The new space race; L3 buys underwater drone firm; Satellite export deals stalled; Space socks; and more.

When the annual National Space Symposium clashed with the Navy League’s Sea-Air-Space conference, defense reporters had a choice: Colorado for space or DC for ships? With my colleagues booked for the Navy show (one moderated the vice chiefs panel, another led a conversation with cyber admirals), I headed for the space symposium, and the chance to cover a new space race.

Commercial firms are disrupting the military sector, offering launch, satellites, and services at lower costs than traditional players. No matter who wins the bruising battles between military and commercial firms, taxpayer are poised to benefit as competition drives down the cost of placing satellites in orbit. And the battles need not be fatal to either side; in an era in which military endeavors are ever more dependent on space operations, there may be more than enough work to go around.

Signs of the times were evident just walking up to the convention center at the posh Broadmoor hotel in Colorado Springs. Right in front of the entrance stood one of Jeff Bezos’ self-landing Blue Origin rockets, proudly bearing the scars of a successful round trip. Next to it sat a small crew capsule that will bring regular people, with deep pockets, into space. Employees — sporting bright blue shirts embossed with the Blue Origin logo — excitedly talked about how their pioneering technology would open space travel to the masses.

Inside, the defense giants roared their continued relevance. Across the front row of the exhibit hall, the elaborate exhibits of Boeing, Lockheed Martin, Harris, and Northrop Grumman crowed about the space race to Mars and building a transportation network in space.

“It’s not the work of a single company,” said Tory Bruno, president and CEO of United Launch Alliance, the Boeing-Lockheed Martin joint venture that is building a new rocket called Vulcan. “It will take a community of companies, of entrepreneurs and space professionals to bring that to bear.”

Bruno mentioned an untapped $3 trillion “cislunar” economy that could exist between the Earth and the Moon.

If defense industry officials describe the future as exciting and bright, they’re also reacting to a few recent less-than-lustrous years. Budget cuts and spending caps have taken a toll on the industry, executives say, but the money is starting to come back.

The wild card is how the Air Force will address what it now considers a war domain, just like the air, land and sea. In recent years, service leaders have called for more resilience — that is, ways to protect its satellites from attack. Down on Earth, the military has been using electronic warfare to protect its aircraft, ships, and other types of weapons.

“Space-control capabilities should be considered to ensure survivable and resilient space operations necessary for the execution of war plans and the defense of our allies,” Deputy Defense Secretary Bob Work said told about 200 military and industry reps in a classified session, according to a readout provided by a Pentagon spokeswoman.

The military is essentially looking to put electronic warfare in space, said Bill Gattle, president of Harris Space and Intelligence Systems. He expects military space spending to flatten over the next year to 18 months while defense leaders put a plan in place to better protect space assets.

And that’s on top of a slow few years.

“Across the board, you’re seeing a weakness in the industrial base right now,” he said, blaming a dearth of military space programs in recent years. “We’re not seeing as many new starts as we would hope.”

While some business is coming back, it’s “not like it used to be,” Gattle said.

But that could all change soon.

Welcome!

You’ve reached the Defense One Global Business Brief by Marcus Weisgerber, coming to you this week aboard a United Airlines Boeing 757 at 35,000 feet somewhere over middle America. Special thanks to Caroline Houck and the rest of the Defense One team for being my eyes and ears at Sea-Air-Space. As always, your tips, comments, and random thoughts are welcome at mweisgerber@defenseone.com or on Twitter @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!

From Defense One

Elon Musk's Reusable Rocket Just Changed The Space Game // Tim Fernholz

The successful test flight of a used rocket is a milestone in the effort to drastically lower the cost of putting a satellite in orbit.

The US Air Force Is Reorganizing to Fight in Space // Marcus Weisgerber

After a scathing report, service leaders are creating a three-star czar to oversee orbital warfare.

Boeing Launches Info War on the Navy's F-35 // Marcus Weisgerber

The aerospace firm is quietly urging policymakers to cut planned purchases of carrier-based Joint Strike Fighters and buy Advanced Super Hornets instead.

L3 Acquires OceanServer

Undersea drones are hot business. Just weeks before the Sea-Air-Space conference, L3 Technologies acquired underwater drone maker OceanServer, who’s been working with the U.S. Navy on a small scale for a decade, and, more recently, several NATO navies. The acquisition better positions to the firm to compete for military and commercial deals in a booming market.

