The Leasat Rescue Mission—Steve Dorfman


Andy Ott has done an excellent job of describing the Leasat program which he played such an important role. And Boris Subbotin has put the beginnings of Leasat and HCI in perspective; he was there. I’d like to add my perspective as head of HCI during the launching of the Leasat and Galaxy programs based upon an excerpt from my memoir.

Leasat posed a unique set of challenges for HCI, different from our successful Galaxy program. We had a $335 million lease arrangement with the U.S. Navy to provide four satellites covering the globe for a period of five years. There was no need for selling. The problem was implementing. Leasat was to be launched in the space shuttle. It was the first and last satellite that Hughes designed that could be launched only in the shuttle. The decision to use the shuttle was a political one, emerging from the Navy’s selling of the lease concept and bypassing the Air Force as the procurer of satellite services. But it was to cause Hughes problems because the shuttle was suffering significant launch delays. The first shuttle launch, scheduled for the late ’70s, took place four years late, in 1982, and it wasn’t until 1984 that the first Leasat was launched. Because of the interest rates associated with the loans we needed to pay for building and launching Leasat, the time lag had a significant financial impact on Hughes, but we were able to negotiate prepayments of the lease, which solved that problem. After dealing with the sharks of the media industry, it was a pleasure to deal with the Navy admirals, who adhered to higher moral and ethical standards. We had built five Leasat satellites to provide for the four launches. Our contract stipulated that if we couldn’t provide those four satellites, we would suffer major financial penalities. So we needed at least four of the five to work. The first two Leasats were launched smoothly from the shuttle. The third became a real personal challenge.

I was at our annual corporate retreat in Rancho Bernardo, near San Diego, when the third Leasat was deployed from the shuttle. Several days earlier I had attended the shuttle launch, a spectacular and inspiring event. Seeing the shuttle ascend into space, with its two solid rockets and main propulsion unit all ablaze, was a testimony to the transcendental aspect of the space program. The audacity and the scale of the shuttle program always impressed me. Now the shuttle was in space, the shuttle doors opened and our Leasat was rolled out of the shuttle bay, pretty much like a Frisbee. On-board timers would activate the previously dormant satellite, deploy its antennas and ultimately provide the rocket propulsion to put Leasat on the trajectory toward its final geostationary orbit.

But at 7 a.m. I got a call from Marv Mixon, our Leasat program manager. “Steve,” he said. “We have a problem.” The satellite’s omni-directional antenna had not unfolded, as it was supposed to, once the satellite was deployed. Something was wrong. I called Harold Rosen, who was also attending the meeting, to discuss what it could be. The symptoms pointed to a failure of the satellite to turn its power on, which would be a catastrophic failure. The entire satellite would be lost, dealing a severe financial blow to Hughes in its effort to fullfil the Navy contract. Of course we had the satellite insured for $200 million, but the insurance itself would not cover our full losses. Harold and I met with Bud Wheelon as the day’s meeting started in Rancho Bernardo. Somebody needed to go tell Allen Puckett and the assembled Hughes executives that HCI had a problem. Bud and I looked at each other and I said, “I think that’s your job.” So Bud went to tell Allen the bad news while I jumped into my car to drive to the control center at El Segundo; I would soon fly in the company plane to Houston to see if we could solve this problem. The shuttle astronauts couldn’t have been more supportive. They volunteered to fly the shuttle, while still in space, back to the satellite to see if they could help get it started. A jury-rigged fix was attempted (like Apollo 13!) with some spare cardboard. It was to be attached to a long rod that could be used to flip a switch on the Leasat that might have been the cause of the problem. This maneuver was quickly dubbed “the fly-swat mission” because of the shape of the jury-rigged device the astronauts came up with. It was not at all clear that the switch that could be reached by the fly swatter was the fundamental cause, but at that point it was our only hope.

The space shuttle was still a high-visibility program of national pride and focus. So as the news of the problems with Leasat and the fly-swat mission spread, it drew national attention. And when Harold, Marv Mixon and I went to the shuttle control center to watch the fly-swat maneuver, there was significant TV and print media coverage. Unfortunately the fly swatter failed to start our satellite. Leasat F3 was dead in space.

I was in a conference room on the phone to Bud Wheelon trying to figure out what went wrong and what to do next when a NASA press officer said someone form Hughes had to attend NASA’s regular post-mission debriefing. As President and CEO of HCI, that someone was me. So the NASA mission manager and I walked into a room jam-packed with reporters form all over the world, with video feeds to Washington, New York and Florida. To put it mildly, the questions were brutal. What went wrong? Why did Hughes fail? Why didn’t we have a place for astronauts to grapple the satellite? In general the tone was: You screwed up. And of course we had, which made the press conference especially unpleasant for me.

Finally, after an hour of interrogation, I said I had to leave, that I needed to catch a plane. I failed to mention it was the company plane, which was at my personal disposal, but by that time I had had enough. The reporters apparently had not, since they literally chased me down the hallway, firing questions, taking pictures and generally being obnoxious. I had only seen such scenes in movies. Now I was experiencing one. I arrived back in Los Angeles depressed. I hated failure, especially after so many successes. And this was a significant and well-publicized failure. And then I got a call from my mother in Florida. “Steve,” she said. “I’m so proud of you. I saw your picture on television on the nightly news.” She of course had seen coverage from the unpleasant press conference. For her, seeing her son on TV was a point of pride. For me, it was a disgrace.

