SpaceX’s latest secret lawsuit, though heavily redacted, was made public May 22, 2019, and alleged the Air Force’s Space and Missile Systems Center “wrongly awarded” funds “to a portfolio of three unproven rockets based on unstated metrics.” Under the Launch Service Agreement (LSA) program, the Air Force “rendered the entire SpaceX portfolio” as “high risk” due to the issues involved in SpaceX’s starship rocket system. The complaint argues, “By any reasonable measure, SpaceX earned a place in the LSA portfolio.” This contradicts what Musk himself stated to Acting Secretary of Defense Patrick Shanahan during a meeting last December when he admitted that SpaceX had written: “a poor proposal” that had “missed the mark.”

SpaceX's problems with quality control

The Air Force has good reason to label SpaceX “high risk” with its track record of failed launches, faulty parts, and destroyed spacecraft with little to no responsibility taken on the part of Musk.

Just this past April, SpaceX’s Dragon Crew capsule exploded, and while many outlets reported on the failed launch, with even a short video clip showing the explosion, in a prepared statement released to the public, SpaceX called it an “anomaly.”

But SpaceX’s problems don’t stop there. Falsified inspections on vital parts used in over 10 failed SpaceX missions were discovered in 2015 during an audit, which included two specifically for the US Air Force. Furthermore, this May, a Department of Justice investigation found 76 steel and aluminum parts, purchased by SpaceX from New York company PMI and specifically from engineer James Smalley, were rejected or never inspected, at all, with no less than 38 inspection reports having been falsified.

Tesla faces similar struggles

If these repeated quality issues aren’t enough evidence to prove the Air Force’s astuteness for not selecting SpaceX for the LSA program, one need only look toward Musk’s other business venture, Tesla. Much like SpaceX’s history of faulty parts and equipment, in 2018, Tesla recalled 123,000 Model S sedans built prior to April 2016 due to corroding bolts that often times lead to loss of power steering.

It would appear that quality control issues are endemic to both SpaceX and Tesla, suggesting that perhaps the problem doesn’t lie with the individual companies themselves, but rather Musk’s business management writ large.

Last August, the Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk for tweeting his consideration to take the company private, which caused investors anxiety.

Musk settled with the SEC, agreeing to pay a $20 million fine, retracted his tweet and stepped down as the company’s chairman. Musk clearly didn’t learn his lesson, and the SEC responded by asking he be held in contempt of court in February after the Tesla CEO mislead the public by stating in a tweet that the company would be making “around 500K” cars in 2019. Tesla was sued again in March by investors who alleged that the company’s directors, and Musk more specifically, violated their obligations by continuing to publish inaccurate statements about the company via Twitter, post-SEC lawsuit late last year.

SpaceX and Tesla are cut from the same cloth, both prone to the characteristic sloppiness that plagues Musk’s business ventures.

The two companies are all too similar in their proclivity toward faulty parts and unreliable manufacturing goals. Fortunately for America, though, the Air Force recognized that reality. By labeling Musk’s products as “high-risk,” the Air Force acknowledged the fact that many national security pundits have yet to grasp: despite the company’s elevated valuation, SpaceX is a dangerous investment. And with Musk at the helm, things are unlikely to change anytime soon.
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