Two companies that make rockets in Utah told Congress Thursday that U.S. approval of satellite deals with China is hurting them - and America's defense and commerce.
Officials from Thiokol and Alliant Techsystems (formerly Hercules) told the House Science Committee that China is seeking to undercut U.S. aerospace with cut-rate, government-subsidized commercial launch prices - and America seems to be helping it."That's what absolutely astonishes us," said Paul A. Ross, Alliant's group vice president for space and strategic systems. "We would experience a loss of our strategic capability."
That comes amid controversy where Republicans say President Clinton approved transfer of satellites for Chinese launch (with related technology) by the Hughes and Loral corporations that they contend could improve Chinese missiles aimed at America.
That happened, GOP leaders say, after money from China made its way improperly into Clinton's 1996 campaign.
Alliant and Thiokol said when U.S. satellites are launched on Chinese rockets, it helps China improve its systems by giving it more experience and consultation with U.S. scientists - and takes away resources that competing U.S. companies need to survive.
"The Chinese launch vehicle industry has demonstrated a willingness to substantially undercut the U.S. domestic launch vehicle industry pricing," Ross said.
China can do that because of its heavy government subsidies for its commercial rockets, which U.S. companies do not have, said Oren B. Phillips, Thiokol Propulsion's vice president for business development.
Phillips said, "Since their launch vehicle business is government-controlled, every dollar of profit is one less dollar they would have to spend on their defense program" on closely related missiles.
But in America, he said, the opposite is true. Private companies that make U.S. missiles are now staying alive amid defense cuts by depending on commercial launch revenue - which now provides 80 percent of their business.
Phillips said that if the U.S. commercial launch business dwindles, it hurts America's ability to produce reliable defense missiles.
Ross agreed, saying, "A loss of satellite launch business to foreign competition diminishes companies that support the U.S. strategic deterrent, while at the same time subsidizing the development of a foreign capability."
Phillips also said low labor costs in China, Russia and Ukraine make it difficult for U.S. companies to compete.
"With their current labor costs at a tenth of those in the U.S., there is no way to directly compete with them, no matter how good our technology is, how efficient our production processes are, or how low-cost our new paper vehicles could be," he said.
Phillips said no easy solutions are available.
"Imposing additional launch quotas may be politically impossible and economically unwise as well. At the same time, dropping all quotas could be disastrous to the U.S. launch industry and our national defense capability," he said.
"A balance between the two is needed," he said.