NASA and Utah rocket maker Morton Thiokol are rescuing an ailing fiber plant to ensure rayon fibers needed in America's space program are available.
An agreement with the National Aeronautics and Space Administration, Morton Thiokol and Avtex Fibers-Front Royal allows the government to get the process, technology and license for the rayon fiber in exchange for $18 million in guaranteed contracts, said NASA spokesman Ed Medal."The purchase is through Morton Thiokol but it ultimately will be borne by NASA through the solid rocket motor contract," Medal said.
It is believed the first time NASA has negotiated a financial package to keep a sole-source supplier in business.
Avtex officials have refused to return phone calls from the press, and public relations agents will refer only to a dated press release in dealing with queries about the transaction.
"They were given $7 million, and there will be an additional $11 million on Nov. 18, based on the progress that Avtex makes in completing whatever its endeavors are with other organizations," Medal said in a telephone interview.
"There is certainly some risk involved with with this approach. We've agreed for $18 million; with the $7 million, we receive information on Avtex's company and processes for the fibers.
"If they were unable to meet their obligations, we would be able to have this information and the license that would allow the agency to qualify another source," he said.
Avtex must show it can obtain other contracts to become solvent before NASA will fork over the funds for 1.1 million pounds of fiber. NASA buys just 5 percent of Avtex's products for the space program.
"There's a risk. There's a greater risk we feel in the potential impact on the shuttle cost if we didn't act now and try to assist Avtex," Medal said.
Avtex is the only supplier of rayon fibers that are wrapped, coated and placed inside solid rocket booster nozzles used in the space and defense programs.
A meeting last week in Salt Lake City brought aerospace officials together to hammer out a plan to keep Avtex alive. The company announced Oct. 31 its Front Royal, Va., plant was closing Nov. 3.
The company, in announcing the closure that left 1,300 people without jobs, cited cheaper foreign imports of the raw materials used for making rayon. Avtex also has a history of noncompliance with Virginia's worker safety and environmental regulations.
"I don't look at it as a bailout, because every time we give them something, they give us something in return," said J.R. Thompson, director of NASA's Marshall Space Flight Center in Huntsville, Ala. "We're not in the bailout business."
A German firm and a British firm also produce the fibers, using South African wood pulp in the rayon recipe. But industry officials said the quality assurance of foreign-produced rayon fibers was unknown.
"The success of this total endeavor is going to require other users (Avtex) is working with to join in this effort," said Medal.
"If you look at it, that cost we feel is well worth the risk," he said. "It's required for the space shuttle and we feel it's well worth the risk when you look at the potential (impact) on the shuttle down the road."