Boeing Weighs Option of Selling Off Its Space Business
Boeing, Lockheed Martin have also been in talks to sell rocket-launch firm ULA to Sierra Space.
I recently reported that a Boeing-made satellite, Intelsat 33e, exploded in space this week following an “anomaly,” resulting in its total loss.
Add to the Starliner troubles, with its crew forced to stay at the International Space Station until February, and a strike by unhappy union members, 2024 has been a dreadful year for the firm’s iconic space business.
Now comes news that Boeing may be jettisoning space projects altogether.
The beleaguered company is exploring a sale of its storied NASA business, including the troubled Starliner space vehicle and operations that support the International Space Station, according to people familiar with the matter.
The effort, part of a strategy by Boeing’s new Chief Executive Officer Kelly Ortberg to streamline the company and stem its financial losses, is at an early stage and might not result in a deal.
Boeing faces a deepening financial crisis. Its largest labor union has rejected two contract proposals and extended a strike that has halted most of its airplane production. Meanwhile, Boeing’s space and defense projects have been hobbled by delays and cost overruns.
The move appears to be strategic, as resources can be directed to its core aerospace and defense sectors. This possible sale is sensible because the ISS, which uses Boeing-made equipment, is slated for retirement in 2030.
The aerospace company’s Starliner spacecraft has been hindered for years by development delays and technical problems, with more than $1.8 billion in private cost overruns.
…Boeing for decades has built and maintained modules of the International Space Station, which faces retirement in 2030 and replacement by privately owned space stations being considered by NASA.
Boeing is also grappling with a five-week strike by 33,000 workers at its civil planemaking arm, leading to a halt in production of its best-selling 737 MAX jets, and 767 and 777 widebodies.
The company’s new CEO, Kelly Ortberg, has sought to pull Boeing out of crises in its planemaking business. On a quarterly call with analysts on Wednesday, Ortberg said he wants Boeing “doing less and doing it better,” but did not mention the space unit.
Interestingly, Boeing and Lockheed Martin have recently been in talks to sell their rocket-launching joint venture, United Launch Alliance, to Sierra Space. The potential transaction could value ULA at approximately $2 billion to $3 billion.
A deal to sell ULA, a major provider of launch services to the U.S. government and a top rival to Elon Musk’s SpaceX, would mark a significant shift in the U.S. space launch industry as ULA separates from two of the largest defense contractors to a smaller, privately held firm.
The potential sale comes after years of speculation about ULA’s future and failed attempts to divest the joint venture over the past decade. In 2019, Boeing and Lockheed Martin reportedly explored selling ULA but couldn’t agree on terms with potential buyers.
The negotiations could end without a deal, the sources said.
ULA referred Reuters to Boeing and Lockheed for comment. The two companies said they do not comment on market speculation. Sierra did not immediately return a request for comment.
If the sale goes through, it will expand Sierra Spaces’ capabilities and accelerate its crewed launch program.
Sierra Space, spun off from Sierra Nevada Corp in 2021, is evaluating the acquisition of ULA as part of its broader ambitions, which include advancing its Dream Chaser spaceplane and developing a private space station in collaboration with Blue Origin. A successful acquisition would enable Sierra Space to internally manage launches for its projects, potentially accelerating its crewed spaceflight initiatives.
Robust competition can really help move this country along in the Space Race. Here’s hoping for the best possible outcomes when and if these deals go through.
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Boeing should have at least been put on the Federal No Contracts list and blacklisted by everyone in the manufacturing and airline industry after they knowingly and deliberately produced a plane that was unfit for purpose that went on to kill 456 people in two crashes. After that debacle there was no real reason to allow Boeing to stay in business. But here we are and there we go.
They have gigantic problems and people need to be held criminally responsible. But, Boeing has to be fixed. The US can’t be in a position of dependency for commercial passenger/cargo/special purpose aircraft manufacturing. One of Boeing’s problems is that it forgot what its core missions and competencies were. As they looked to the stars, their aviation business floundered, decayed. Fixing the company is going to require a Herculean effort. But, failure isn’t an option.
>>But, failure isn’t an option.<<
Boeing has already failed. Their record of failures are pretty obvious at this point.
Boeing no longer has the knowledge, expertise, or experience any longer to manufacture safe products that are fit for purpose. And there is no way they can easily regain that if they could do it at all.
