- Status Report
- August 8, 2022
Testimony of Robert M. Davis before the House Committee on Science, Subcommittee on Space and Aeronautics 11 June 2003
Statement of Robert M. Davis
Before the House Science Committee, Space & Aeronautics Subcommittee
Hearing on U.S.-Russian Cooperation in Space
Mr. Chairman, and Honorable Members of the sub-committee, I would like to thank you for taking time from your busy schedules to look into a matter that is of considerable importance to and impact on the future of our US space enterprise community.
My name is Robert M. Davis. I currently serve as the President and Chief Executive Officer of the California Space Authority, a member-supported California-based non-profit corporation, whose purpose is to Retain, Grow and Create California Space Enterprise. Our membership is comprised of individuals and entities from industry, academia, labor and workforce developers, and local government. Our membership includes a number of companies, large and small, from whom you hear frequently in behalf of their and our nations’ aerospace interests. The name of my corporation implies that we are interested only in the well being of California Space Enterprise. However, Space Enterprise is an intensely competitive, internationally coveted industry, and many of our constituents compete in tough global markets. The California Space Authority is therefore keenly attentive to policy positions taken by the US Government that bear on the future competitiveness of our industry and nation and therefore do not limit our interests and voice solely to the confines of the borders of the State of California.
While I appear before you today as an employee of the California Space Authority, the comments and viewpoints today are my own. They are drawn from and reflect extensive earlier experience that I gained throughout the 1990s with a number of US-Russian company to company and company to Russian government dealings and to which I continue to pay ongoing attention. I am flattered to have been invited to appear before you today, and thank you for the opportunity to offer and share my views as a US space enterprise industrialist.
With several provisos that I will define in my subsequent remarks, I support US-Russian Space Cooperation and initiatives, and strongly encourage that our policy makers and policies support company to company cooperative pursuits, in particular where they contribute to a strong US industrial space enterprise base, and compliment our National Security interests.
In support of the aforementioned statement, I offer the following points for the committee’s consideration:
- Overall, US industry dealings with Russian space entities have been a positive experience for US companies. Many US entities have found their Russian partners to be good partners. It is fair to say that strong and positive relationships have developed over the years in a variety of areas. A number of these business ventures have grown to be very successful and they have gained use of technologies that are beneficial to US space enterprise companies’ interests. Later in my remarks, I will underscore what my own experiences have taught me as to how Russians become good partners, which is quite different than how such relationships occur and grow in a US to US business framework.
- Those with whom I speak from across industry for the most part endorse company-to-company engagements with Russian aerospace industries. There are tangible and specific benefits that accrue to the companies who enter into these engagements, from which the USG also benefits significantly. It appears that these dealings have reduced the likelihood of missile technology proliferation. Whether they have wholly stopped proliferation is not known. Company to company aerospace projects do keep Russians (companies and individuals) gainfully employed, thereby creating incentives to behave in ways that comply with US ITAR and export/import requirements, which is beneficial to the interests of the US and USG’s objectives.
- Dealing with Russian entities on development and production of aerospace products achieves other outcomes that are beneficial to the interests of the US Government. These dealings expose and demonstrate market-oriented/western economic operations and philosophies to Russian entities and citizens. Presuming the USG finds it desirable for the Russian Republic to continue in the direction of becoming a true market versus command economy, these relationships and ongoing business dealings do help in achieving the transition of Russia toward that end.
- Aerospace endeavors appear to have been helpful in bringing about Russia’s transition in the direction of a true market economy. A number of early US-Russian company to company dealings broke new ground in Russian adoption of western business approaches, financial thinking and juridical practices that did not broadly exist during the Cold War. Last year the USG recognized Russia as a Market Economy, which can only be helpful to US global economic interests in the future.
- Another real plus is the access US companies have gained to Russian technology and know how through conduct of company to company projects. The opportunity we thereby have to leverage technology, particularly in propulsion, which is selectively more highly performing and a high quality product, has been of specific benefit to US propulsion interests, and thereby the USG and other US companies that buy products that incorporate these technologies.
- I do not have a specific answer to the question “How do US companies ensure that Russian partner companies not proliferate?” In my experience, which admittedly is somewhat dated, I think it very difficult to detect what a Russian partner may or not also be doing that is not in the interests of the US. As professional relationships grow, particularly when US people are operating in situ, it is reasonable to expect that if one has his or her eyes open and ears attuned, one might coincidentally witness circumstances that would give rise to suspicions about undesirable dealings the Russian partner may be conducting. In my own case and those of my past and current colleagues who have ongoing dealings with Russians, none with whom I have worked would allow business interests to cloud their view of US interests and let some concern, if it were to arise, go ignored.
- Cultural behaviors and motives can create an air of uncertainty about whether a Russian entity is conducting ancillary activities that are not in the interests of the US national security and diplomatic interests elsewhere in the world. The Russians are very proud, by their nature very suspicious even of one another, and secretive. They are deservedly proud of their aerospace accomplishments, highly protective of their technology, and behave diligently to ensure that their intellectual property remains theirs, and is not exploited, at least without specific offsetting gain. These behaviors can create concern over their underlying motives, which may not be warranted.
