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Russia, the Space-Race Tortoise, Rockets Ahead

Mir may still be in trouble. But one joint Russian launch venture already has an order backlog of $3 billion

To anyone watching, the beleaguered Mir space station seems a galactic metaphor for what's happening to the Russian space program here on Earth.

Mir has been beset by breakdowns that have delayed its repair since an unmanned cargo ship rammed it a month ago. And the Russian space program has over the past year suffered serious mishaps that have raised international doubts about the country's ability to continue as a space power.

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But Mir and its woes are only part of the complicated evolution of Russian aerospace since the end of the Soviet Union and the cold-war space race. Badly underfunded government projects are indeed suffering. But Russian aerospace's commercial efforts are booming.

Several Russian aerospace companies, among them those that built Mir more than a decade ago, have created joint-venture businesses with their Western counterparts that are successfully tapping the great worldwide demand for launching communications satellites. The Westerners provide investment and badly needed expertise in marketing and sales. But what sells is Russian technology, a market trend that could stand on its ear the layman's stereotype about the obsolescence of Russian aerospace.

"We saw that Russia had a world-class product," says Mel Brashears, president of space and strategic missiles at Lockheed Martin Corp., Bethesda, Md., about the Russian Proton rocket. "We realized that together we could do a great deal we couldn't do separately."

Lockheed's enthusiasm has led to several projects with Russian aerospace concerns. But its flagship joint venture is International Launch Services (ILS), which it started in 1995 with the Khrunichev State Research and Production Space Center, its main Moscow-based partner, and the Russian Space Complex Energiya. Headquartered in San Diego, ILS markets Khrunichev's Proton rocket as well as Lockheed's own Atlas rocket for use in commercial satellite launches.

ILS has already launched four Protons from Kazakstan, two in the last six weeks carrying US satellites. ILS has a backlog of $3 billion in launch orders that stretches past the year 2000. The company expects nothing short of $1 billion in annual revenues over the next few years.

"When you think of all the foreign investment projects, like those in oil, for example, that are supposed to bring in money but haven't so far," says Charles Lloyd, president of ILS, "ours really stands out because hundreds of millions of dollars have already gone back to Russia."

ILS may soon get competition from Sea-Launch, a joint venture involving Seattle-based Boeing Co., Norwegian shipbuilder Kvaerner AS, Ukraine's Yuzhnoye rocketmaker, and Energiya, which designed the rockets and modules of the Soviet space program. Based on an Energiya idea, Sea-Launch envisions launches using Russian- and Ukrianian-made Zenit rockets from a movable platform in the ocean. The first launches are scheduled for late 1998.

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Aerospace concerns realized perhaps earlier than other Russian industrial giants that, without a foreign partner, they were doomed. Government cuts in defense and aerospace spending started in the late 1980s and deepened with the fall of the Soviet Union. "We knew we had to go out on the world market," says Sergei Zhiltsov, a spokesman for Khrunichev.

"But after 75 years in a closed economy, we had no idea of what a market was and even a competitor," he adds.

American companies such as Lockheed began courting Russian aerospace as soon as the Soviet Union fell apart. At the same time, the Russian and American governments realized that unless aerospace here received financial help, talented but poorly paid scientists might sell their expertise to rogue nations such as Libya. Agreements between the two governments "laid out the political and technical ground rules," says Mr. Lloyd. "It helped us deal with certain bureaucracies that thought they still had control over Russian aerospace." Russian aerospace concerns are still government-owned, though individually run.

Russia did fall behind the US in certain aerospace developments, most notably satellite technology, but its rocket technology was competitive with or even surpassed the West's.

Proton's liquid-fuel engine burns cleaner than solid-fuel rockets commonly used in the West. The rocket, according to Lockheed, also has the best record for reliability in its class of large vehicles. It's a bigger rocket than Lockheed's Atlas so it can carry heavier satellites.

Lockheed is now turning to the Russian concern NPO Energomash and its US partner, East Hartford, Conn.-based Pratt & Whitney, for help in upgrading Atlas. At the Paris Air Show this year, Lockheed signed a $1 billion contract with Energomash for the latter to provide it with 101 RD-180 rocket engines over the next decade.

Lockheed, Pratt & Whitney, and Energomash are also using the Atlas outfitted with an RD-180 engine as the basis for a bid on a highly-lucrative US Air Force launch contract. In a tender that's come down to Lockheed versus Boeing, with a decision expected next year, the US Air Force is trying to pick one rocket for all government launches.

If the Atlas wins, Energomash would get the financing to take its engine technology beyond the Soviet legacy. "From what we get now, we can move forward," says Boris Katorgin, the company's president, "and our dream is make a rocket better than any other in the world, one that will bring a satellite safely down to Earth."

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