SpaceX may have a $2.9 billion contract with NASA, but the CEO, Elon Musk, is scared the space company may go bankrupt. His solution? Employees should forfeit their holiday and join him at work!
One of the fastest rising companies globally, or out of the world, is SpaceX, a privately owned company that routinely gets contracts from NASA. It also sends its own satellites to orbit and satellites from competing companies as well.
The company is also rapidly developing a new spacecraft, the Starship, the tallest and most powerful rocket ever. NASA is involved, as the space agency is paying SpaceX almost $3 billion to use the Starship to land astronauts on the moon’s surface when it resumes regular missions to the satellite.
However, not all is well at SpaceX, at least not financially. According to the CEO, the company might go bankrupt. The financial disaster is waiting if the company cannot get the Starship to commence flights next year. To make matters worse, just starting flights won’t save the company as SpaceX has to sustain a high flight rate to prevent insolvency.
SpaceX has been developing and testing the Starship at its Boca Chica facility in Texas, US, known as Starbase. Musk plans to use the Starship to transport volunteers to Mars to live there permanently. The world’s richest man believes going interplanetary is the only way to preserve humankind when a cosmic disaster strikes the earth.
Musk identified the culprit of SpaceX’s troubles; the Raptor rocket engines his company has been working on for years. The new rocket engines, developed in-house, will power the Starship, fully reusable in both the lower and upper stages. SpaceX chose an uncommon design and fuel, using a combination of methane and oxygen.
According to an email Musk sent to his employees, the problem with the Raptor rocket engines began to surface after some top employees left the company. It was then that SpaceX realized there was a serious problem with the development.
Musk was prepared to work through the weekend, although he had wanted to take it off, something he rarely did. He urged his employees who did not have urgent reasons to stay away to return to work to fix the problem with the rocket engines.
Even within the company, there is a lot at stake, according to Musk. SpaceX is expanding its satellite internet business, Starlink, hopefully coming out of public trial this year. SpaceX wants to launch about 12,000 satellites to provide worldwide coverage. It already has more than 1,800 in orbit, consisting of Version 1 or V1. Version 2 contains improved tech that uses lasers to communicate with one another.
However, according to Musk, the V2 satellites are much bigger, and no existing rocket in SpaceX’s stable can send them to orbit. Only the Starship is powerful enough for the job, which is one of the reasons why Musk is anxious to get it ready. SpaceX is ready with a new dish or terminal for customers, but they will be pretty much useless without the V2 Starlink satellites.
In a twist in the bankruptcy claim, Musk tweeted that the bankruptcy is unlikely but not impossible. He explained that all that is needed for it to happen is a global recession.
The entire content of Musk’s email is reproduced below:
“Unfortunately, the Raptor production crisis is much worse than it seemed a few weeks ago. As we have dug into the issues following exiting prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this.
I was going to take this weekend off, as my first weekend off in a long time, but instead I will be on the Raptor line all night and through the weekend.
Unless you have critical family matters or cannot physically return to Hawthorne, we need all hands on deck to recover from what is, quite frankly, a disaster.
The consequences for SpaceX if we can’t get enough reliable Raptors made is that we then can’t fly Starship, which means we then can’t fly Starlink Satellite V2 (Falcon has neither the volume *nor* the mass to orbit needed for satellite V2). Satellite V1 by itself is financially weak, whereas V2 is strong.
In addition, we are spooling up terminal production to several million units per year, which will consume massive capital, assuming that satellite V2 will be on orbit to handle the bandwidth demand. These terminals will be useless otherwise.
What it comes down to is that we face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year.