With the metaphorical ashes of Virgin Orbit’s collapse still smoking, Rocket Lab has stepped up to further solidify its position as Long Beach’s preeminent space company, buying up millions of dollars in assets from the now-defunct firm that will allow for an expedited expansion.
“Every day we wake up and realize how difficult this is—space is hard,” Rocket Lab Chief Financial Officer Adam Spice told the Business Journal during a recent tour of the company’s headquarters.
“As sad as it is to see an entrepreneurial endeavor not work out for all the people involved, it happened to be a pretty good coincidence for us,” he said. “What they had is stuff that we needed, and it’s located two blocks down the road.”
Virgin Orbit filed for Chapter 11 bankruptcy in April, days after announcing it would lay off 675 employees because it failed to secure additional funding. Most of those employees had already been on unpaid leave for weeks.
In late May, Virgin sold off over $35 million in assets to various space firms up and down the West Coast, including Rocket Lab and Vast here in Long Beach.
Rocket Lab placed the winning bid of $16.1 million for Virgin Orbit’s Douglas Park headquarters as well as much of the equipment in it, which Spice said would have cost upward $100 million if it were bought new. On top of that, Spice noted that, once ordered, it can take over a year to receive these complex pieces of equipment such as large 3D printers and state-of-the-art milling machines.
“For every one [piece of equipment] we have here, there might be five over there,” Spice said, comparing his company’s headquarters to the old Virgin Orbit facility. “I think they took a ‘Jurassic Park, spare no expense’ approach.”
The company’s current headquarters, which includes office space as well as manufacturing operations, is about 60,000 square feet, Spice said. The former Virgin Orbit building—one of the oldest at Douglas Park—is more than twice the size at 140,000 square feet.
The Long Beach expansion will allow the company to further compartmentalize its operations across its various facilities. As it is, the headquarters factory floor is where the company builds out its avionics and propulsion systems—Electron’s Rutherford engines and Neutron’s Archimedes engines.
The Rutherfords are then sent to Rocket Lab’s New Zealand facility, where they are integrated into the Electron rockets. The company has a facility under construction near its Virginia launch complex, where the Archimedes engines will be sent for Neutron construction.
In addition to launch services aboard its Electron rocket (and Neutron in the future), the company has its space systems division, which focuses on the design and construction of spacecraft for other companies and organizations. Space systems also is located within the company’s headquarters.
The bulk of engine manufacturing and assembly will be moved into the new, larger Long Beach facility, which will allow Rocket Lab to expand its space systems division at its headquarters, Spice said.
Acquisitions are the fastest and easiest way for companies to become vertically integrated, Spice noted. Rocket Lab has acquired four companies—one prior to going public in 2021 and three since. Going public generated over $700 million for the company, Spice said, which allowed for rapid expansion through acquisitions.
But the influx of revenue has an even more important role: funding the development of the firm’s larger launch vehicle, Neutron, which will be a direct competitor with SpaceX’s popular Falcon 9.
Rocket Lab has planned for 15 Electron launches this year, with six down and the next slated for July 14. Next year, the plan is to scale up to 20 Electron missions as well as the first Neutron launch sometime in the fourth quarter, Spice said.
When asked if there is a possibility that Rocket Lab would move into the super heavy lift vehicle space to compete with SpaceX’s Starship and Blue Origins New Glenn, Spice said “never say never,” but said Electron and Neutron should be able to accommodate the majority of the launch market over at least the next 10 years. If demand soars for a larger vehicle class, the company will evaluate its prospects down the road, he added.
The company currently churns out one rocket every 18 working days, Spice said. At any given time, there are about 10 rockets in various stages of production inside the New Zealand facility.
“Our goal is to be able to have a few spare rockets,” Spice said. “But we’ve not yet been able to get there because the demand has been such that customers are consuming everything we can build.”
It is not a simple task for Rocket Lab (or any space company) to scale up production, Spice said, noting that the work requires highly trained technicians and engineers.
In addition to space and equipment, the Virgin Orbit breakdown provided Rocket Lab dozens of new employees as well as multiple contracts previously awarded to the failed company, Spice said.
With operations across the U.S., in New Zealand and in Canada, Rocket Lab has between 1,500 and 1,600 employees—about 250 of whom work in Long Beach. For perspective, Spice said he joined the company in May 2018 as its 134th employee.
When asked about the local space sector in the wake of Virgin Orbit’s very public downfall, Spice said he does not think launch services is going to be an area that will have “lots and lots of players,” in large part because it’s cost prohibitive.
“And heritage is so important that once you blow up a few things, you have a hard time growing the business,” Spice said, possibly alluding to Virgin Orbit’s failed mission—its first international endeavor—in January that spurred its downfall. “So will there be three successful launch companies coming out of Long Beach? My guess would be no.”
“I think there’s going to continue to be a winnowing of the field,” he added. “It’s a tough business. Really tough.”