SpaceX’s proposed global broadband satellites, designed in Redmond, aren’t a top priority right now. Also: Microsoft’s latest reorg stirs the alphabet soup of company units, and Costco-sized packages bring a court fight.
Elon Musk, founder of PayPal, Tesla and SpaceX, announced in Seattle in January he’d hire a crack engineering team for a new SpaceX facility here to design a constellation of satellites to provide broadband across the world — with the first version in the sky within five years.
Not so fast.
SpaceX has opened an office in Redmond and has already hired 60 people, with 40 more openings, said spokesman Phil Larson.
But speaking last week at a conference in Hong Kong, SpaceX President Gwynne Shotwell said the satellite-constellation venture is low among the company’s priorities right now, and the business case for building it may never pan out.
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“I would say that this is actually very speculative at this point,” Shotwell said at the Cable & Satellite Broadcasting Association of Asia convention, as reported by trade publication Space News. “We don’t have a lot of effort going into that right now.”
“Certainly I think that from a technical perspective this could get done,” Shotwell said. “But can we develop the technology and roll it out with a lower-cost methodology so that we can beat the prices of existing providers like Comcast and Time Warner and other people? It’s not clear that the business case will work.”
Back in January, speaking to an enthusiastic audience at Seattle Center, the billionaire entrepreneur Musk betrayed no doubts as he announced the opening of “SpaceX Seattle” and a sweeping plan to put a constellation of 4,000 satellites into low Earth orbit.
“We should be able to get Version 1 active in about five years,” Musk told the invited crowd of mostly software techies, “A useful Version 1 that has global coverage, except for the poles.”
In an interview just before the Seattle announcement, Musk told Bloomberg News he expected to have 60 employees in the short run, increasing to as many as 1,000 in three or four years.
Asked about the satellite venture at an International Space Station conference in Boston in July, however, Musk was less gung ho.
“A lot of companies have tried this and broken their pick on it. We want to be really careful about how we make this thing work, and not overextend ourselves,” Musk said then. “So we’re being fairly careful about it. I don’t want to overplay or overstate at this early stage.”
“We’re hopefully going to launch a test satellite next year,” he said.
SpaceX’s Larson said the company has nearly 5,000 employees and its main priority now is the rocket launch and manned-spacecraft business.
After a Falcon 9 rocket exploded during launch in June, the first focus is returning that model to flight.
The next development priorities are the Crew Dragon spacecraft, for carrying astronauts into space, and the Falcon Heavy, a bigger version of the launch rocket.
Yet Larson insisted that “we are continuing to move forward with our satellite business in Seattle.”
“It’s long been known the business case for this type of endeavor is very speculative,” he added. “We won’t know until at least a few years down the road what the landscape looks like, but we’re committed to this effort over the long term.”
Peter de Selding, the Paris bureau chief for SpaceNews, reported on Shotwell’s Hong Kong speech and said the change in tone is not surprising. He said the idea behind the satellite-constellation plan was to make money to fund SpaceX’s ultimate goal of sending humans to Mars. Shotwell’s remarks suggest there’s doubt about the business case for that to happen.
Musk said in January it would cost $10 billion to $15 billion, “maybe more,” to create the planned constellation.
“The company is working on $800 million to $900 million of operating expenses a year,” de Selding said. “They have a lot of stuff they want to do and they have to prioritize.”
— Dominic Gates: email@example.com
Alphabet soup at Microsoft
Tech savvy isn’t the only reason many Microsoft employees don’t carry business cards. For some, their titles are out-of-date before the new set arrives.
Microsoft, in the words of one former executive, has a habit of treating corporate reorganizations as the solution to all of life’s problems.
At a sprawling company like Microsoft, acronyms go hand in hand with that desk shuffling.
Take Chief Executive Satya Nadella’s SLT (senior leadership team), which meets weekly to review high-level topics like how many new customers have signed EAs (enterprise agreements) and how OEMs (original equipment manufacturers) are feeling about Windows 10 after its RTM (release to manufacturing) date.
The division that handles Microsoft’s legal work was the recipient of the latest Scrabble move.
As part of a slate of leadership changes to reflect the unit’s expanded role after General Counsel Brad Smith’s promotion to company president, on Friday LCA (Legal and Corporate Affairs) bought a vowel and became CELA (Corporate, External and Legal Affairs).
The LCA term was decades old, a long-lived moniker by Microsoft’s standards.
The folks in software engineering weren’t blessed with such stability.
Take the team that builds Windows. That work has been done, since June, by the WDG (Windows and Devices Group), which of course combined the OSG (operating systems group) and MDG (Microsoft Devices Group).
