XCOR Layoffs Update

Chine panels being fitted to the side of the Lynx. (Credit: XCOR)
Chine panels being fitted to the side of the Lynx. (Credit: XCOR)

From what I’m hearing, the layoffs are part of a retrenchment to focus on projects that are bringing in revenue, such as the upper stage engine XCOR is developing for ULA. It appears that many people working on the Lynx suborbital space plane were laid off.

The company’s burn rate — what it was spending every month — was just too high, especially as it is maintaining facilities in Mojave, Calif., and Midland, Texas. It’s also been a while since XCOR has made any announcements about new fundraising rounds.

Work on the Lynx — which has been under construction for about four years — is being suspended. The last update on its progress from XCOR, provided at the Space Access 2016 Conference in April, indicated that one wing had been built by the manufacturer and funds were required to construct the second wing.

Most of the rest of the vehicle has already been assembled. Work was continuing on closing the cycle on the vehicle’s engine as well.  That work will continue along with development of the ULA engine.

The Lynx is a precursor to  a fully reusable, multi-stage system that is intended to make human space travel a routine activity. The reusable engine that XCOR is developing for ULA is a step in that direction, but it’s only one piece of a much larger puzzle. Without the Lynx as a test bed, the project will be more difficult to undertake.

It is unlikely that much work on the orbital system was being done in recent months given the financial constraints and a lack of personnel to do it. In reorganizing the company last year, CEO Jay Gibson had designated founders Jeff Greason and Dan DeLong to focus on the orbital system.

That new management structure didn’t work out. Greason, DeLong and co-founder Aleta Jackson left XCOR in November. They subsequently established a consulting company focused on rapid prototyping.

That’s what I know so far. More updates as information becomes available.

  • krf

    Is there any good reason to keep any operations in Mojave? If Lynx got restarted, could they do test flights out of the Midland spaceport?

  • Douglas Messier

    That’s a good question. They’re all set up already to do engine testing in Mojave. I don’t know what the status is of their efforts in setting up a test stand in Midland.

    They use an old World War II munitions bunker in Mojave with a concrete test stand outside. There are identical munitions bunkers in Midland.

  • schooner1

    So does anyone know if XCOR has the cash to make refunds to the hundreds they have sold tickets to?

  • Henry Vanderbilt

    Longest runway at Midland airport is 9500 feet. Longest runway at Mojave is 12,500 feet. A significant difference for flight testing a rocket plane.

    There may also be airspace regulatory differences. With Edwards AFB right next door, Mojave has access to airspace where high-performance flight test is long established. I don’t know what the situation at Midland is, but I wouldn’t be surprised if there’s more regulatory paperwork left to do to cover things XCOR already has lined up at Mojave.

  • publiusr

    I’m not shedding any tears–esp since Roton/greason dumped all over Ares/Constellation in a panel he should have been no part of.

    Time to scrap Space Ship 2 as well.

    If you MUST go suborbital–scale up a Space Ship Three to go under stratolaunch.

    This way–the stratolauncher has more paying flights–you can get more sub-orbital tourists, etc.

    Let the folks who worked on Lynx join with Dream Chaser–and see if they can scale that up to go atop Falcon Heavy so we can finally get HL-42.

  • ThomasLMatula

    I would ask the opposite question. Is it possible for them to abandon Midland? All of their problems seem to have started with the move to Midland. There are good reasons places like Mojave are hotbeds of innovation while places like Midland aren’t.

    Also its probably time to get rid of Jay Gibson and put Jeff Gleason back in charge, along with Dan DeLong and Aleta Jackson. They did a good job running it for its first 16 years.

  • ThomasLMatula

    Even more important are the homes, buildings, farms and oil fields around Midland. It may be suitable for operational flights, but I would really have to wonder about the FAA AST if the approved test flights especially given the volume of commercial airline flights using it.

  • John_Schilling

    What fraction of XCORians, past and present, would flat-out refuse to move to Midland at this point? Once burned, twice shy…

    Southern California has a much stronger aerospace labor pool than West Texas, and Mojave is close enough that one doesn’t have to burn any personal or professional bridges to work there. Particularly if your heritage work force has already set down roots in SoCal, you might wind up without a viable team if you insist on concentrating in Midland.

  • patb2009

    Mojave is a long way from LA, and even longer from San Diego.