- Russians can become very Trustworthy. My personal experiences speak volumes about dealing with Russians. My and my earlier company’s first “deal” with a Russian design bureau came apart in August 1991, after some months of joint activity, probably the result of a collision of expectations, and more importantly due to fundamental failures in communications borne out of vast initially indiscernible cultural differences. My second undertaking, which became a true, enduring partnership, even when the leaders of the Russian partner were subjected to extreme Russian government pressures to abandon it, have stayed the course. The fundamental difference between the two was the presence or absence of one-to-one trust on the part of the two leaders of the two entities. In the first case, we went at it as a standard business to business transaction, wrapped in typical Letters of Agreement, Contracts, payments, etc., which in the outcome didn’t endure at the first moment of any pressure. The second was a partnership that was built first on gaining each other’s trust, then jointly resolving how to meet our mutual business interests and objectives, and finally entering into a relatively simple “contract”. That partnership endures yet today, and in the case of the Russian partner, has upheld every tenet of the agreements, even when it has been very financially painful for both partners to do so. I can also report that this has been the experience with many of my industrial colleagues who have entered into and continue to conduct business to business dealings with Russians and Russian entities today. That said, neither I, nor my many colleagues who have worked closely with Russian counterparts hold a Pollyanna view of the Russians – they are tough, able competitors, who have their own national and international needs to satisfy, and they will invariably seek to do so.
- There are significant US industrial base downsides that result from US-Russian Space Cooperative Endeavors. US-Russian company to company (and government to government) dealings has and does displace US company workers. Propulsion and other aerospace work that could be done by employees and US companies is being done by Russian companies and workers. Given the recent and dramatic decline in demand worldwide for commercial launches, US propulsion companies, in particular, are suffering, probably all working at something less than 50% of capacity, and worse. From first hand experience, our nation has not had an enduring space launch propulsion investment program, which is what compelled me, one of my former employers and other propulsion companies to look toward Russia as a means of expediently gaining a better domestic competitive position. Essentially, our nation’s only enduring space propulsion investment has been in the Shuttle’s main engine, which generally powers but a fraction of our national launch program needs and capabilities. The expense of large engine development, as a general rule, exceeds the financial capacity of essentially any of the US propulsion companies or corporations. While not necessarily the choice or preference of US propulsion companies, the comparatively meager USG investment in space propulsion is what has helped create the gradient or incentives that stimulated strategic alliances with Russian propulsion developers and producers. In order to achieve the access and workable alliances, a number of those U.S. companies have heavily invested private capital in order to achieve productive agreements; in some cases those agreements have not been particularly lucrative, especially in light of the downturn in the worldwide commercial launch market. To somewhat offset their losses (and domestic technology investments) in propulsion base, those same alliances have gained access to and use of technology and know how developed by the Russians in the course of their space program. The Russians took different technology and production routes than those of the US, and produced, selectively, more highly performing, very durable rocket engines; several of those different approaches are being incorporated into future US engine technology development. In fact, in the era of a future Orbital Space Plane, potentially launched on a US EELV, powered by an engine of Russian technology origin, US ISS access interests are likely to be served. Other such projects such as Sea Launch, arrangements and possibilities exist that could enable routine ISS access in yet different beneficial ways, again selectively using Russian aerospace technologies and capabilities.
- On the subject of US-Russian cooperative interests, nature abhors a vacuum, which absent US-Russian cooperative aerospace endeavors, Russia will seek to fill. If the US were to take the route that future dealing with Russian aerospace developers and producers is undesirable, and cause their discontinuation, several things will or could occur. First, a part of our current expendable launch stable will be disrupted for a period of time. That will result in a loss of competition and in the long run, quite possibly a loss of technological innovation and progress. Absent competition, the flow of innovative juices is eventually stunted. Absent government to government, company to company dealings, Russia will be forced to seek new markets for its capabilities and products. China appears headed in a direction that some US aerospace leaders feel could seriously threaten US space enterprise leadership. Russia may well be induced to turn to dealing with China in order to keep its aerospace community productively employed and earning, something that the US may not find in its longer term best interests. The same outcome may occur between European and Russian interests. The US would also lose access to and insight into the ongoing evolution of Russian aerospace interests and capabilities, which we might later come to regret.
In closing, it is therefore my viewpoint that the US should clearly articulate and steadfastly support policy that enables US-Russian company to company (and government to government) undertakings. I urge that these and our Administration’s deliberations produce policies and accompanying laws and regulations that are implemented in a fashion that minimizes the potential for business disruption. Many US companies have invested considerable sums of private capital in joint US-Russian aerospace endeavors. From time to time they find their partnership and financial expectations disrupted, or relations with their investors imperiled because of a temporary diplomatic position taken by the USG in order to produce a behavioral modification on the part of Russia. Most companies enter into these business partnerships with a prudent appreciation of the potential for instability and possibility of disruption. However, whatever actions the USG can take to insulate these US companies, particularly those that are entrepreneurial, and often thinly capitalized, from contemporary diplomatic issues, should be further explored and implemented.
Mr. Chairman, Honorable Members of the Committee, thank you again for the opportunity to appear before you today. I will be delighted to answer any questions that you may in regards to my remarks.