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Suriname was less than thrilled to see a rocket launch company set up shop in Guyana. Visions of missiles raining on Suriname must have danced through their heads, and more important, the burst of Beal Aerospace revenue would have allowed Guyana to easily match a recent increase in Surinamese arms purchases. No nation is too poor to afford an arms race. Even more problematic was Venezuela, which claimed ownership over the swampland Beal Aerospace was to lease. When news of the Beal Aerospace deal reached Venezuelan ears, the country fell into deal-killing mode. Government officials and diplomats said the launching pad could have military applications and threatened its national security because of U.S. government involvement with Beal Aerospace. A flustered Spoede tried to explain that the government was only involved with export licensing and regulatory matters, but the complaints persisted. A U.N. moderator was called as saber-rattling ensued. According to Reis, the concerns were invalid, and everyone knew it. "Venezuela was just trying to take the project away from Guyana. It's just a competition thing." The border disputes were simmering nicely when the H2O2 fires at Beal Aerospace flickered out. Publicly, Guyana took the collapse with grace. A statement from the prime minister's office read: "The government entered into the agreement with Beal with the full knowledge and understanding that the commercial international space industry is a high-risk competitive business." But it doesn't take much analysis to see that the country--the administration currently in power, at least--misses the project and doesn't want to believe the rain of Texas cash isn't coming. At the end of the interview, voice tinged with hope, Reis asks the Dallas Observer to forward any new information that could help revive the deal. Any hopeful information should be delivered before the Guyanese elections on March 19, she adds. "If the opposition wins, Beal is out. The opposition party will not have Beal in there," Reis says. "Hopefully, we'll win again."
It's May 20, 1999, and Beal is pleading, begging, before Congress. "Please, please do not give companies billions of our dollars to play around with experimental programs. You will create jobs by spending public money, but you absolutely will not produce low-cost commercial access to space," he told the Senate Committee on Commerce, Science, and Transportation. "We don't mind the risks, and we are confident of our ability to succeed. Please help either no one, or everyone." Becoming a government contractor would have flown in the face of his entire philosophy and structure of his company. "We were set up as a commercial business, and Mr. Beal did not want to do what it takes to be a government contractor," says Spoede. "You stop focusing on building a product and start focusing on government relations. Your success is determined by how good your lobbyists are." Beal was staring at stiff, government-funded competition in EELV and RLV markets, an uncertain spaceport project, a problematic rocket system, increasing costs, and a slow market. In September 2000, he cut half of the staff, but company officials refused to say the company was shutting down. When Congress approved $290 million in subsidies a month later, as part of NASA's Space Launch Initiative, Beal decided to abort his mission. "I think it was kind of an excuse. He knew it was coming," says Caceres. "He had technical problems, and the market wasn't booming." After two years of stupendous launch rates, analysts say the number of payloads launched in 1999 dropped by about a quarter, and estimate another 15 percent drop during 2000. Adding to the woes was a hot stock market, where investors shied away from the high-risk slow-growth satellite companies in favor of quick Internet stocks. The satellite market is now at a plateau, and the launch vehicle market seems glutted. Rockets that did go up were fitted with as many as 15 to 20 satellites. Domestic and foreign launch vehicles wait idly for cargo, waiting to be launched at high costs. Upticks are expected; the industry is anticipating launches dedicated to broadband multimedia communications satellites in 2003-04. But the short-term prognosis seems stagnant, especially after the promising 1990s. Still, even in the face of these drawbacks, the industry had begun to accept the upstart business and was surprised by the company's abrupt demise. "Most people were taken aback. I think it was a shock," Caceres says. "The question became, was the market as strong as Beal thought it would be?" Former Beal Aerospace Vice President Lewis watched the shutdown with interest, having seen Beal begin to accept that money and willpower couldn't create miracles. "He began to realize the scope of the job," Lewis says. "He began to realize this was no small feat." Now, the stripped-down company is selling its best ideas to--who else--NASA. Spoede and Beal are negotiating with NASA representatives to sell them confidential technology systems "to make sure they don't end up in a basement." Other things are harder to sell: a million-dollar crane in McGregor awaits a buyer. Spoede laughs hard when you suggest placing it for sell on eBay. For his $200 million, Beal was left with the crane, an empty facility on prime real estate, used rocket engines, and a lease for undeveloped swampland in Latin America. No work on the spaceport had been done, and no full-size rocket had been built. Also, 200 people had been issued pink slips. Spoede says the closure was extremely emotional. "There was a range of emotions from fatalism to acceptance to grief. The staff was unbelievably professional," he says. "He was very giving to his staff, and that probably mitigated a lot of the potential anger. It was almost certainly the correct decision." The loss of Beal Aerospace may mean more than the continuing dilemma of expensive space launches. It can also be seen as a discouraging trend in America away from risky ventures, gutsy moves outside stiff government oversight, and the value of an individual to transform the world. Beal's friend and banking peer Oates takes a moment to decry a government that stepped on the private sector. "The government should be pushing new technologies while the Andy Beals of the world commercialize it within the best business model." Oates says he admires the discipline Beal displayed in the face of an emotional situation. "I admire him for getting into it, and I admire him for pulling out," he says. "It was an intelligent decision, and that's hard. His heart was pushing him to stay in; he was able to step back and keep that passion from consuming him." He gives a prediction: Beal won't stop trying to change the world, in space or at lower altitudes. "I admire him for going to the frontiers and not being afraid to go outside the comfort zone," he says. "He'll never stop. He'll never retire...He represents the best that American entrepreneurism has to offer."
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