LETTER TO WILLIAM J. CASEY FROM ALLEN E. PUCKETT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B00181R001701590005-3
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: March 29, 2012
• Sequence Number: 5
• Publication Date: June 5, 1986
• Content Type: LETTER

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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
Position Paper on US Launch Vehicle Policy
z--
Acting Director, Intelligence
Community staff
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building)
OFFICER'S
INITIALS
NO.
DCI/ICS 86-4338
COMMENTS (Number each comment to show from whom
to whom. Draw a line across column after each comment.)
PPS
FORM 610 U5E -REVIOU5
1.79 EDITIONS
3. For signature.
STAT
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IC STAFF
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SUSPENSE: Ti '
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REMARKS: 17 n /1
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Remorks
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Please prepare an appropriate response.
STAT
Ex eve Secretary
1 June 86
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C O `. ~. 2-L9 ?S IZ
L066ED
12 JUN 1986,
Subsidiary of GM Hughes Electronics
June 5, 1986
The Honorable William J. Casey
Director
Central Intelligence Agency
Washington, D.C. 20505
Dear Mr. Casey:'
Exemfi" arm
8 2566X
Over the last few weeks my colleagues and I have met with a number of
officials responsible for developing national policy on launch vehicles. We are
deeply concerned by proposals of some departments to deny use of the Space
Shuttle to commercial and foreign customers.
We believe that this would be a terrible mistake. It would injure the basic
communications industry on which this country and the world depend. It would
damage the U.S. international trade position. And, we believe it is unlikely to
achieve the goal of establishing a vigorous commercial launch vehicle industry in
the United States.
Working groups of the Economic Policy Council and the SIG (Space) are
addressing this issue. I am submitting the enclosed paper for your consideration in
this important debate.
Sincerely yours w
Allen E. Puckett
Chairman
Corporate Offices: 7200 Hughes Terrace
P.O. Box 45066, Los Angeles, CA 90045-0066
[phone]
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POSITION PAPER
U.S. LAUNCH VEHICLE POLICY
For fifteen years and under three Administrations, private satellite users have
been forced to move from alternative launchers to the Space Shuttle. As a result,
satellite builders like RCA and Hughes have invested well over $100 million to
design and qualify new families of spacecraft that would use the Shuttle most
efficiently. The old Atlas, Delta, and Titan launchers are now either too small,
too expensive or not powerful enough to launch such satellites. NASA progressively
raised the prices of the alternative Atlas and Delta vehicles and ultimately
terminated their production. Therefore, the European Ariane is currently the only
viable alternative to the Shuttle.
Reliance on a single launch vehicle in the United States has been a policy of
tragedy. Realizing this, the U.S. Air Force two years ago ordered ten large
Complementary Expendable Launch Vehicles (CELV's), derived from the Titan, to
provide backup capability. The Challenger crash validated the need for such
alternatives.
As a consequence of bad policies and bad luck, the U.S. must now deal
promptly with a serious short-term problem: A real shortage of launch capacity.
We must also address the long-term problem: The need for a reliable,
cost-effective, and complementary fleet of launch vehicles.
The Short Term
There will be shortage of launch capacity until the end of the decade. The
stand-down of the Shuttle fleet, the time needed for re-design, the reduction of the
fleet from four to three, and the necessary launch rate reduction have already
caused a backlog of satellites. In the short-run only a few measures are available
to mitigate the shortage: Corporate Offices 72CC rj;"es Terrace
PO Box 45066. Los Anoe!es CA 90045-0066
2'3.568-720C
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1) Commercial users whose satellites are compatible with Ariane can
shift to that vehicle; some already have.
2) The priority of national security launches should be reviewed to
insure that scarce launch resources are used efficiently.
3) Activation of the Vandenburg Air Force Base Shuttle facility should
be deferred indefinitely. It is possible to launch all Vandenburg
payloads with CELV's or by Shuttle from Florida. It is unwise to
dedicate one-third of the Shuttle fleet to Vandenburg operations,
and will cost an enormous sum each year to maintain such a
capability.