There is no such thing as a business that is “too big to fail”. It’s simply time face reality, shutter Boeing, sell it off to the highest bidder, and be done with it.
It’s not that Boeing is ‘too big to fail.’ The problem is Boeing is too ALONE to fail. Unless you want US airlines (and the Department of Defense) to only buy planes made in Europe…or China, then Boeing has to be fixed.
While the consequence is very true, the fix needs to be more competition, not necessarily saving Boeing. Of course, until you can get that competition going, you still need Boeing….
I agree with GWB. More competition is needed. It would be grand to see Lockheed Martin and/or Northup Grumman get into the civilian aircraft production business in a competitive scale with Boeing and Airbus
The problem is because of the way that industry is structured – HEAVILY regulated with competition that is largely underwritten by the European Union (Airbus) – it’s likely not possible for anyone to enter the market. Boeing is (or was) able to make it work because their experience and economies of scale made it possible for them to be competitive even against an manufacturer that is effectively a state industry. It’s unlikely – nearing virtual certainty – that it’s just not possible for a new US startup to enter the market and be competitive.
I would be surprised of Sierra Space had the capital to buy it outright. But, they’ve already partnered with Bezos’ Blue Origin on something else. Maybe they would again on this. Bezos seems like he really wants a piece of the glory Musk has enjoyed.
Sierra Space is the company that is trying to create what is essentially a baby Space Shuttle. It’s still a LONG way from its first flight. It kinda feels like it’s one vaporware company buying another vaporware company considering Boeing’s 1st operational mission was a gigantic flop. Reusable, reliable and less expensive manned, LEO missions are a lot harder than they might seem on paper, which makes SpaceX’s success all that more impressive.
Boeing’s gambit will save their company only if they transfer all the DEI deadwood to the space division before selling it. But then they’ll have a hard time selling it. On the other hand, somebody like Sierra Space might then be able to afford it at the proper price.
You could hand Boeing a license, a machine, a factory to literally print money and they would screw it up.
The problem isn’t that the Space Bus can’t be profitable, it’s that BOEING can’t make it profitable.
Check the ratio of that 10% layoff and how many of those end up being managers. If a third to a half of that ends up being mgrs and the mgr pool is DEI, then you know they are serious. They have layer upon layer of useless management. Not all of the useless ones are DEI, and not all of the DEI are useless, but it’s pretty obvious that putting their thumbs on the skin color and gender scale have been to their detriment.
Intel has the same problem to be honest.
I think President Xi may be interested. Hunter and the Big Guy may be able to help.
Thanks to a tip from Nancy Pelosi (D – Insidertrading), I sold off all my Boeing stock 2 years ago, so big B can blow up whatever it wants.
However, I do hope those starliner astronauts make it home safe.
Hey, Musk. How about that SpaceX IPO?
Following Paul Pelosi’s trades is the closest thing the average joe can get to insider info.
I’d love to know what impact Boeing’s huge “investment” in DEI has had on their product quality problems.
break the unions america returns to greatness
keep the unions and we continue down the path of socialism>>>communism
with the governments role becoming even larger
The problem isn’t the freedom of the workers to form unions.
The problem is the meddling federal laws criminalizing management’s liberty to tell the unions to be reasonable or they will be replaced by new workers who want those jobs more desperately.
This is what happens when DEI becomes more important than core business competencies.
Problem is that anyone with the bucks to buy it* will be the exact same sort of military contractor company or huge firm run by MBAs. So, selling it won’t actually allow it to be any better than it currently is.
(* Yes, Musk would have the money, but they wouldn’t let him buy it for anti-trust purposes (and rightly so). I doubt he would want it, since it would bring all the bad company culture into his company, and that wouldn’t be good.)
Granting that the ISS is set to retire in a few years. However it has to last that long. Today I saw in the news
https://www.dailymail.co.uk/sciencetech/article-14010229/Astronauts-ISS-urgent-evacuation-NASA.html
that there are 50 “areas of concern” involving atmospheric leak(s) in the Russian made module, that the crew has been told to be ready for an emergency evacuation, and that they are keeping the Russian module sealed off from the rest of the station except when access is necessary. Granting the problem is in the Russian module, if the ISS goes Tango Uniform, it will reduce the selling price of the Boeing Company’s space business considerably.
Subotai Bahadur