OceanServer’s primary drone is Iver, a lightweight unmanned underwater vehicles, or UUV, that conducts physical and chemical surveys of seafloors and near-coastal areas.

It’s been used for everything from mapping the reservoirs of the Iraqi countryside near the start of the war to surveying a water’s algae balance to identifying unexploded munitions off the coast of Alaska. Now add some L3-made sensors into the mix and that opens up more potential missions, OceanServer’s president Bob Anderson told Defense One’s Caroline Houck at Sea-Air-Space.

“L3 has a lot of sensor technology, so they’re already touching all of these applications,” he said. “They own subsidy networks, and they have expertise on putting things on ships — from battery safety to all the different communications and sensors ... That’s the larger story: We’re taking this platform, along with expertise that already exists in L3, and satisfying growing Navy needs.”

As those Navy needs grow, you’re seeing defense firms position themselves for future business. In addition to L3 buying OceanServer, Boeing bought Liquid Robotics and General Dynamics bought Bluefin Robotics. Both of those deals were inked last year.

Why’d L3 join the game? Michael Strianese, the firm’s chairman and CEO, said the acquisition will help them in areas where they see “compelling opportunity.”  

That could be a commercial opportunity — as there’s little practical difference between configuring the drone to detect mines or potential obstacles for dredging or coastal construction — or military one. One future hint:

“We have some other ongoing activities that are submarine-related, where there is a [operational concept] in development and we’re building a vehicle for a future application,” Anderson said.

A Rush to Hire Space Professionals

With the increased military and commercial space race, companies are scrambling to bolster their workforce. At the Space Symposium there was even a “New Generation Space Leaders” speaker track.

Companies are scooping up young engineers right now, making sure they have the talent in place to create rockets and spaceplanes that will carry humans into space in the decades to come.

Bill Gattle, the Harris executive, described the space workforce as being a “double hump,” a reference to a line on a graph depicting the size of the workforce Y-axis and its age on the X-axis. There are lots of young people on the far left and lots of workers nearing retirement on the far right. Then there’s trough in the middle, the result of engineers fleeing the aerospace sector during the 1990s dotcom boom.

“We’re hiring like mad,” he said. Harris’ space business hired about 1,500 people in the past 18 months.

Stalled Export-Import Bank Hampers Boeing Satellite Deals

That news was delivered at the Space Symposium by Leanne Caret, the CEO of Boeing Defense, Space & Security, on Tuesday. Nicknames Ex-Im, the bank finances foreign purchases of American goods over $10 million. So if your company builds expensive jetliners, Ex-Im helps land deals with foreign airlines. But the bank does not have enough presidentially appointed board members to operate. That means the bank can’t approve deals, much to the frustration of companies looking to sell overseas.

“Without a quorum, the bank cannot finance the deals that underlie technological progress,” Caret said. “Several Boeing satellite deals have been lost or delayed as a result of Ex-Im being closed to our customers.”

Advocates for the bank say more $30 billion in deals are being held up because the bank cannot finance the sales.

“For American satellite manufacturers, whether it be Boeing or others, and for many of our customers around the world, the effective shuttering of the U.S. Export-Import Bank has been a source of uncertainty and frustration for far too long,” Caret said.

Critics say the bank amounts to nothing more than a government subsidy for firms like Boeing. There were rumblings that President Tump might announce his support for the bank during a February visit to a Boeing airplane factory in South Carolina. That didn’t happen and the for Boeing, the Ex-Im waiting game continues.

Making Moves

Spotted at the Space Symposium: Jamie Morin, the recently departed director of the Pentagon’s Cost Assessment and Program Evaluation office and one-time Air Force comptroller. Morin was recently named vice president and executive director of the Center for Space Policy and Strategy at The Aerospace Corporation, an Air Force federally funded research and development center.

Best Swag

The preponderance of private companies at the Space Symposium means, among other things, that the giveaway items tend to be more elaborate than at defense-heavy shows. When I worked at Inside the Air Force, I covered a trashcan in stickers from military programs and air wings. This week, United Launch Alliance gave out socks with the logo of its Vulcan rocket. Kudos to Aviation Week’s Lara Seligman for snagging a pair.