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New space policies cheer aerospace industry

THE BALTIMORE SUN

New government efforts to refocus the space program are rippling through the aerospace industry.

Though they are brightening the prospects for makers of unmanned rockets, the evolving changes are clouding the future for building space shuttles and forcing a scaling back of other programs, such as a space station.

After years of confusion about the nation's space policies, industry executives are increasingly heartened by what they see as a more coherent and realistic approach by the administration and Congress to designing and financing space projects.

Much of the industry's optimism stems from a recent report by a committee appointed by the Bush administration to examine the space program.

The committee, which was headed by Norman R. Augustine, chairman of Martin Marietta Corp., strongly supported the continuation of both unmanned and manned space exploration, including a long-term goal of sending astronauts to Mars.

"We are quite pleased with the direction the Augustine commission has given to the space program," said Sam F. Iacobellis, co-chief operating officer at Rockwell International Corp., NASA's largest contractor.

"The fact that the program is getting focused is good, and elements of it are good for Rockwell."

Though some companies will be hurt as projects are scaled back or dropped, others will benefit. Either way, the effects loom large for companies such as Martin Marietta, McDonnell Douglas Corp., General Dynamics Corp. and Boeing Co., especially at a time when many of them are suffering from cutbacks in military spending.

Industry executives said they were particularly pleased by the administration's plan to seek another large increase in funds next year for the National Aeronautics and Space Administration.

The administration proposed spending $14.7 billion on the space program next year, an increase of 11.25 percent at a time when federal spending for most programs is being slashed.

They are also hopeful that a joint effort by NASA and the industry to redesign the space station to make it smaller and easier to build will give the troubled program a new impetus.

Members of Congress, NASA officials and industry executives said the Augustine committee's report, which was issued in December, will serve as the basis for their decisions on designing, financing and scheduling major programs for years to come.

"The report points out that present funding trends should be adequate to achieve some remarkable goals, including the ultimate dream set out by President Bush of building an infrastructure that will someday take humans to Mars," said Dr. Joseph P. Allen, a former astronaut who was a member of the Augustine committee.

But the committee also concluded that NASA "is trying to do too much and allowing too little margin for the unexpected."

The committee suggested that the agency scale back some of its plans and tailor program schedules to reflect more realistically how much money is available.

Specifically, the committee said that NASA should reduce its reliance on the space shuttle and that, for budget reasons, it probably should put off or eliminate buying any new shuttle orbiters.

The fifth and latest orbiter, the Endeavour, is expected to be completed this spring.

It is being built by Rockwell International at its plant in Palmdale, Calif., under a $1.5 billion contract.

Rockwell, the builder of all of the orbiters, has long hoped to build several more.

The committee said NASA should redirect available money to build a new unmanned rocket that could take over many of the space shuttle's tasks.

The large aerospace companies are certain to compete for any new unmanned-rocket contracts.

The program would build the first new unmanned heavy-lift booster designed in the United States since the 1960s and would mean billions of dollars in contracts for the winning companies.

The committee also endorsed plans to scale back significantly the size and complexity of the space station that is being developed by three teams of aerospace companies, led by Boeing, McDonnell Douglas and Rockwell.

NASA and its contractors are completing a sweeping redesign of the space station intended to bring its budget, which soared to as much as $30 billion, under control.

Committee members also said Congress should put a lower priority on financing the National Aero-Space Plane, which is designed to fly into orbit after taking off like an airplane from a conventional runway.

The plane is being developed under a joint NASA and Pentagon contract by a team of five contractors, led by Rockwell.

The committee supported an eventual mission to Mars, an undertaking that virtually every aerospace company hopes to be part of.

It also backed what it called "Mission to Planet Earth," a series of space flights to study the planet from orbit.

Companies including Lockheed Corp., which have expertise in building satellites that can be used to study weather and environmental changes, see a healthy business potential in such a project.

But uncertainties remain about the future of NASA programs, and they come as the nation's fledgling commercial space business is also stagnating.

The commercial space industry -- primarily those companies that are hired to launch satellites for other companies and governments -- is plagued by overcapacity and foreign competition.

McDonnell Douglas, General Dynamics and Martin Marietta are the main competitors in boosting large satellites into orbit.

Several smaller entrepreneurial companies, including Orbital Sciences Corp. of Fairfax, Va., are trying to carve out a business by launching smaller satellites, so far with limited success.

Aerospace companies continue to assume that the push into space holds a big payoff.

But that payoff keeps receding in the face of federal budget pressures, technological difficulties and the lack of a clear vision about what humans can and should do in space.

After building up their work forces in recent years for projects like the space station and their commercial launching businesses, several companies have announced cutbacks recently.

McDonnell Douglas, for example, laid off 300 people last month in its space division, after eliminating 400 jobs in the division last summer.

Still, aerospace industry executives have some cause to remain optimistic.

Political support for space programs remains relatively high, gauging by the money given to NASA by Congress.

NASA budgets have grown at a substantial rate in recent years -- the increase for the current fiscal year was 12.1 percent, to $13.9 billion -- at a time when many federal programs were being scaled back.

As a percentage of the total federal budget, spending on NASA fell from a peak of 3.85 percent in 1964 to a low of seven-tenths of 1 percent in 1985 before rebounding to the current level of 1.1 percent, NASA officials said.

One element that would not be good for Rockwell is the committee's recommendation against building a sixth shuttle orbiter any time soon.

The shuttle program is the flagship of Rockwell's space operations.

Rockwell executives said that even if the company did not get a contract for another new shuttle, it expected to have a healthy business modifying and updating the existing shuttle fleet for years to come.

Moreover, the company already has a contract to make spare parts for the fleet, which is expected to remain in use well into the next century as the nation's only manned launching system.

Rockwell executives are also quick to point out that any loss of business from the shuttle could be offset by new contracts to work on the proposed new unmanned rocket.

Rockwell's Rocketdyne division is the nation's largest manufacturer of liquid-fuel engines of the type used on large rockets.

One possibility for a new rocket is a proposed unmanned derivative of the shuttle system known as shuttle-C.

Another is a traditional rocket incorporating existing components as well as technology developed in a joint Air Force-NASA research program called the Advanced Launch System. The administration has proposed providing NASA and the Air Force with $175 million each next year to take the next step in developing a new rocket.

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