    You don’t ruin your family connections moving but unless you are wired up for a 4 hour daily commute, it’s not really easy to take other jobs without moving.

    The advantage is that working in Mojave you can day trip to Huntington, San Bernadino, San Diego and do a job interview.

  • BeanCounterFromDownUnder

    That vehicle, while being nicely shaped, looks like a complex beast to build. Complex equals time-consuming and expensive. Could this be part of the issues? Bit like VG. Major underestimation of the time and cost involved?
    Cheers

  • Ann Jones

    Note to self: Invite John Schilling to our house for dinner.

  • mzungu

    It’s a good call, be glad this CEO actually have a business sense when working in aerospace, he just might save what’s left of it.

    Think they are competing with Blue Origin and Aerojet on that upper-stage contract. Which are better funded competitors, one is more experienced, and the other just as eager to low ball to get the foot in the door… It’ll still be a tough road, but at least it’s a more sounded plan. 😛

  • Sad news. Hope they can turn the situation around.

  • John_Schilling

    You can also spend M-F in Mojave, weekends in LA or wherever. This makes a big difference to someone with a family, and maybe a bigger difference to someone trying to start a family. And it means you don’t really have to move to take another job, just give up a cheap apartment.

    Getting people to move to Mojave is hard enough with those limited advantages. Midland? Don’t count on it.

  • Douglas Messier

    Most people who work in Mojave live elsewhere. Palmdale & Lancaster are in northern Los Angeles County. within easy commute of Mojave. They are large suburbs with all the amenities. It’s also an easy drive down to LA proper.

    Midland Odessa is about the same population as Palmdale and Lancaster. Amenities about the same. But it’s about five hours from any other major city driving.

    Midland has been problematic for XCOR. The funding was good, but it came with requirements for staffing up the Midland hangar. There were then years of delays with Lynx that prevented them from fully moving the operation because the company planned to do initial testing here.

    Midland has the advantage of lower taxes and fewer state regulations, but it is also a more expensive place to live and work.

  • ThomasLMatula

    The classic old space perspective. Abandon your commercial markets, go for government contracts like the DARPA one below. Follow the normal boom/bust cycle of cutting your workforce when contracts are thin, ramp it up when you get a new one. Afterall technicians and engineers are nothing but high paid migrant labor (as one old space VP stated to me years ago)…

    https://www.inverse.com/article/16253-blue-origin-virgin-galactic-xcor-aerospace-battle-for-darpa-space-contract

    Blue Origins, Virgin Galactic, XCOR Aerospace Battle for DARPA Space Contract
    May 27, 2016

    “On Monday the agency set the deadline for July 22, at which point it will pick
    between the designs of three groups, Northrop Grumman, partnered with
    Virgin Galactic; Boeing, partnered with Blue Origin; and Masten Space
    Systems, partnered with XCOR Aerospace. The winner of the public-private
    partnership with be awarded $140 million in DARPA funding to build the submitted designs for the reusable rocket.”

    But then when you put a CEO whose only experience is with government contracting in old space its what you get, another promising New Space firm killed off by venture capitalists unfamiliar with real space commerce. Yes, XCOR may survive, but as an old space contractor, not as a space commerce firm serving building commercial markets in space.

  • Henry Vanderbilt

    Blue Origin’s BE-3 is a bit inconveniently large at ~100 Klbf thrust, while Aerojet’s typical pricing model is just scarily large. (These days when they try to low-ball, nobody with a clue believes them any more.)

    Which is not to say XCOR has an easy road, but between their demonstrated low cost fast development capability, their highly-reusable approach, and their hot-fired LH2 tech-demonstrator, they’re in a pretty good position.

  • Henry Vanderbilt

    No offence intended, but I think you’re just wrong here. Dave Masten said last month that XCOR’s part in XS-1 is essentially done, for one thing – XCOR worked with Masten on the initial propulsion design, but Masten is taking it from there and XCOR is no longer involved.

    And the market for high-energy upper stage engines is transitioning from a government-contracting model to a commercial one. Which is why Aerojet is likely to have problems (recent lip-service to commercialism notwithstanding) and XCOR and Blue Origin are the commercial LH2 players to watch.

  • Henry Vanderbilt

    I’d say, you’ve got a big part of it there. I agree the current chief difficulty with Lynx is the TONS of nitpicking detailed systems engineering & integration involved in turning a closed aerodynamic design plus a won’t-quite-fit-yet innovative propulsion system into a functioning rocket-plane.

