Space 2011 Conference
Thank you, John [Elbon], and good afternoon everyone.
I’m honored to have been invited to speak to you today as part of the Space 2011 program. There is so much going on right now in the space community, and this conference provides an excellent opportunity for folks to catch up on both our progress across the aerospace industry, and on our future prospects in space.
As it turns out, today marks the anniversary of a very important milestone in transportation history. One hundred and three years ago today, on September 27, 1908, the first Model T automobile rolled off the assembly line and was driven out the door of the Ford Motor Company factory in Detroit, Michigan.
The Model T, sometimes nicknamed the “Tin Lizzie”, was 11 feet, 2 inches long, and 5 feet, 6 inches wide. It weighed between 1200 and 1500 pounds and had a 10-gallon fuel tank. It had a 177-cubic-inch, front-mounted, inline, 4-cylinder engine that provided about 20 horsepower. It had a two-speed transmission, and a top speed of 45 miles per hour, with a normal cruise speed of between 35 and 40 miles per hour. Fuel mileage was between 20 and 25 miles per gallon on the highway.
Because it used gravity to get fuel to the carburetor, rather than a fuel pump, there was no way to go up a steep hill when your fuel level started approaching the bottom of the tank. Until, that is, drivers figured out that you could just turn around and drive up the hill in reverse.
The cost of a Model T? About $550, which equates to just over $13,000 today. Competing cars were often priced significantly higher, at $2,000–$3,000 each. Over 10,000 Model T’s were sold the first year – a new record for any automobile. All together, over 15,000,000 were sold, with the last one coming off the line in May 1927, adding up to almost a 19-year production run.
The Model T was also the first automobile to be built by several countries simultaneously, being produced in Canada and England in 1911, and later in Germany, Argentina, France, Spain, Denmark, Norway, Belgium, Brazil, Mexico, and Japan.
Ford’s global market share went from 9.4% in 1908, to 48% in 1914. Given the fact that there were 300 different automobile manufacturers in those days, that’s a pretty impressive record. By 1918, half of all cars in America were Model T’s. By 1925, between 9,000 and 10,000 cars were being produced every day, at a price of $240 each.
What was the secret to the Model T’s success? After all, Henry Ford didn’t exactly invent the automobile. And the gasoline internal combustion engine had been used in several early autos in both Europe and the United States. Henry designed and built his own engine in 1896, and mounted it in a 4-wheeled carriage. Then in 1903, he and a few of his partners founded the Ford Motor Company, and they turned out more than 1700 Model A’s, which they sold at $850 each. But that wasn’t enough for Henry.
Listen to his description of what he was trying to accomplish:
“I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
So it seems to me that one of the most important factors was the economics. The Model T is generally regarded as the first affordable automobile – the car that made routine travel possible for middle class America. That doesn’t mean that Ford decided to cut corners to keep the cost down. In fact, the quality of his vehicles appears to have been excellent. But the methods that he used allowed the end product, for which the existing market was extremely limited, to be available at a much lower price than had previously been thought possible, and the market expanded accordingly.
How did he do that? Well, in many cases, he made his own parts. He bought his own iron mines and steel mills. He even obtained his own railroads and shipping lines to transport materials and products. And he established a highly efficient assembly line to enable true mass production. It took his workers just 93 minutes to put together a car, which meant that the vehicles were coming off of the assembly line in 3-minute intervals. Now in those days, the industry standard for factory wages was $2.38 for a 9-hour day. To ensure that he would have a high-quality work force, Ford decided to institute a new minimum wage: $5 for an 8-hour day. Although roundly criticized by his management colleagues, he later commented, “The payment of five dollars a day for an eight-hour day was one of the finest cost cutting moves we ever made.”
Interestingly, Ford’s drive for simplicity and standardization meant that he was even willing to push back on customer preferences. In his autobiography, Ford claims to have told his management team in 1909 that, “Any customer can have a car painted any color that he wants, so long as it is black.”
So are there any lessons that those of us in the space business can learn from Henry Ford and the Model T? After pondering that question for a while, I've concluded that there are at least three different lessons that we would do well to consider.
First, safe, reliable, and cost-effective transportation can be a game changer. This is something we really need to work on in the space community. After 50 years of launching our astronauts into space, we still do not have safe, reliable, cost-effective transportation to orbit. During the Space Shuttle program, we had two fatal accidents in 135 launches – not exactly a safety record I’d feel comfortable bragging about. With the International Space Station relying on regular delivery of food, propellant, and other supplies, the reliability of our launchers is more important than ever. But as the recent Progress failure emphasizes, we’re not yet where we need to be in that area. And in terms of cost effectiveness, because the current costs are so high, only about 500 specially selected representatives of government space agencies and a handful of wealthy individuals have so far been able to personally experience orbital spaceflight. Fortunately, helping to enable multiple companies to get to the point where they can provide safe, reliable, and cost-effective transportation to low-Earth orbit is exactly what NASA’s commercial crew development program is designed to achieve. So we all need to be doing everything we can to ensure their success.
