NASA flies Lockheed Martin Defense contractor finds publicity, maybe profit in exploration


January 11, 1998|By Greg Schneider | Greg Schneider,SUN STAFF

You could pick your reason for inspiration at last Tuesday's launch of the Lunar Prospector space mission.

There was NASA sending its first craft to the moon in a generation, and the chest- filling beauty of the nighttime launch.

Or, for a certain type of onlooker, there was the knowledge that the whole affair could be summed up in one phrase: "Brought to you by Lockheed Martin."

The Bethesda-based aerospace megalith built both the probe and the Athena II rocket that lofted it. This is no surprise, because Lockheed Martin far surpasses Raytheon, TRW and Orbital Sciences as the single biggest commercial name in unmanned scientific space probes.

But from a business point of view, it raises a question.

"What's in it for us? I get asked that a lot," said Noel W. Hinners, vice president of flight systems for Lockheed Martin Astronautics in Denver.

Lunar Prospector cost about $63 million -- half a day's worth of work for a company that must generate an average of $100 million in new business every day to maintain its $36 billion annual revenue stream.

By contrast, a single Lockheed Martin-built F-22 fighter plane costs around $71 million. And the Air Force is buying 338 of them.

With today's cost-conscious NASA, price tags aren't going to get a whole lot bigger than Prospector's. The mantra now is Faster, Better, Cheaper.

Still, Lockheed Martin pursues the work even as it continues building more expensive military and communications satellite systems.

The company built and operates the Mars Global Surveyor that is orbiting the Red Planet. It also made the entry system, the air-bag landing system and the rover for the celebrated Mars Pathfinder mission of last July.

In fact, Mars is about to become a virtual Lockheed Martin colony. The company will crank out orbiters and landers for missions this year and in 2001, 2003 and 2005.

Lockheed Martin also is building a pair of Earth-observing satellites scheduled for launch later this year, as well as a space probe to test part of Einstein's theory of relativity, one to plumb the Sun's corona, an orbiting infrared telescope, a probe to gather solar wind and one to collect stardust.

"I'm having a lot of fun," said Hinners, whose primary responsibility is the big push to Mars. "But fun had better pay. We will make money on these Mars missions."

That's a boast, really, because Lockheed Martin profits from such missions only if it achieves NASA's goals. If the Global Surveyor suddenly stops sending back signals, Lockheed Martin doesn't get its fee.

On Lunar Prospector, the $63 million price breaks down roughly as follows, according to spokesman Buddy Nelson of Lockheed Martin Missiles & Space in Sunnyvale, Calif.: The probe cost $23 million to build; the Athena II rocket was another $23 million; operations, $2 million; the rocket engine that puts the craft in lunar orbit, $4 million; instruments, $4 million; miscellaneous, $2.5 million. That leaves about $4.5 million for the company's fee.

"I don't think they are making an abnormally low profit on the things," said John Pike of the Federation of American Scientists, who added that the markup on Prospector must be about the same as on a billion-dollar reconnaissance satellite. "I mean, NASA's money spends just as well as the National Reconnaissance Office's money, it just comes in smaller pieces," Pike said.

That's the key, though -- a corporation doesn't get as huge as Lockheed Martin by chasing "smaller pieces" of profit.

Hinners identified a pair of more important goals in the small space projects. One is that Lockheed Martin likes to be involved in missions that push frontiers and have high visiblity, he said.

The other reason is that the Faster, Better, Cheaper theme pushes the company to refine procedures and become more efficient. "Every morning you get up and say, 'Faster, Better, Cheaper. Faster, Better, Cheaper.' It's like the Little Engine that Could," Hinners said.

Systems have to work the first time, because there is no money for backups. Engineers must be innovative, for example, by using air bags to bounce the Pathfinder onto the surface of Mars.

Those trends then transfer to other areas of the company.

That's a process that appeals to Wall Street. "This is certainly an efficient way to learn a whole new methodology and a whole new discipline, and it's also a good way to basically allow fresh talent and young engineers to get hands-on experience that they will need as they progress through the Lockheed hierarchy," said Wolfgang Demisch of B.T. Securities.

The demise of the multibillion-dollar NASA extravaganza -- last year's launch of the $3.4 billion Cassini voyage to Saturn was the finale -- opens the door for missions that are almost disposable by comparison. That means spacecraft designers can take chances with technology -- a trend that experts say could breathe new life into the American space business.

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