    Kudos to Jeff & Dan (and Doug, and others) for the genius work involved in bringing Lynx this far on a shoestring budget – tens of millions, where at least one team visiting from an aerospace major said it’d have cost their organization a billion or two.

    But, my opinion, some part of the current problem is that it took longer than it should have to bring in the nitpicking detailed systems engineering & integration talent essential to actually finishing and flying Lynx.

  • Henry Vanderbilt

    On Midland, regardless of the original wisdom of the move, I expect there are at this point significant contractual obligations involved in staying there.

    On your second paragraph, strongly disagree. See previous post about how what’s needed now is painstaking detailed complex-systems integration, a different skillset than the conceptual/technological genius that brought Lynx to initial basic technical viability.

  • Henry Vanderbilt

    As for “a bit like VG”, I will note with no further comment that VG to date has spent more than it cost SpaceX to initially reach orbit. XCOR meanwhile has gotten as far as it has on roughly an order of magnitude less.

  • ThomasLMatula

    Interesting, except according to Doug’s post above, its the Lynx that is being tossed under the bus by the new management.

  • ThomasLMatula

    If XCOR is not part of Phase II then it makes sense under the old space model to downsize.

    As for Jay Gibson, his entire background has been in government contracting. It will be interesting to see how he interacts with the commercial launch firms and adapts to the commercial way of doing business.

    But time will tell which of us is right in terms of the future direction of XCOR’s core business.

  • Henry Vanderbilt

    Suspended isn’t the same as “tossed under the bus”. And the point is to eventually bring together both the currently needed skillset (which the new management has) and the money to continue to flight. You’re of course entitled to your opinion, but as far as I can see, swapping back to the previous management wouldn’t obviously solve either problem.

  • mzungu

    “Commercial” means business, business means u sell things to who ever wants to buy your shit, government or private. What percentage is the government side of SpaceX? Blue Origin is moving over there, everyone of these small startup is trying to get the gov $, it’s just the reality of the market. Even the majority of these newfangled cube sats are from education institutes, which pretty much is gov money.

  • mzungu

    It’s PR Speak to cushion the blow

  • patb2009

    I’ve lived in Rosamund. While Palmdale isn’t too bad a commute to Mojave , it’s a half hour but the roads are good and the traffic light. I’ve also tried driving down from Palmdale to LAX, for a weeks worth of conference meetings. It’s nominally 90 minutes but with Traffic you can easily see 2-3 hours, especially if anything serious goes wrong. (Accidents, busted water mains, mud slide, smoke,)… I’ve known people who did the daily Palmdale to Central LA, but it also ruined their lives.

    I guess it’s a value judgement. I view it as uncommutable but, some do it.

  • patb2009

    I didn’t see the strategic value of the Midland location as outweighing the incredible costs, of trying to manage a second location but, obviously I was not making those decisions.

  • Douglas Messier

    Living down in Palmcaster means you can spend the work week up in Mojave with a fairly easy commute. Weekend traffic in LA is less crazy than during the week, so you have the option of going down there then.

    Getting through the Sepulveda Pass to Santa Monica, LAX and points south can be nightmarish depending upon the time of day. Good news is I think they have finally finished construction on the road widening project. So, there are more lanes to get all clogged up.

    The thing about Mojave is it lacks many amenities. Pharmacy? Yeah, sort of. But not like CVS or anything. Doctor’s offices? Nope. Movie theaters? No. Department stores? A bar open on the wekends? Not even that.

    It’s Rosamond, actually.

  • Douglas Messier

    XCOR hasn’t been involved in Masten’s XS-1 for a while now. It wasn’t a recent thing. I doubt there’s a direct cause and effect.

  • DrZarkov99

    The Oklahoma Spaceport (old Clinton-Sherman B-52 base) has a 13,000+’ runway twice as thick and wide as any other in the U.S. (designed to allow takeoff of two fully loaded B-52s simultaneously). It has an FAA/AST approved suborbital flight area, with a six hour window for spaceplane operations. If anyone could acquire the Lynx, testing and operations would face no bureaucratic obstacles in OK.

  • ThomasLMatula

    Folks in the space industry, being used to only government markets, tend to be sloppy with the use of business terms. Commercial, in the world of real business, means any markets where demand is determined either directly or indirectly by private consumers of the good or service. Firms that succeed in those markets must understand this an become part of the value chain. Space tourism is a commercial market.