Before that, Windows was just “Windows.” The simplicity was short-lived, though. Before that, it was Windows and Windows Live (for Microsoft’s “Live”-branded foray into Web services), and before that, the sprawling Platforms and Services empire.
— Matt Day: firstname.lastname@example.org
Union jobs tied to trade, too
About 421,000 jobs in Washington — 14 percent of all jobs in the state — are tied to trade. And of those, 68,500 jobs are union jobs, representing 14 percent of all unionized jobs statewide, according to a new study.
Aerospace has the most trade-supported union jobs: 43,000, according to the study, which was commissioned by the Washington Council on International Trade and prepared by research company Community Attributes.
The trade council’s study is meant to counter opposition to the Trans-Pacific Partnership (TPP) by labor unions, which say that the agreement would cost Americans jobs and hurt the American economy.
Eric Schinfeld, president of the trade council, said in a statement that the findings highlight “why it’s so important to support strong trade policies like the Trans-Pacific Partnership and the Export-Import Bank that increase our employers’ global competitiveness; by doing so, we can create good-paying jobs for workers across our state, union and nonunion alike.”
Union spokesman Stan Sorscher wasn’t swayed.
“TPP has delivered on its promises to help CEOs and global companies,” Sorscher said in a news release from the Washington Fair Trade Coalition. Sorscher is president of the coalition, which includes 70 Washington state labor, faith, environmental, farmer and social-justice groups, and he’s also a labor representative for the Society of Professional Engineering Employees in Aerospace (SPEEA).
“On the other hand, their promises to workers, communities and the environment never come to pass,” Sorscher said. “TPP moves us in the wrong direction.”
The trade-council study counts restaurants as a trade-related industry, saying that “by selling services to international tourists, [restaurants] bring in export dollars to the regional economy.” Restaurants have 2,400 trade-supported unionized jobs.
The maritime industry has 2,100 union jobs directly related to trade, according to the report.
— Janet I. Tu: email@example.com
Court fight over Costco-sized packages
It’s every American’s birthright: the chance to lug an industrial-sized bottle of ranch dressing across a parking lot to their SUV. But should they have to go to a big-box store like Costco or Sam’s Club to do it?
A federal judge said maybe not.
Now, reports the Chicago Tribune, the Federal Trade Commission is siding with a manufacturer that argues it should be free to refuse to sell its giant packages to smaller grocery stores.
Woodman’s Food Market, a chain with stores in Illinois and Wisconsin, last year sued Clorox in federal court, complaining that Clorox will no longer sell Hidden Valley Ranch dressing and other products in the same cheap, large sizes it sells to Costco and Sam’s Club.
Customers prefer the convenience of the larger packages, which the big-box retailers can sell at a lower unit cost, it said. Sam’s Club, for example, offers a gallon jug of Daily Chef ranch dressing for a penny-pinching $7.17.
U.S. District Judge Stephen Crocker earlier this year denied Clorox’s attempt to toss the case.
He ruled that by declining to sell twin packs of 40-ounce ranch dressing bottles to Woodman’s and instead forcing it to buy single 16-ounce or 32-ounce bottles, Clorox may have engaged in illegal price discrimination that places Woodman’s at an unfair competitive disadvantage.
But Clorox has appealed that decision to the Seventh Circuit of the U.S. Appeals Court. And in a court filing supporting that appeal last week, the FTC writes that “for decades, courts have recognized that manufacturers may decide with whom they will deal and that such choice benefits consumers.”
The law does not “require manufacturers to sell the same package sizes to all buyers who demand them,” it adds.
Clorox stopped selling giant packs of food storage bags, cat litter, lighter fluid, bleach and salad dressing to Woodman’s in 2014.
When Woodman’s sued, Clorox halted the sale of all of its products to Woodman’s in an attempt to render the lawsuit moot.
Woodman’s did not immediately respond to requests for comment on the FTC’s intervention in the case Friday.
But in its original lawsuit, Woodman’s says its stores “have the overall appearance of a warehouse food retailer, with industrial utility display shelves, products displayed on pallets and inventory stacked in shipping boxes” just like Costco and Sam’s Club, which it says are direct competitors.
Some customers will flee Woodman’s thanks to Clorox’s decision, it says.
Others “cannot afford to purchase memberships at retailers like Sam’s Club or Costco” and are therefore unable to buy the giant bottles of ranch dressing and lighter fluid they crave, it argues.
Those customers will have to find the cash or endure a sad Christmas with normal-sized Clorox products.
A ruling in the case isn’t expected until the new year, at the earliest.