The second lesson is that markets don’t remain static – they evolve as technology advances, as new products become available, and as consumer preferences shift. By the end of the 19th century, the Studebaker brothers had become the world’s leading manufacturer of horse-drawn vehicles. At that point autos were seen as more of a novelty than a genuinely useful device. Breakdowns were frequent, fuel was difficult to obtain, roads suitable for traveling were scarce, and rapid innovation meant that a year-old car was nearly worthless. Nevertheless, Studebaker started making electric autos in 1902, and cars with gasoline engines in 1904. Of course, to hedge their bets, they did continue to make horse-drawn carriages until 1919. As for Henry Ford, there is just no way that he could have known for certain how large the market would be for private automobiles. But he had a vision for a world in which no person making a good salary would be unable to own one. Now in the near term, it may not be realistic to talk about middle class individuals actually owning a spaceship, but I would love to see us work toward the goal of ensuring that all those who make a good salary would be able to travel in one, in order to personally experience spaceflight.
Some people have recently expressed the opinion that there is no proven commercial market for orbital human spaceflight, and that therefore, the entire effort is doomed to failure. But as NASA pointed out earlier this year in its Commercial Market Assessment report, in addition to the government’s stated requirement to regularly transport crewmembers to and from the International Space Station, there is already a demonstrated market both for astronauts from other countries and for private individuals who are interested in flying in space, even given the very high cost that it currently entails. I really don’t think you have to be a “build it and they will come” space cadet to imagine how things are going to work out. In fact, I think that within the next 5 years, once Boeing, SpaceX, Sierra Nevada, or Blue Origin have had a chance to demonstrate their spacecraft, and once Bigelow Aerospace has launched their commercial space station modules, the market demand for commercial human space flight is going to increase exponentially.
The third lesson is that the government can play an important role in helping the industry to succeed, but significant progress can only take place if industry is allowed to innovate. I think most people would acknowledge that government requirements for seat belts, air bags, head restraints, and fuel system integrity have significantly increased the safety of the cars we drive today. But even if the intended objective is safety, issuing new regulations isn’t always the right answer. For example, back in 1865, the Locomotive Act required that all self-propelled vehicles on public roads in the United Kingdom had to be preceded by a man on foot, waving a red flag and blowing a horn. The impact of that requirement was to effectively kill all auto development in the UK for most of the rest of the 19th century. That law was not repealed until 1896, although the need for a red flag was eliminated in 1878.
Just because we have always done something a certain way, doesn’t mean the current approach is the best, or even the safest, way to accomplish something. Those of us in the FAA’s Office of Commercial Space Transportation are very open to new ways of doing business. After all, we have that two-fold statutory mission: to ensure public safety during commercial launch and reentry activities, and to encourage, facilitate, and promote commercial space transportation. So we’re in no hurry to implement system-by-system certification requirements, like you might see for commercial airliners. At the same time, it may make sense at some point to develop and gain agreement on some basic top-level requirements, in order to demonstrate to customers, investors, and insurance firms that this industry really is mature, that we really do know what we are doing, and that we do have safety as one of our highest priorities. When it comes to developing requirements for commercial human spaceflight, we would like nothing better than to work with industry, and with NASA, on a limited set of consensus standards for vehicle design and operations. Things that we can all agree represent sound engineering judgment, best practices from the industry, and lessons learned from past experiences. If we can do that, I think it would be in everyone’s best interests.
So how are things looking in the space industry today? Well, I know the economy is struggling, but right now, I’m pretty bullish. Ten years ago, the Shuttle was still flying a few times per year, and there were a limited number of commercial launches for telecommunications satellites, but that was about it. Today, there is a lot more on the horizon. The use of ELVs for launching satellites will continue, of course. But NASA has now started work on the Space Launch System and the Multi Purpose Crew Vehicle for future exploration missions. During the next 12 months, both SpaceX and Orbital will attempt to demonstrate the capability to deliver cargo to the ISS. Four different companies have funded Space Act Agreements to develop new commercial crew delivery systems, and two others have recently signed unfunded agreements for the same purpose. As part of NASA’s Flight Opportunities Program, six different companies are now under contract to provide suborbital research missions using reusable launch vehicles. The Air Force Research Lab is in the process of kicking off its Reusable Booster System program. And in the next couple of years, I expect at least two companies to begin regular and frequent suborbital space tourism flights.
That’s a lot of activity. And it’s hard to know exactly how it will all turn out. I'm not sure whether any of the vehicles currently being developed will someday be considered the “Model T” for spaceflight, but if that happens, it might not be such a bad thing. Remember, the Model T was considered the first affordable automobile, and over 15,000,000 were sold. So although I’m not necessarily recommending that developers should paint their spacecraft black or add a hand crank as an auxiliary starter system, if you can incorporate some of Henry Ford’s philosophies in order to make this new mode of transportation more widely accessible to the broader public, that would be great.
Thank you, and I hope you enjoy the rest of the conference.