On the flight home, Harold had told me that he had been approached by an astronaut who would be the commander of a mission in the spring of 1985. He said that if we could figure out a way to repair our satellites, he would support another shuttle flight to go back to salvage Leasat and get it going again. Unfortunately we didn’t know what went wrong, let alone how to repair it. But it was an interesting thought.

Upon my return to Los Angeles, one of my unpleasant duties was to inform the insurance companies that we had experienced a total loss and that they owed us $200 million. (Satellite insurance premiums varied, but Hughes had paid about $15 million to insure Leasat 3.) I personally called Stephen Merritt, who was the lead satellite underwriter at Lloyd’s of London. Stephen’s father had made a fortune insuring shipping in the Persian Gulf, and Stephen had decided to focus on the equally risky business of insuring objects in space. I must say Stephen was very calm about the whole thing, as if accustomed to making major bets and sometimes losing.

After a month or so, we figured out what went wrong, and also how to fix it. Finding a solution to the problem was like doing detective work from several hundred miles away. We did testing on the ground to replicate the satellite’s symptoms and to assess the possible solutions that might be tried in space. The satellite had been dead on arrival and never made a peep, so we had no clues to go on, only the power of deduction, which we exercised by running these ground tests. An internal switch had failed to close and hence the satellite was not turned on. We could turn it on by creating a bypass box, which would provide another route for powering up the satellite. This bypass box could be attached to the exterior of the satellite. When the NASA astronauts heard about this, they were ecstatic. This would be their chance to display “the right stuff,” as Tom Wolfe famously dubbed test-pilot bravado in his book of the same name. And so we formed a complex game plan to salvage Leasat.

Salvaging Leasat

Accomplishing our objectives would require several difficult breakthroughs. The first was to define the ramifications of salvaging satellites in space from the insurance perspective. Salvage law had been well established for ships at sea. Now we needed to apply that experience to satellites in space and get all of the insurers to agree to our plan. This was probably the most difficult task we had, since we had to coordinate with dozens of insurance underwriters all over the world. But we succeeded in getting them to agree to a deal: If the salvage was successful, we would share the Navy lease revenues with them in an agreed-upon manner which would return most, but not all, of the money an insurer had paid out. In turn, we would put up $10 million of our own money to conduct the salvage mission. This would all work because NASA was not going to charge us anything for its part in the salvage mission. This prompted some critics to argue that NASA would be spending millions of government dollars by rolling the effort to repair Leasat F3 into the launch and deployment of Leasat F4, for which Hughes had paid NASA the standard fees. Of course the critics were right, but NASA officials wanted to demonstrate the shuttle’s flexibility, so they didn’t care.

To be ready for the spring 1985 launch, we had to build the bypass box in a record-breaking six months, which we did. So in April 1985, the shuttle lifted off with Leasat F4 and the equipment necessary to salvage Leasat F3. After deployment of F4, the shuttle went to rendezvous with F3. “Ox” Van Hofton and Bill Fischer donned their space suits and proceeded to conduct the longest extravehicular activity, EVA, in the history of the space shuttle at that time. Ox, nicknamed for his size and strength, manually grappled the 6,000-pound Leasat and stopped its spin. (This could be done, with difficulty, in the zero-gravity environment of space.) Then the two astronauts installed the bypass box, which was to be activated by command from the Hughes station in El Segundo. Then Ox, standing on a long, movable arm extended from the shuttle, manually spun the satellite up. Harold, Marv and I, along with Bill MacGillavary, the corporate treasurer responsible for corporate insurance, were all at mission control in Houston, watching and holding our breath. The signal to turn on the satellite was sent from El Segundo. The previously dormant omni-directional antenna unfolded, a sign that the satellite had come to life. Everything was working – a complete success in a very dramatic salvage.

Bill Macgillvary, Steve Dorfman, Marv Mixon, Harold Rosen and Chuck Rubin at Houston Mission Control During the Rescue Mission

Bill Macgillvary, Steve Dorfman, Marv Mixon, Harold Rosen and Chuck Rubin at Houston Mission Control During the Rescue Mission

Once more, the NASA press officer came around, asking me to represent my company in the post-mission press conference. This time I was ready to meet the press, and with enthusiasm. So I strode happily into the press briefing room. But this time it was only about a third filled. Furthermore, the questions were half-hearted. The stories of the earlier failure had been front-page news in The New York Times. This spectacular rescue mission was covered on page 14.

Years later Mike Armstrong asked me for an example of successful inter-organizational collaboration for a class he was presenting at the MIT business school. I could think of no better example than the Leasat salvage mission. The technical staff of several divisons of SCG who figured out what went wrong and fixed it in a remarkably short time; the lawyers and insurance people who pioneered the concept of salvage in space and then negotiated a creative contract with a Navy customer who was supportive throughout and got what they needed, an operational spacecraft; the insurance industry who took some risks and got their reward, most of their money returned; the HCI team which managed a complex process with the NASA, the Navy,the insurance industry, and the ever watchful media; and finally the NASA and the astronauts who demonstrated the “right stuff”. A complex and successful team effort.

There are two excellent videos that have been made on the subject and Mike used one to present to his MIT class.


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