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TUESDAY, DECEMBER 5, 2006
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EDITORIAL

ULA more significant than numbers suggest

Competitors may not like monopolies, but there's nothing better than having one in your town.

The United Launch Alliance began operations Friday. It is a merger of the Evolved Expendable Launch Vehicle programs of Boeing Co. and Lockheed Martin Corp. Essentially every government satellite uses the expensive but reliable EELV, as do many private companies launching particularly expensive satellites.

Friday's announcement finalized Decatur's central place in it. The Boeing plant on Red Hat Road is ULA's sole production facility, but at first blush seems disappointing. ULA officials projected the joint venture would employ 100 new employees at the plant.

Now 100 good jobs are nothing to sneeze at, but the number was lower than many projected. Why all the bluster for 100 jobs?

There are two compelling reasons for the fanfare.

One, there are many reasons to suspect that, even in the relatively short term, the number will be considerably higher. Lockheed employs 100 production employees for its Atlas 5 rocket because it outsources many construction functions that Boeing performs in-house.

While it is too early for ULA officials to predict how the move to Decatur will affect the outsourcing, common sense suggests ULA will perform more work in-house. Boeing designed the Decatur facility to perform many of the operations that Lockheed outsources. Boeing's existing employees have the expertise to handle those operations. The same features that made the Decatur plant attractive to the ULA will tend to decrease outsourcing for the Atlas 5.

Another reason for suspecting the ULA projection of 100 new employees is a low-ball figure involves engineering functions at the local plant. While ULA's headquarters and most of its engineering functions will be in Colorado, it needs a significant engineering presence at the production plant. Especially as it reconfigures the Decatur plant to handle another line, engineers are likely to be in high demand.

The second reason the announcement is bigger than the 100-job projection is that it includes a more important longer term.

ULA has a monopoly on EELVs. That means any increase in government launches for the foreseeable future will impact directly the Decatur plant. That monopoly also positions Decatur to enjoy huge benefits if the sluggish commercial satellite market picks up, and there are signs it is doing so already. A significant surge in the EELV market would add Decatur employees; it likely would add suppliers and possibly customers to the Decatur area as well.

So don't let the numbers fool you. Finalization of the ULA was a transforming event for Decatur.

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