Houston Space Society
Date: 7 August 1990
To: Mr. Ben Bova, Chairman of the Board, NSS
CC: NSS Board Members, Chapter Newsletters
From: Jim Davidson, Director for Region 3
Effective 31 December 1990, I will be resigning from my position on the National Space Society Board of Directors. My reasons are many and varied and I wish to elaborate upon them here to improve the chances that the Board can become more effective in the future.
On 15 June 1990, NSS Executive Director Lori Garver, at the suggestion of the Legislative Committee of the Board, sent a letter to US Trade Representative Carla Hills regarding the pricing of the Long March vehicle. Further action was taken in paying approximately $5,000 for the development of a draft petition pursuant to Section 301 of the Trade Act of 1974 which was also forwarded to the US Trade Representative. This policy action was widely publicized through a press release distributed to the major media. Not until 18 July 1990 was a memorandum circulated to the Board of Directors regarding these actions.
A significant policy position was taken and money was spent to promote it and publicize it without any opportunity for Board members such as myself to have input. (For example, I did not see a copy of the press release until after its distribution to the media). I oppose the policy position NSS has taken on this issue. I do not pretend that my Board seat should entitle me to veto power on this matter; I feel strongly that my view should have been solicited prior to NSS taking a very public stance on this very important issue. Given that my views were not solicited, common courtesy suggests that members of the Board, especially those working in the industry affected by the NSS policy position, would be alerted to the policy actions being taken. The decision to pursue this foolhardy policy was reached, as I understand it, during the time period of the Ninth Annual ISDC in Anaheim an appropriate time and venue to acquaint members of the Board with such important and visible actions. Given that I was in attendance at that conference up to the morning of Tuesday 29 May, I find it unreasonable that I was not contacted.
The idea of calling for trade sanctions with so little evidence of wrongdoing to support the case against the Chinese is ludicrous; it is a policy which will severely damage the payload sector of our space industry and may lead to retribution which could harm the launch sector of our space industry as well. The policy position is a significant departure from the previous NSS position in this area, supporting free trade in space-related industries.
Why is this policy wrong? The policy addresses two substantive complaints: of government sponsorship of launch activities and of pricing below cost. In the case of government sponsorship, the Chinese are no more guilty of this than are the United States or the European nations of the ESA. Both the US and the ESA governments supported the development of launch vehicles and ground facilities which are now offered "commercially." No royalty is paid to the US taxpayers for the millions they invested in developing the technology of the Titan, Atlas, or Delta. The fees paid for use of US launch facilities cover recurring costs, not the value of the construction of the facilities. One might suggest that such subsidies represent "research and development subsidies" which are better than "operational subsidies." Even if this sort of semantic argument were accepted, it would ignore the substantive operational subsidy provided to the US suborbital launch services industry which utilizes an extensive "surplus" military missile motor inventory to provide low-cost launches. Nor does it serve as a reasonable argument against the US practice from 1981 to 1986 to provide commercial satellites with rides on the US space shuttle at prices which bore only a limited (and seemingly quite fractional) relationship to the recurring cost of those launches.
The argument that the Chinese pricing is below cost is very difficult to verify. The Chinese system does not easily lend itself to determinations of cost. The prices themselves are not public; NSS has relied on "published reports" rather than primary sources, as far as I can tell, to support every claim it has made. Be that as it may, the use of "symbolic pricing" to obtain market share is not unique to the Chinese nor to this industry. For example, the May/June 1990 issue of Space Markets (as valid a published report as any quoted by NSS) states on page 121 that "Arianespace used to make it 'a rule of thumb' to undercut NASA by $1-3 million" back when the shuttle was flying commercial payloads. In the US commercial launch industry, "first-launch" prices on a number of vehicles have been proposed (and even accepted in at least one case) at substantially lower prices than were offered for subsequent launches. The practice of "buying in" is not unheard of, even in this country. Prices for launches are not set in the international market by anything approaching market forces; therefore the Chinese practice is not clearly in violation of an agreement that their prices reflect the international pricing structure.
In calling for trade sanctions, even on such non-aerospace commodities as textiles, the NSS invites counter-sanctions which could be directed far more directly at the US space industry. Beyond the damage implicit in a trade war, there is also damage in protection for an industry in which substantial competition has been limited and recent. Additional price competition would be extremely beneficial to both the payload sector and the launch services industry -- nothing else will drive innovation more rapidly.
The damage has been done. I will not be named among those responsible for helping to establish policy for the National Space Society when I am permitted no opportunity to comment upon, advise, dissent, or know about such policy until after the policy is implemented. The Board should have been consulted before the letter was sent to Ambassador Hills. Forewarned is forearmed; had I been made aware that such a major public position was being taken, I could have taken suitable action to request that the position be more carefully considered, and had an opportunity to be on the record in my opposition. As it is, the announcement caused me significant personal and professional embarrassment.
Policy matters which are suited to Board comment, as Ms. Garver and Mr. Reynolds clearly consider this matter to be, as indicated by their Memorandum of 18 July, should not be acted upon prior to Board comment and approval. As Chairman of the Board of Directors, Ben, please investigate how this policy decision was made, who had input, who decided to go forward without Board approval, and who was responsible for this whole mess. Has it occurred to anyone that an Assistant to the President of McDonnell Douglas Corporation is said to have authorized spending $5,000 of NSS money, on a trade sanction policy action that apparently might be of benefit to one of the current business activities of his company? It has been suggested by Glenn Reynolds that, in fact, McDonnell Douglas is bidding on a substantial aircraft "deal" with the People's Republic of China, and therefore has not been encouraging the NSS position on this matter; rather than providing reassurance, this statement reinforces the appearance of suspect motivations and might explain rather handily why McDonnell Douglas is not pursuing its own petition in this case. I am deeply concerned with the appearance of impropriety in this matter. It seems to me that Mr. Walker should have disqualified himself from the decision to spend this money and that Ms. Garver should have insisted on Board approval. It is also my opinion that both Garver and Walker should be reprimanded.
Further occasion for reprimand of Garver is indicated in her handling of NSS Headquarters staff. The two principal staff of the Tucson Headquarters of one of the antecedent organizations of NSS, Greg Barr and Aleta Jackson, were both fired by Garver, in spite of their considerable sacrifice on behalf of and important contributions to NSS. Henry Vanderbilt, Charles Miller, Leonard David, and, I hear, Kate McMains have resigned during Lori's tenure as Executive Director. Who will be next to resign? Who will Lori fire next? Employee turnover of such magnitude would send alarm bells through any other organization.
The NSS slogan is "Creating a spacefaring civilization that will establish communities beyond Earth." Well, I want to see more civilization within the NSS; I want to see more community. The misfeasance, the malfeasance, the nonfeasance, the abuse of power, the junketing, the abrogation of agreements, the bickering, the infighting, the barbaric behavior, these cannot be part of our organization, if it is to succeed. The civilization we take into space is being created here on the ground. We must take a stand against those who would corrupt it into brutality.
I will continue to be a member of NSS, a member of my chapter's Board of Directors, the chairman of the Chapters' Assembly, and the Activist Programming Chair of the 1991 International Space Development Conference. I look forward to working with you, Ben, through 1 December 1990 and in the future as the opportunity arises.
