Failed SpaceX launch puts billionaire Elon Musk company in a bind. His low ball bid was filled with delays on its way to flopping completely, Pentagon had already approved more US gov. contracts for SpaceX-Wall St. Journal

6/29/15, "Launch Failure Leaves SpaceX in a Longer-Term Bind," Wall St. Journal, Andy Pasztor

"Sunday’s failed Falcon 9 rocket launch poses more significant, longer-term business challenges for billionaire space entrepreneur Elon Musk’s company than simply identifying and fixing the underlying problem. 

Closely held Space Exploration Technology Corp. must convince commercial customers of the booster’s reliability—something that wasn’t such a pressing issue before—even as it juggles launch manifests and seeks to sharply ramp up its launch tempo as promised.

SpaceX, as the company is known, prides itself on engineering prowess, quick decisions and being nimble in solving launch problems. “I’m sure we’ll find [the cause] rapidly” and resume normal launch operations within a year, President and Chief Operating Officer Gwynne Shotwell was telling reporters within hours of Sunday’s mishap.

On Monday, company officials said the rocket’s second stage malfunctioned and investigators were examining some 3,000 different data sources, but they didn’t elaborate. They also said it was too early to predict the impact on future launches.

With a roughly $7 billion backlog of government, corporate and scientific launches, SpaceX management was fending off complaints from some commercial-satellite operators about launch delays long before Sunday. The operators like SpaceX’s price of $60 million or less to launch a big satellite into high-earth orbit, significantly below prices charged by U.S. and European rivals. But industry business plans depend on launch predictability above everything else.

Even if the Southern California company resolves the technical issues by the end of the year—as many industry officials predict—the pressures on its schedule are bound to increase.

“A lot of these companies already have been backed up for a year or more” because of previous SpaceX schedule slips, according to consultant George Torres, a former satellite and rocket industry official who has written books about space.

SpaceX already has undergone some personnel shakeups, including a succession of press officials over the years and last month’s abrupt departure of Barry Matsumori, its de facto top salesman. 

On Monday, Mr. Matsumori said he left for personal reasons, and not over any clash with Mr. Musk or other executives. “There are no issues between me and SpaceX,” he said. 

“SpaceX and Barry parted amicably,” a company official said.

The launch failure’s impact on anticipated Pentagon and National Aeronautics and Space Administration launches will be hard to gauge for at least several weeks. 

A NASA competition to award the next phase of contracts to deliver cargo to the international space station was set be decided this summer, but industry officials said it may be pushed back. 

Meanwhile, congressional panels are preparing to hold hearings on incident, and Pentagon officials may reassess the impact of their recent green light for SpaceX to begin launching military and spy satellites. 

The botched launch, according to industry officials, is bound to complicate and could delay other important initiatives that had been gaining momentum. The initial test flight of the heavy-lift version of the Falcon rocket, postponed from its original 2013 date and more recently delayed from a revised 2015 schedule, could slip further, these officials said.

More broadly, Mr. Torres, like many industry and U.S. government space veterans, views Sunday’s mishap as underscoring the inherent dangers of space transportation.

Largely because SpaceX’s Falcon 9 rocket racked up a perfect record of 18 consecutive successful launches before Sunday, including demonstration flights, the company developed an aura of invincibility among many investors, industry analysts and the media. The traditional learning curve for new rockets, generally described as an average of one failure in the first three launches, didn’t seem to apply to Mr. Musk, the company’s chairman, founder and lead designer, or his cadre of young engineers.

Yet in the wake of Sunday’s rocket explosion, which occurred slightly more than two minutes after liftoff, perhaps “a sense of reality is setting in that this is not just a videogame,” according to Mr. Torres

Federal officials echoed those sentiments immediately after the mishap, with William Gerstenmaier, NASA’s top manned exploration official, telling reporters he and his staff always expected to lose some vehicles as part of the agency’s initiative to use unmanned commercial rockets and cargo capsules to supply the space station."



 
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