Virgin Galactic Acquires Full Ownership of The Spaceship Company

Posted
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Doug Messier
on October 6, 2012, at 8:27 am
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Comments: 9 responses
9 Comments

SpaceShipTwo and WhiteKnightTwo circle over the Mojave Air and Space Port during a successful glide flight on July 18, 2012. (Credit: Bill Deaver)

MOJAVE, Calif., Oct. 5, 2012 (VG PR)–Virgin Galactic, the world’s first commercial spaceline, today announced that it has taken 100% ownership of its sister company, The Spaceship Company (TSC), by acquiring the 30% stake held by Scaled Composites (Scaled) since TSC’s formation under a joint venture with Virgin Galactic.

This acquisition, details of which are not being disclosed, marks the successful completion of a long-term strategy and signifies the end of the first phase of TSC’s development. During this development phase, TSC completed the build out of manufacturing and assembly facilities in Mojave, CA, established a specialized workforce and transitioned necessary assets from Scaled in order to begin building Virgin Galactic’s commercial fleet of WhiteKnightTwo (WK2) carrier aircraft and SpaceShipTwo (SS2) manned sub-orbital spacecraft. These vehicles will be utilized for Virgin Galactic’s planned spaceline operations which will be based at Spaceport America in southern New Mexico.

The completion of the acquisition comes as Virgin Galactic and Scaled begin to plan the handover of the SS2 development program to Virgin Galactic, with Scaled remaining fully committed to the final portion of the WK2 and SS2 test flight programs prior to Virgin Galactic commencing commercial operations.

Editor’s Note: Wow. This is pretty momentous news. And yet, the press release was published online at Business Wire at 6:23 p.m. EDT on a Friday at the start of the three-day Columbus Day holiday weekend in the United States. Friday evening is usually the time to dump news you don’t want a lot of people to see because few pay very much attention.

There are no quotes from the publicity obsessed Richard Branson, who takes advantage of any opportunity to get his name in the media. The morning that Stratolaunch Systems unveiled its plans last fall, Virgin sent out a press release quoting him even though he had absolutely nothing to do with the project. That release arrived in my email box even before Stratolaunch’s slightly delayed press conference got underway.

There also are no quotes from anyone at Scaled, The SpaceShip Company, or Aabar Investments, the firm owned by the Abu Dhabi royal family that is providing $380 million in funding for Virgin Galactic.

It’s interesting that Virgin Galactic will be taking over the SS2 development program from Scaled after flight testing is completed. That means the company will be in charge of any upgrades and enhancements to SS2 and WK2, including the likely future replacement of SS2′s hybrid engine with a liquid-fueled one. Virgin Galactic also is developing LauncherOne to place small satellites into space.

The end result is that a company owned by a British billionaire and backed by Arab investors will have full control over the future development of advanced space technology created by an American company owned by one of the world’s largest defense contractors, Northrop Grumman.  Huh. That’s pretty sensitive. I wonder if that explains why a low-key press release was sent out on Friday evening.

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  • ReusablesForever

    That’s not so surprising. VG obviously wants to own and operate everything in their world, unlike aircraft operators, i.e., airlines, buy their aircraft from independent manufacturers.

    Equally surprising is this item: in which some NASA/MSFC troops have the extraordinary idea of using rotors instead of parachutes for recovering vehicles. WOW!! They might want to ask Gary Hudson about that or at least Google “Rotary Rocket.” And even that was old stuff: we at the former Lockheed/Burbank operation looked at rotary recovery systems back in the mid-1960s and discarded them as too complex. Maybe MSFC will reinvent the wheel next!!

  • ReusablesForever
  • http://www.citizensinspace.org Edward Wright

    “the press release was published online at Business Wire at 6:23 p.m. EDT on a Friday at the start of the three-day Columbus Day holiday weekend in the United States.”

    And the same weekend SpaceX is preparing to launch its second Dragon capsule to the International Space Station. You couldn’t pick a better time to bury the news, except maybe Thanksgiving and Christmas.

  • http://www.parabolicarc.com Doug Messier

    Good point, Ed. They really didn’t want anyone paying attention to this news.

