(Bloomberg) — Boeing Co. is weighing options for its Starliner operations as part of a wide-ranging review, raising the potential that it will end one of the most storied stories in American space exploration.
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While the assessment of whether to leave a key NASA program remains in the early stages, it marks the most concrete step yet by the US space shuttle to rethink its role in the commercial space business.
Boeing has remained the most prominent of the legacy aerospace manufacturers working with NASA as Elon Musk’s SpaceX has risen from a startup to the industry’s dominant force. A scaled-down Boeing — or one entirely absent from the industry — would leave the US government inextricably dependent on SpaceX for putting astronauts into space from US soil, at least until other companies enter the market.
“Having a resilient way to get astronauts to the space station is at risk,” Clayton Swope, deputy director of the Aerospace Security Project at the Center for Strategic and International Studies, said of Boeing’s review.
Boeing’s new Chief Executive Kelly Ortberg is evaluating the company’s portfolio to raise cash, shed underperforming units and save a company in crisis. The review of the Starliner program signals that Boeing could resolve or sell an operation marred by years of mistakes with more than $1.8 billion in cost overruns and delays.
Abandoning the Starliner would mean turning its back on a nearly 60-year lineage of America’s astronauts in space — from the iconic Saturn V rocket that took Neil Armstrong to the moon to the jet-like craft that flew the The International Space Station, which Boeing currently manages.
While the Starliner experienced numerous delays, SpaceX’s rival Crew Dragon capsule has made 43 visits to the ISS since 2019, carrying both crew and cargo for NASA. The agency recently hired SpaceX to rescue two Americans stranded on the space station after problems with the Starliner’s thruster forced the agency to order the vehicle back to Earth empty.
“Boeing was supposed to be the safe bet,” said Chad Anderson, Managing Partner of Space Capital and a SpaceX investor. “If they leave, it’s a sad thing for America, for competition and for access to space.”
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NASA and Boeing are still working together to resolve issues experienced during the company’s most recent test flight with the goal of eventually certifying the Starliner for regular crewed flights — unless something changes on Boeing’s side, according to a known person.
Boeing does not comment on rumors or market speculation, a spokesman said by email. A NASA spokesman declined to comment on Boeing’s review.
The Starliner overhaul comes amid a crippling, six-week labor strike that has idled production of key jets, including the cash cow 737 Max. The work stoppage is exacerbating Boeing’s strained finances, with its credit ratings on the brink of junk and worsening cash burn, which the company projects will last until 2025.
Ortberg said he wants to focus resources on Boeing’s core commercial and defense aircraft divisions and is looking to modernize its broad portfolio, with the goal of “doing less and doing it better.” He expects to decide which units will leave by the end of the year.
Even before news of Boeing’s possible exodus to space, which was first reported by the Wall Street Journal, the Starliner’s future was unclear beyond a plan for a half-dozen more missions to the space station for NASA- n.
Its costs will likely continue to rise, especially if NASA requires another test on the space station. The Starliner “may already be obsolete,” Agency Partners analyst Nick Cunningham told clients in a memo Wednesday, calling the vehicle a “disproportionate loss maker.”
Boeing and Lockheed Martin Corp. have been trying to sell their United Launch Alliance joint venture for the past year. Boeing’s space portfolio also includes a lucrative contract for NASA’s SLS moon rocket, although it is expected to cost about $2 billion per launch and SpaceX says it is working on cheaper alternatives. ISS is headed for retirement.
Boeing is not the only legacy space player suffering. Airbus SE plans to eliminate up to 2,500 positions in its defense and aerospace division, as the European planemaker seeks to streamline business amid tougher competition.
Boeing may decide to keep some or all of its space portfolio, which also includes defense products such as spy satellites and the X-37B stealth space plane.
However, in the last decade, Boeing has lagged behind the technological leaps made by SpaceX, which has reduced the cost of space travel by reusing boosters and building most components in-house.
Besides the prospect of relying on Russia if SpaceX suffers a failure, Anderson said there is risk to taxpayers and the industry at large if Boeing goes out of business.
“SpaceX is not going to cut prices on its own. Until you bring in more competition, nothing can challenge that,” he said. “Competition is good for everybody. More innovation, lower prices, more participation, more ideas.”
— With help from Julie Johnson.
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