The Long Run
There are important jobs to be done in space - military, scientific, and
commercial. Those jobs require reliable and economical launchers. A desirable
fleet would include both the Shuttle and unmanned rockets compatible with Shuttle
payloads, so that they can back each other up. When the problems revealed by the
Challenger disaster are dealt with, the Shuttle likely will be much more reliable
than current ELV's. Certainly, developing a new generation of highly reliable
launchers that can deliver payloads to orbit at a competitive cost will require
major investments in new technology.
Arianespace leads the way to a low-cost Shuttle-compatible launcher with
Ariane V, now under development. This investment in new technology is being
made for Arianespace by the European Space Agency. No such project is underway
in the U.S. Although partially compatible with the Shuttle, the Air Force CELV
appears to be too large and too expensive to be commercially useful. Modifications
to Delta, Atlas and Titan may be sufficient to make them compatible physically
with satellites that will be built in the future. However, such modifications are
likely to cost $50 to $100 million for each launcher, and will not produce
economically competitive alternatives. Developing and testing a U.S. launcher that
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could becompetitive and that would achieve the needed reliability will cost hundreds
of millions of dollars. It will certainly take more than five years to become
operational.
Current Proposals
In the wake of the Challenger tragedy, some in the Government are
advocating a complete reversal of the "Shuttle-only" policy. They propose now to
deny completely the use of the Shuttle to commercial customers. Their proposal
apparently rests on two premises:
1) That intelligence and military needs will consume all of the
capacity of the Shuttle fleet.
2) That prospective U.S. commercial ELV manufacturers will not enter
the business if the Shuttle remains a potential competitor.
The first premise is surprising. Military payloads had been expected to take
about one-third of the shuttle's capacity. The reduction in near-term launch
capacity certainly is causing a backlog problem. However, the Defense Department
has bought CELV's, plans to buy more, and hopes to procure smaller rockets as
well. Furthermore, budget constraints will limit hoped-for military, SDI, and NASA
projects. If the government claims the entire fleet capacity, it is likely that it
will have more launch capacity than it needs in the early 1990's. Of course, a
decision to build a replacement for Challenger - which we support - would increase
the capacity available beyond 1990.
The second premise has been promoted by the companies which are
considering building ELV's on a commercial basis. Some in the government are
supporting this thesis. Let us ask, would the end of foreign and commercial use of
the Shuttle by itself be sufficient to bring into being a competitive U.S. ELV
industry? Unless accompanied by a major infusion of government-sponsored
development funding, it will simply produce a stillborn U.S. industry. It will be
difficult for a companyto be commercially successful for the following reasons:
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1) Arlanespace is an entrenched, efficient competitor that has good
technology, commercial skills honed during years of competition
with NASA, and technical support from a consortium of eleven
European governments;
2) Because of the years of U.S. neglect, major investments in ELV
development will be required to produce vehicles competitive with
the Ariane family. ELY development requires that a firm be able
to risk multi-million dollar failures;
3) Demand for commercial satellite launches is inherently
unpredictable. It is driven by the uncertain pace of developments
in_ satellite technology and by the willingness of companies to bear
major risks in bringing new services and applications to the market;
4) In the background, there are potential competitors in the U.S.S.R.,
China, and Japan, all of which have existing ELV programs and
have clearly indicated a desire to serve commercial markets.
How many companies will be willing to risk hundreds of millions of dollars to
enter such a market, even if competition from the Shuttle is foreclosed? If a U.S.
company does enter the business, its position as a competitor to the entrenched
Arianespace will be precarious. Because of Arianespace's advantages and its
relations with European governments, U.S. competitors will be the weaker parties.
If a U.S. company does not enter the business, then excluding commercial users
from the Shuttle will simply create a European monopoly in a business of
substantial importance to the United States.
International Competition
Even if the United States turns its commercial launch business over to the
private sector, the role of government policies in the launch programs of other
countries will predominate. At every turn, the U.S. firms will face competitors
backed by their governments with the political, economic, and technical resources
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of those governments. If the business of commercial space launches comes to be
dominated by other countries, the consequences for the United States will be
serious:
1) The U.S. will forego its position in an industry that otherwise faces a
promising future. Re-establishing a position later will be difficult, if not
impossible.
2) The U.S. satellite industry is now a successful foreign trade competitor
but will come under pressure to share design data required by foreign
launching organizations for interface design and insurance decisions.