  • http://www.variousconsequences.com jstults

    I don’t think the foreign aspects are all that remarkable. There are plenty of foreign companies who employ US citizens to do work in the US on space/defense projects. Those sorts of operations just have to ensure they have proper controls in place on information sharing back to the home office. Here’s an example job description for the Spaceship Company; note the key requirement: Applicants must be U.S. persons as defined by the ITAR (22 CFR §120.15)

    They hire US citizens and ensure that any export controlled info doesn’t get shared with foreign nationals unless there are appropriate approvals from State or Commerce for export. For UK entities the US tries to make things even easier.

  • http://www.parabolicarc.com Doug Messier

    You might be right, Joshua. There might be other reasons to dump this news.

    In his post over at Citizens in Space, Ed Wright mentions rumors of tensions between Scaled and Virgin Galactic since the announcement of Stratolauch last year. I think he’s onto something.

    The tensions actually predate Stratolaunch. It’s hard to imagine two more different personalities than Burt Rutan and Richard Branson. Their companies reflect those differences, even after Burt’s departure. The Scalies say next to nothing; Branson can’t seem to stop talking. Except, strangely enough, in this press release.

    Despite Branson’s public praise for Stratolaunch,VG wasn’t very happy with Scaled’s participation. It’s a distraction from getting SS2 flying which it still isn’t 8 years after SpaceShipOne first flew. The delays are costing a lot of money.

    Thinking about it further, the press release seems like the announcement of a separation in a rocky marriage. The final divorce won’t take place until SS2′s development is over. When that will be is anyone’s guess.

  • http://www.anom.net Anom

    Doug,

    Do you think that the Virgin Galactic team of former NASA senior leadership has the technical experience to manufacture future SS2, WK2, LOX/Kerosene engines, and LauncherOne’s?

    You have been to Mojave and you probably know the senior members of their technical leadership team who are spread out in Washington DC (the CTO), Los Angeles (the CEO), and Mojave. Can they pull all of this off without Scaled’s 300 engineers?

    Does this mean that Scaled Composites with Paul Allen’s funding can compete with Virgin Galactic if they want to?

  • http://www.parabolicarc.com Doug Messier

    Sure, why not? SpaceX managed to build a team capable of turning out quality rockets and spacecraft. I think VG and TSC have done the same. Very sharp people there.

    It’s interesting. I keep running into some former SpaceX people at the spaceport. Elon Musk’s company is no doubt successful, but clearly isn’t for everyone.

    As for the rocket engines, they’re getting help from companies experienced in both hybrid and liquid fuel technologies. VG is not doing the LauncherOne project on its own.

    Stratolaunch is an orbital system so it isn’t in the same payload class as what VG is doing. I haven’t heard anything about Scaled wanting to do another suborbital vehicle, if that is what you’re asking.

    I think getting Stratolaunch to work is going to take a lot of effort over the next few years. Just building the hangars is a major effort. Between Stratolaunch and completing the WK2/SS2 testing and certification, the Scalies have a lot on their plate.

  • http://www.anom.net Anom

    Doug,

    Thank you. These are some good and informed points that you make.

    I was not suggesting potential competition between StratoLaunch/Scaled and VG for sub-orbital space tourism, but I am suggesting the potential for future competition for air-launched orbital systems carrying people and satellites.

    The competition for VG will come if an investor other than VG decides to build an orbital launch system that utilizes the large Stratolaunch aircraft. Because Scaled is no longer connected to VG through TSC, an investor can now assume that Scaled can help build a competing orbital launcher to VG that will use the Stratolaunch aircraft.

    An example would be an investor puting a lot more money into XCOR to have Scaled build an orbital vehicle for XCOR using XCOR engines and vehicle design and Scaled’s aerospace structures. If VG does not become this “investor”, then Scaled/Stratolaunch have the option to support a competing investor to VG.

    The huge StratoLaunch aircraft does not make sense economically unless it is flown over 100 times per year, which means that Stratolaunch needs a market for orbital or point-to-point spaceflight that is over 100 missions per year.

    VG seems to say that their next step will be an SS3 that is an inter-continental point-to-point vehicle dropped from a huge WK3 aircraft the size of Stratolaunch.

    XCOR, Stratolaunch, Scaled, SpaceX, and VG are puting out a lot of press releases and spending a lot of money on air-launched orbital launch systems so this will be interesting. Stratolaunch hit PDR a few weeks ago and plans to hit CDR in early 2013, so this is already moving pretty fast.

    Do you think that Orbitec’s 30,000-lbf engine test in Mojave has anything to do with this activity?