The post-Cold War world may prove a tough place for America's aerospace industry, with U.S. rocket manufacturers risking being left behind in the 21st century's commercial satellite market, a Hercules Inc. official warns.
Speaking to legislators about the company's future, Vice President Ronald Peterson said that until the mid-1980s, Hercules, fellow Utah aerospace giant Thiokol and a handful of other U.S. firms had the booster rocket business all but locked up.But things have changed dramatically overseas in the past few years. The Japanese, having already made successful challenges in automotive, electronic and computer markets, likely will move into the aerospace field.
And Germany, newly reunited, is expected to join the competition as well.
A united Germany "certainly will be a threat in the future" to America's virtual commercial aerospace monopoly, Peterson warned. "And, certainly, you cannot discount the Japanese. They will be a player."
In less than 10 years, aerospace will not be a strictly American endeavor.
"That's very, very rapidly changing and, if we want to be a competitor into the next century, we have to expect that (foreign) competition," Peterson said.
Hercules will have about $3 billion in total sales this year, and about $660 million of that will come from its Utah operations, primarily in Salt Lake and Davis counties.
Where it once depended almost solely on building solid-fuel rocket motors for the Minuteman, Poseidon, MX and other ballistic missiles, the company is moving into commercial booster rockets for sending satellites into orbit.
Hercules builds the nine strap-on boosters used to launch Delta 2 rockets and also is involved in a joint venture with Orbital Sciences Corp., of Fairfax, Va., in design and construction of the Pegasus, used to lift small satellites into orbit.
But the big commercial venture for Hercules involves a pair of seven-stage boosters it is building for the Titan 4.
The Titan will rocket payloads of up to 39,000 pounds into low-Earth orbit or satellites of up to 10,000 pounds into a high geosynchronous orbit. Delta 2s can carry satellites weighing up to 4,000 pounds into space and Pegasus a payload of up to 900 pounds.
For Hercules, it was a savvy move away from dependence on defense work to commercial aerospace business.
"Defense budgets indeed will be going down over the next decade. The spending is going to become less and less," Peterson said. "We didn't want to have all the eggs in one basket, so we've been getting more and more eggs into the space launch basket."
Nonetheless, the move into aerospace will not save Hercules from additional layoffs, said Thomas Gossage, the company's chairman and chief executive officer.
"To keep competitive in a rapidly changing marketplace, we're having to reduce our work force, both here and at our corporate headquarters in Wilmington, Del., where we're eliminating one in four positions," about 400 managers overall, said Gossage.
The Utah work force was trimmed last fall and in January by about 300 jobs, down to about 4,400. Another round of Utah cuts, of unspecified size, can be expected by summer.
Gossage said the layoffs should be considered more of a retooling of the company than an indication of decline. He pointed to Hercules' recent $300 million modernization at its Bacchus West operations in Magna as "a big bet on the future of this business and on the future of this state.
"Hercules and Utah have a good marriage. We've been together for about 78 years. I believe we have a contract for life," he added.