Posted: Tue, Feb 6, 2001, 5:26 PM ET (2226 GMT)
Overproduction of spacecraft and launch vehicles is hurting the commercial space industry and may lead to consolidation on a global scale, one executive warned Tuesday. Albert Smith, vice president of space systems for Lockheed Martin, told attendees of an FAA conference in Washington that development of new launchers and an overall decline in demand has led to an overcapacity in the commercial satellite and launch vehicle business of at least 40%. This overcapacity, in turn, creates pressure to lower prices that leads to "profitability concerns" that are hurting aerospace companies: Smith noted that the combined market cap of Boeing, Lockheed Martin, and Raytheon is considerably less than home improvement retailer Home Depot. Smith argued for an increased commitment by NASA to develop new technologies that lower the cost and increase the reliability of space access, suggesting that the agency "place its bets" on a few key technologies, rather than spread its limited funds too thinly on a wider range or programs.

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