By Michael Schrage
Washington Post Staff Writer
Wednesday, January 29, 1986
Officials of the companies that built the space shuttle Challenger said yesterday they would begin internal investigations to determine to what extent -- if any -- their components might have contributed to the craft's explosion.
Rockwell International Corp., the program's prime contractor and builder of all five shuttles, Martin Marietta Corp. and Morton-Thiokol Inc. -- the two other key contractors for the Challenger's launch systems -- limited their official comment to expressions of condolence for the families of the Challenger's crew. All inquiries about the shuttle were referred to the National Aeronautics and Space Administration.
Several company officials confirmed that they would instruct engineers to cooperate with the NASA investigation as well as pull together technical data needed to analyze the events leading up to the disaster.
The explosion dealt a major blow to the aerospace industry's plans for a "commercial space" marketplace, where the shuttle is expected to be used as a bridge to space manufacturing of pharmaceuticals, semiconductor chip fabrication, new materials and other for-profit endeavors.
In addition, insurance companies that had considered underwriting commercial space ventures are likely to be further discouraged from participating.
On Wall Street, as the stock market rallied overall, the stocks of the shuttle companies were losers.
Morton-Thiokol of Chicago lost the most ground. At one point, the company had to stop trading its stock because there were too many sellers. It finished the day down $4.375 a share to $32.50.
Rockwell, of Pittsburgh, dropped 87 1/2 cents to $34.375, and Bethesda-based Martin Marietta was down $1.1125 to $33.50.
Lockheed Corp., which handles ground servicing for the shuttle at Cape Canaveral, where the Challenger was launched, saw its stock drop $1 to $45.75.
In a statement, Rockwell Chairman Robert Anderson said, "We at Rockwell were shocked by the catastrophe that occurred this morning. On behalf of the company and our subcontractors and the thousands of people who helped to build the space shuttle, I want to extend our deep sorrow and condolence to families of the Challenger crew.
"Our engineers and scientists are making every effort working with NASA to find the cause of this tragedy."
Rockwell is, by far, the shuttle's largest contractor. The company's Rocketdyne Division in Canoga Park, Calif., manufactures the space shuttle's powerful main engines. In addition to managing the shuttle's support operations at Houston's Johnson Space Center, the company's Space Transportation Systems Division makes the space shuttle "orbiter."
An $11.3 billion-a-year aerospace and defense giant, Rockwell's aerospace group contributed roughly $5.3 billion to the company's revenues last year. The company has been the prime shuttle contractor since 1972.
Morton-Thiokol, with $1.8 billion in annual revenues, manufactured the shuttle's solid rocket boosters -- the twin rockets that ride alongside the shuttle. The fuel is made in a plant outside Brigham City, Utah. Aerospace generates nearly 45 percent of company revenues, with the space program accounting for nearly half of that.
Martin Marietta, with $4 billion in sales, makes the shuttle's main fuel tank, which, when its tons of fuel exploded, consumed the shuttle. Empty, the tank weighs from 66,000 pounds to 68,000 pounds. Filled with fuel, the tank weighs close to 1.6 million pounds. The tank is normally designed to disintegrate after 8.5 minutes into the flight.
The fuel tank is manufactured by a Martin Marietta Aerospace facility in East New Orleans that employs 4,700 people.
The Reagan administration has aggressively pushed the commercialization of space, encouraged investment and last year set up a Commerce Department group to encourage space ventures and requiring NASA to cooperate with companies and entrepreneurs with commercial space ambitions.
But recent mishaps have forced a hard second look at the business.
James W. Barrett, president of International Technology Underwriters, the company that insures most American commercial satellites, told Congress on Oct. 31, "an unprecedented decline in the reliability of space hardware" cost the satellite insurance industry $633 million since February 1984.
Before a series of satellite losses, insurance cost about 5 percent of the amount insured. Rates have soared to 30 percent of the insured amount.