Beal Aerospace Terminates Operations
In a statement
from Beal Aerospace Chairman and Founder, Andrew Beal announced
that his company will terminate all operations effective today.
Mr. Beal indicated his company was no longer capable of competing
with a NASA subsidized 2nd Generation RLV. The following is a
statement from Andrew Beal:
Beal Aerospace regrets to
announce that it is ceasing all business operations effective
October 23, 2000.
Beal Aerospace has made significant advances
in low cost hydrogen peroxide propulsion systems and continues to
believe that low cost and reliable space launch systems are viable
and producible by relatively small commercial companies. Despite
our experience with cost overruns and schedule delays, we were
confident of our ability to ultimately succeed in the development
of our BA-2C rocket launch system. The BA-2C program was the
largest privately funded program ever in existence to build a
large capacity space launch system.
Unfortunately, development of a reliable low
cost system is simply not enough to insure commercial viability.
Several uncertainties remain that are totally beyond our control
and put our entire business at risk. The most insurmountable risk
is the desire of the U.S. government and NASA to subsidize
competing launch systems. NASA has embarked on a plan to develop a
"second generation" launch system that will be
subsidized by U.S. taxpayers and that will compete directly with
the private sector. In my capacity as founder and chairman of Beal
Aerospace, I previously testified to a congressional subcommittee
that government subsidies to competing launch providers
constituted the private sectors biggest business risk.
Nonetheless, NASA remains committed to such an effort, and
congress last week approved an initial $290 million to begin an
effort that NASA declares will result in the government funding of
one or two human rated subsidized launch systems within 5 years.
While Beal Aerospace recognizes the need for NASA to develop a
human rated launch capability for space station and other human
missions, we find it inexcusable and intolerable that NASA intends
for these subsidized systems to additionally compete for non-human
rated missions including cargo for the space station and
commercial satellite missions.
We wonder where the computer industry would
be today if the U.S. government had selected and subsidized one or
two personal computer systems when Microsoft, Inc. or Compaq, Inc.
were in their infancy.
Other significant and uncontrollable risks
we face include (1) federal laws mandating our potential liability
for pre-existing environmental contamination at the only available
cape canaveral launch pads, and (2) uncertainty over U.S.
government state department approval to launch from our own launch
facilities in the foreign country of Guyana. In spite of these
additional risks which we have faced for some time, we would have
remained in business if the government would have simply
guaranteed that NASA’s subsidized launch systems would never be
allowed to compete with the private sector.
There will never be a private launch
industry as long as NASA and the U.S. government choose and
subsidize launch systems. While Boeing and Lockheed are private
entities, their launch systems and components are derivatives of
various military initiatives. Very little new effort takes place
without significant government subsidy, control, and involvement.
While we believed we could compete successfully against the
government subsidized EELV launch vehicles, the characteristics
and depth of subsidy for NASA’s new initiative as well as its
ultimate performance are impossible to determine or evaluate.
Once it became clear that NASA and Congress
intended to proceed with their new competing launch systems, our
only remaining choice was whether to cease operations entirely, or
to evolve into a government contractor role like Boeing and
Lockheed and seek government contracts to assist the development
of the NASA system. We have elected to cease operations.
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