yes, there is a state of scarcity. And that's why it's so important that the national security customer buys in block so they can reserve slots on the launch manifest and preserve their flexibility to move their payloads around.

I probably have not shared this necessarily with you in the past because it wasn't relevant, but the majority of national security space missions move from the time they were originally planned to fly. And that's because these are often very sophisticated, technologically challenging kind of satellites. And so if they need to take a little bit more time to get something right, then that's perfectly okay. And in the past, I simply arranged the manifest so they can fly whenever they're ready. In an environment of scarcity, if you didn't manage that, you would lose that flexibility. And that's part of the reason this next procurement is a block buy. Understood. And it seems like the Space Force,

for example, is really trying to effort as much capacity or bring on contract as much capacity as possible and is looking at this from a competitive landscape of maybe even perhaps trying to bring in another launch provider as well. I mean, is that a smart move or do we have too much potential future competition, speculative competition in that market? Yeah. So I don't know that I can answer yet. I can tell you that the first draft of that RFP, we understood very well. It is an excellent acquisition. It was structured to have, you know, what we call the lane two or the lane for the mature providers to fly the very critical missions purchased in block. block, but then it also had this lane one that could be contracted every year annually. And any provider who could fly any individual mission, maybe not all of them like the lane two guys, but any mission they could fly could compete and participate in that to learn how to do national security space and be on ramped in phase four perhaps, if they were ready. Very thoughtful acquisition, very well done.

This latest RFP draft update from just last week is very, very different. And we have studied through it. We've read through it. And as you point out, it does have a provision to bring another provider into lane two for a very limited number of missions. And they have talked about capacity being a motivation for that. We have a bunch of questions to make sure we really understand what they're doing and trying to achieve. And at that point, I'll understand too, and I'd be able to tell you how we feel about all of that. I will say one additional thing. You know, there are potentially three domestic providers of heavy lift. There's really only two now. And, you know, three awards is really addressing three bidders. So there is certainly an effort for capacity. but in terms of a competitive landscape, you know, you don't,

it's not competition if everybody wins. So that's the part we're asking them about to make sure we understand. I see. Okay. To be continued on that front then. I do have to ask you some, I guess, broader business questions. And that is, there's been a lot of scuttlebutt that perhaps ULA is on the sale block. Is it true? That would never be anything I could talk about, whether it was true or not. Well, of course I'm going to ask. Okay. So if it were true, would that change anything for you in terms of your day-to-day operations? I don't know. I don't know how to answer a question like that. Sorry, Morgan. Okay. Fair. All right. So I guess just to circle back on China as we wrap up this conversation,

and that is, is it safe to say that we're in a new space race or a new era of space competition? Yes, we absolutely are. You know, having moved from that time when space made us more effective to today, we're not effective without space. That's a very different posture. And China has invested heavily, two decades of time, billions of dollars, massive infrastructure to be able to take that space advantage away from us. It also tells us that where we used to talk about, well, you know, what if there's a terrestrial conflict that could extend into space? That now, in my opinion, is unlikely. A terrestrial conflict will begin in space because without space, we're not militarily effective. Final question for you. Are you thinking about or adopting or investing in some of these new AI and artificial intelligence

generative AI capabilities? What does that look like? And how does it intersect with space? Yes, we absolutely are. We're looking at artificial intelligence in terms of how we plan our trajectories, how we analyze our flight data, how we make our systems more effective. And the way I would think about it is in terms of maybe a shift in the model. When we name things in this world, we always do it very sort of aspirationally, artificial intelligence. But I think maybe it's easier to understand and grasp if we think of it like other forms of automation.

So where we have robotics for physical automation to help people do their jobs more effectively, what AI is really about is automating some of the intellectual tasks that we do in our world to design and build and fly rockets. Think of it that way rather than something that's more like a simulated or artificial human being. It's a tool that helps us do tasks that would normally be very, very slow and time consuming in a quick way and in a way that's more sophisticated than we're accustomed to using

software in the past. Is that something that makes its way onto the factory floor as well? I know you've just wound down production of Delta and you're segwaying over to Vulcan now. I mean, are you thinking about it in that capacity as well right now in real time? Yeah, I absolutely am. But it's really a progression of applying the tool. And the first things I'm more likely to do with it is use AI to help me understand how to make the factory more efficient and how to build the rockets more quickly. Because as you know, and we talked about a moment ago, launch tempo is a big challenge now going forward in our industry. Final, final question. How many of the Vulcan rockets have been built or are on

the production line right now? Oh gosh. So we've built, we've completed, I'll say it that way, we've completed really three boosters. And in flow, we have, I'm counting in my head for a second because it's different every day. In flow, I think we have nine Vulcan rockets on the production line right now. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.