Why is Jeff Bezos building rocket engines in Alabama? He’s playing to win

It wasn't just good politics. Or good business. It was both.

This week the governor of Alabama announced that Blue Origin would build a factory in Huntsville, Alabama, for its new BE-4 rocket engine. "I must commend founder Jeff Bezos and company President Robert Meyerson for their vision to create this innovative company, and for choosing to make Alabama its home sweet home," said Gov. Kay Ivey.

The decision has been widely hailed as largely a political one—Alabama has considerable influence in the US Congress over space policy, and, with its decision to build there, Blue Origin was aligning part of its future with the southern state—but that does not appear to be the sole rationale. Rather, a closer examination of the Alabama choice reveals that Blue Origin founder Jeff Bezos, whose business acumen pushed Amazon to the top, has brought the same shrewdness to the aerospace industry. He is playing to win.

A year-long process

The BE-4 rocket engine is the cornerstone of Blue Origin's future as an orbital and deep-space rocket company. About 30 percent more powerful than the space shuttle's main engine, seven of the BE-4 engines will power the company's large New Glenn orbital rocket. It also is the front-runner to be selected by United Launch Alliance for its next-generation rocket, Vulcan. In other words, if the BE-4 engines work out, Blue Origin will need to build a lot of them.

This gave the company a major chit to play. Building a rocket factory brings hundreds of jobs and requires a significant investment from a company. Also, within the aerospace industry, the Kent, Washington-based Blue Origin has an excellent reputation, with the potential to attract other space businesses to wherever it locates the factory. Finally, there is the cachet of associating your region with Bezos, who likely will become the world's richest person within a year or two.

Blue Origin spent about a year weighing financial incentives from about three dozen locations across the country, including Florida, Texas, and Alabama. In the end, Huntsville, Alabama, offered the most money, about $50 million in financial incentives. In return, the company will invest about $200 million into the state and bring more than 350 jobs. Two sources told Ars the bidding process was "very close." Ultimately, one source said, the decision was made on "soft factors."

Politics

One of those soft factors is politics. During a news conference in Huntsville this week, one of the participants was US Sen. Richard Shelby (R-Ala.), the chairman of a Senate subcommittee that oversees all federal spending for NASA. Shelby has one clear priority for the nation's space endeavors—that they favor Alabama with their attention. "I am pleased to see Blue Origin investing in Alabama, and I look forward to working with them and other businesses to continue boosting economic development opportunities," Shelby said.

This helps Blue Origin in at least two fairly straightforward ways. One is its deal to sell United Launch Alliance (ULA) its BE-4 engine. In recent months a handful of congressional representatives has sought to push ULA toward buying its engines from Aerojet Rocketdyne instead of Blue Origin. However, ULA's preference has been the BE-4 engine, which is further along in development and likely will cost the company considerably less. Having Shelby on board provides something of a backstop in the Senate against congressional meddling in ULA's decision. (Blue Origin's plans to build in Huntsville are contingent upon being selected by ULA as its engine provider).


Additionally, although Blue Origin has yet to aggressively seek funding from NASA, that is likely to change over the next few years. Already, the company has talked about working with NASA on a Blue Moon concept to land cargo and eventually humans on the Moon, and having Shelby's support—as well as other members of the Alabama delegation—will help as Blue Origin seeks to increase its partnerships with the space agency.

Proximity

Finally, there is the value of the location itself. By building its factory in Huntsville, Blue Origin will have proximity to Marshall Space Flight Center, where the company already has some connections. The Alabama space center has a long history of working on rocket engines and will provide Blue Origin with a repository of knowledge. This connection will also help when the company seeks funding from NASA down the road.

Additionally, by choosing a site in Huntsville, Blue Origin will have a factory less than 30 miles from ULA's rocket assembly factory in Decatur, Alabama. If the BE-4 engine is a success, and ULA begins buying them in bulk for its Vulcan rocket, it is always good to be close to a key customer.

The bottom line is that the Blue Origin announcement this week was more than just good politics or good business. It was both, and it further cements the company, and its billionaire founder Jeff Bezos, as a central figure in the next decade of global aerospace—and beyond.