Main Engine Cut Off

XCOR Loses XS-1 and ULA ACES Contract, Announces Lay Offs

Alex Knapp for Forbes:

“Due to adverse financial conditions, XCOR had to terminate all employees as of 30 June 2017,” the company said in a statement. “XCOR management will retain critical employees on a contract basis to maintain the company’s intellectual property and is actively seeking other options that would allow it to resume full employment and activity.”

The primary impetus for the layoffs, Acting CEO and XCOR Board member Michael Blum told me, is the loss of a contract for engine development that the company had with United Launch Alliance. “The proceeds should have been enough to fund the prototype of Lynx [the company’s planned spacecraft], but ULA decided they're not going to continue funding the contract. So we find ourselves in a difficult financial situation where we need to raise money or find joint developments to continue.” ULA declined to comment.

Not mentioned was XCOR losing out on the next phases of DARPA’s XS-1 program. This is just about the end for XCOR. They’re probably hoping to find a good home for the intellectual property they’ve developed, but I can’t see anything other than that happening anytime soon.

This leaves ULA’s Vulcan-ACES in an interesting position. Blue Origin and Aerojet Rocketdyne are now in direct competition for engines on both stages of Vulcan-ACES: BE-4 and AR1 for the first stage, BE-3U and RL10 for ACES. Will ULA decide to go with one supplier for the entire vehicle or diversify and split the vehicle? There are probably cost advantages to the single supplier route, and peace-of-mind advantages for the split—they wouldn’t be solely dependent on a single company, who in the case of Blue Origin could and most likely will be a direct competitor.