Musk raises alarm over engine

SpaceX’s Raptor production woes dire, he emails workers

A looming production problem could mean trouble on the horizon for Elon Musk’s aerospace company.

SpaceX could face bankruptcy if it can’t ramp up its engine production, Musk said in a recent companywide email. Musk also called some employees back to work over the Thanksgiving weekend to work on SpaceX’s Raptor engine line, a situation he described as a “crisis.” SpaceX’s Raptor engines are a family of rocket engines designed for use in Starship launch vehicles.

“The Raptor production crisis is much worse than it seemed a few weeks ago,” Musk, who is chief executive officer of SpaceX and automaker Tesla, wrote in the email, which was obtained by the Verge, a technology website.

Musk, who is now a Texas resident, said SpaceX could face bankruptcy if it doesn’t stick to the tight flight schedule for the company’s next-generation Starship rocket, which is designed to carry cargo and people. The rockets are also expected to play a key role in launching the company’s Starlink satellites.

“We face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year,” Musk said. “We need all hands on deck to recover from what is, quite frankly, a disaster.”

It’s unclear how likely bankruptcy would actually be for the California-based company.

SpaceX has been valued at $100 billion in recent months, and Musk said last month that the company is hoping to launch its first orbital flight early next year.

In a tweet this week responding to media reports, Musk said bankruptcy is unlikely for SpaceX, but not impossible.

“If a severe global recession were to dry up capital availability/liquidity while SpaceX was losing billions on Starlink & Starship, then bankruptcy, while still unlikely, is not impossible,” Musk wrote. He also pointed to automakers General Motors and Chrysler, which filed for bankruptcy in 2009 during the recession, and quoted businessman Andrew Grove, saying “Only the paranoid survive.”

Still, SpaceX does need to significantly increase production as it aims for orbital launches as early as January or February. The company has been testing prototypes of the rocket in South Texas and has flown successful short flights, but to reach orbit each rocket prototype could need to use at least 39 Raptor engines.

Last week, Musk said the situation was “all hands on deck,” and urged employees to come in unless they had urgent family matters or were unable to physically return to Hawthorne, Calif., where SpaceX is headquartered. The billionaire said he also had planned to take the weekend off, which he said would be his first off in a “long time” but instead would be working.

SpaceX has been working to ramp up production of the rocket engines, including building a new production facility in Texas, where the company already has a significant presence in multiple regions.

SpaceX has seen several executives leave in recent months, including Will Heltsley, former senior vice president of propulsion. CNBC reported that Heltsley left after he was taken off Raptor development because of a lack of progress. Lee Rosen, SpaceX vice president of mission and launch operations, and Ricky Lim, senior director of mission and launch operations, also left the company in recent weeks.

Musk said as he dug into the production issues it became clear it was much worse than it appeared a few weeks ago, and that “following the exiting of prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this.”

Musk’s other ventures have been quietly expanding into the region, including Musk’s tunneling and infrastructure company, the Boring Co., which has facilities in Pflugerville and Bastrop; a potential Neuralink office; and the headquarters of his private foundation, the Musk Foundation.

This isn’t the first time Musk has cited financial concerns to his employees. In 2018, Musk said Tesla came within weeks of collapse over Model 3 sedan production problems. The company has since rebounded, and Tesla is now valued at $1 trillion.