    Educational institutions, especially colleges and universities, are considered part of the non-profit market. Although some be part of state governments, they only receive a minor portion, 20-40 percent depending on the state, from state funding and it usually goes for core overhead expenses. The majority of funding for state institutions, and 100% for private ones, comes from donations, grants (public and private), and revenue from tuition, fees, royalties, etc. As a result, and because of the large number, the characteristics are very similar to commercial markets and firms must understand the value chain to succeed.

    Government markets by contrast only have one or two buyers who interest is not in value or quality, but being able to link the purchases to their basic function and defend them politically. The value chain doesn’t apply. Politics are far more important than economics. The SLS/Orion is a prime example.

    Government markets are the world CEO Jay Gibson is from. As a former Deputy Under Secretary of Defense in the Office of the Secretary of Defense under the Republicans the Old Space firms know him well. And they also know that in a future administration he may well be in the Secretary of Defense again perhaps even in the next administration. Its called the revolving door. So this gives XCOR an advantage in getting subcontracts for engine and related engine work from old space firms like Boeing, Lockheed, ATK Orbital and ULA. One of the old space firms may even decide to buy it out.

    This is the “skillset” he brings to the table.

    But it also means that the Lynx, a product focused on commercial products, will be left out in the cold. A CEO with only government contract experience will not understand the possibilities for it, not understand how its sold differently than a government rocket, not see its potential.

    So I don’t see much hope for it. It has been “suspended”. In a couple years when XCOR is earning money as an “old” space contractor, or is owned by an “old” space firm, what is left will be quietly scrapped. They may not even waste the money to truck it to Midlands if they are stuck in their lease for the Mojave hanger.

    But realize XCOR, with its founders gone along with the majority of the workforce on the Lynx is at a watershed where its going from the “new space” world to the “old space” one. So XCOR may survive, but space opening up to the masses apparently has lost another firm.

  • ThomasLMatula

    Same goes for Spaceport America. And New Mexico has shown a willingness to help new space firm get started.

  • AstroMan

    Are you sure about VG development costs exceeding those of Dragon and Falcon?

    AFAIK, SpaceX spent a total of $50M of NRL funding for Falcon 1, mainly Merlin, development to launch TacSat-1, which it never did launch; $278M for Falcon9 and Dragon under its 2006 COTS contract; that was supplemented in 2011 by an additional $118M according to GAO-11-692T. That totals $446M.

    Has VG gone through that much funding?

    SNC has spent less than 50% of that to date, right?

  • patb2009

    VG faces a different problem.

    1) SpaceX could tolerate a fair degree of risk, as demonstrated in the first 3 Falcon 1 launches and that Falcon 9 which disintegrated climbing the hill. VG can’t have that happen operationally. Losing a bird in pilot training has been harmful to their marketing.

    2) Going one way is hard. Going Roundtrip is harder. The Germans got the V-2 going in the early 40’s in the middle of a war.
    The X-15 took until 1959, long after the SM-65 Atlas missile got flying.

  • Henry Vanderbilt

    Didn’t say “Dragon”. Said “F9 first reaching orbit.” The first flight carrying a Dragon was six months later, which may account for the difference – I recall $390m for F1 plus F9 to first F9 flight.

    If you look at http://www.parabolicarc.com/2015/01/26/richard-branson-funding-virgin-galactic/ , VG meanwhile seems to have burned through well north of $500m.

  • AstroMan

    Yeah, read the report again and the first flight of a Falcon 9 was COTS milestone 17, Demo Mission 1. At that point, SpaceX had been paid $328 million. The break-down is TacSat-1 pmt of $50 million, which paid for development of the Merlin engine, F1, and learning how to launch a rocket, and COTS milestone payments of $278 million through the first F9 launch. By COTS Demo Mission 2/3, total payments were $446 million.

    I’m shocked that VG has gone through that much money. Back in January I was told SS2 will not carry more than 2 paying customers due to engine performance at less planned levels. Any insight into that?

  • patb2009

    You have to be flyable to worry about test flights.

  • cdevboy

    I recall that the XCOR upper stage work is really centered on completing development of their Piston fuel pumped engine as opposed to using normal turbo pumps which are likely to fly apart if they fail. That is how and why they are unique and involved with ULA