3) Foreign satellite manufacturers will be able to offer tie-in sales of
launches and satellites as package deals (as U.S. firms now do), enabling
heretofore uncompetitive satellite manufacturers to challenge the U.S.
position.
Recommendations
Satellite owners and operators are part of the fundamental infrastructure
which provides the links tying together much of the world. The importance of
their role requires them to accept responsibility to provide reliable and continuous
service. To discharge that responsibility, they must be able to launch satellites
when needed. The proposals currently before the U.S. Government threaten their
ability to meet those responsibilities to the country and the rest of the world.
Therefore, we recommend that:
1) Government users should be realistic in exercising their claim to
first priority in the near term period when launch needs will
exceed supply;
2) The government should continue its previous policy on Shuttle
usage, rightly giving priority to defense and scientific uses, but
fulfilling its commercial commitments and serving all users to the
best of its ability;
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3) The government should move quickly to begin construction of an
orbiter to replace Challenger;
4) The government should move rapidly to develop a mixed fleet of
cost-effective, compatible ELVs to complement the Shuttle. This
will require a major investment in new technology and substantial
coordination between the Defense Department, civilian agencies,
and commercial users.
June 5, 1986
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r,,, ~
DCI/ICS 86-4338
19 JUN 1986
MEMORANDUM FOR: Director of Central Intelligence
VIA: Deputy Director of Central Intelligence
FROM:
Acting Director, Intelligence' Community Staff
SUBJECT: Position Paper on US Launch Vehicle Policy
1. The letter from Mr. Puckett represents the views of a well-informed
individual with strong reasons to prefer continued use of the Shuttle for
commercial launches. He is arguing against an extreme position, i.e.,
immediate discontinuance of the use of the Shuttle for these launches. The
current Administration position, however, is to phase-out this use of the
Shuttle. The EPC will be asked to develop a transition plan for accomplishing
this with consideration of the views of~~"the sate to manufacturing
industries, system and space users,....
2. The recommended response does not attempt to engage Mr. Puckett on the
issue. It simply thanks him for providing his views and encourages him to
continue advising us on this issue.
3. Recommend that you sign the attached letter to Mr. Allen Puckett.
Attachment:
Puckett letter
for DCI signature (U)
STAT
STAT
STAT
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SUBJECT: Position Paper on US Launch Vehicle Policy
DISTRIBUTION: (DCI/ICS 86-4338 w/att DCI/ICS 86-4337)
Original - DCI
1 - DDCI (ER file)
1 - D/ICS
1 - AD/PPS
1 - PPS Subject
1 - PPS Chrono
1 - IC Registry
DCI/ICS/PP (19 Jun 1986)
STAT
STAT
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The Director of Central Intelligence
23 June 1986
Mr. Allen E. Puckett
Chairman of the Board and Chief Executive Officer
Hughes Aircraft Company
7200 Hughes Terrace
P.O. Box 45066
Los Angeles, CA 90045-0066
Dear Mr. Puckett:
Your thoughts on the use of the Space Shuttle by commercial and foreign
customers are much appreciated. As you point out, this is a complex problem
that involves tradeoffs between competing interests. The Working Group of the
Economic Policy Council (EPC) is expected to begin consideration of this issue
in the near future. I am hopeful that they will develop a plan that
implements the President's goals with due consideration for the interests of
all, including the US satellite manufacturers and owner/operators.
I have sent a copy of your letter to my representative on the IG(Space)
and EPC working groups. I believe that he has met privately with both Dr. Bud
Wheelon and Dr. John Koehler of your company. He has also had an opportunity
to attend Department of Commerce sponsored industry presentations by Hughes
and other satellite manufacturing firms.
Let me assure you that those of us who are attempting to resolve this
difficult issue place high value on the views of concerned and knowledgeable
individuals such as yourself. Please feel free to continue informing us on
this issue.
Sincerely,
0
W1lll1 In J. Cas
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SUBJECT: Letter to Allen E. Puckett, Hughes Aircraft Company re
Position Paper on US Launch Vehicle Policy
DISTRIBUTION: (DCI/ICS 86-4337)
Original - Addressee (Puckett)
1 - DCI
1 - DDCI (ER file)
1 - D/ICS
1 - AD/PPS
1 - PPS Subject
1 - PPS Chrono
1 - IC Registry
DCI/ICS/PPS
(19 June 86)
STAT
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