Failure to launch? Vector ousts Tucson CEO; rocket firm locks out employees

Vector Launch, a Tucson-based small rocket company, dropped CEO Jim Cantrell on Friday, locking the doors of its three offices around the country and cited financial issues in "undertaking a pause in operations."

Vector had inked a lease with Pima County in 2016 to build a 60,000-square-foot headquarters and rocket factory on 15 acres south of Tucson International Airport, but didn't follow through with construction.

John Garvey, one of Vector's co-founders, has taken Cantrell's place as CEO, the company's website and social media indicated this weekend. That site's staff listing was scrubbed of mentions of Cantrell, who edited his own LinkedIn profile to indicate he was no longer the head of the aerospace firm. Garvey was formerly the firm's chief technical officer.

Company employees in Tucson, and at Vector sites in Huntington Beach and San Jose, Calif., said on social media Friday that they had been locked out of their offices when they showed up for work. Some indicated that they had been laid off.

The company at its founding had touted its plans to use small reusable rockets carrying micro-satellites into orbit. Its plans in Tucson were praised by officials, including Gov. Doug Ducey and then-Board of Supervisors Chair Sharon Bronson.

Vector had previously pulled in substantial venture capital investments. The industry press this weekend reported that at least one major VC firm had pulled its backing from the company.

Neither company representatives nor Cantrell responded to requests for comment about the recent moves.

No WARN Act notices, which are legally required when a company lays off 50 or more employees at a site, were posted online about the company on either the appropriate Arizona or California state agencies.

Vector put out a brief statement, but did not detail the staff changes, except for a mention in a tweet ("Vector announces departure of Jim Cantrell from Vector and appointment of John Garvey as new CEO."):

"In response to a significant change in financing, Vector Launch Inc (Vector) announced today that it is undertaking a pause of operations. A core team is evaluating options on completing the development of the company’s Vector-R small launch vehicle, while also supporting the Air Force and other government agencies on programs such as the recent ASLON-45 award."

The company reportedly has about 150 employees across the three sites, with its headquarters and manufacturing facility on South Toole Avenue in Tucson, near Downtown, an engineering office in Huntington Beach and a marketing office in San Jose.

"The company plans to make more information available next week," Vector posted.

SpaceNews.com broke the news Friday:

Industry sources claim that one of Vector’s largest venture capital backers, Sequoia, withdrew its funding for the company. Sequoia did not immediately respond to a request for comment, nor did Cantrell or Garvey.

Cantrell and Garvey founded Vector in 2016, incorporating technology from Garvey’s previous company, Garvey Spacecraft Corporation. The company planned to develop a series of launch vehicles providing dedicated launch of small satellites. The company also announced plans for its own software-defined satellites, called Galactic Sky.

The company found success raising capital from funds like Sequoia. The company announced in October 2018 a $70 million Series B round, and had raised a total of about $100 million.

After performing a pair of low-altitude suborbital test flights, Cantrell said in early 2018 that he expected the first launch of the Vector-R rocket to take place before the end of the year. However, the company has yet to attempt an orbital launch. Company officials said earlier this summer that they were planning at least another suborbital test flight from Pacific Spaceport Complex – Alaska on Kodiak Island, Alaska, later this year.

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The shakeup at Vector comes only two days after the company won a launch contract from the U.S. Air Force. The $3.4 million contract for the Agile Small Launch Operational Normalizer (ASLON)-45 mission falls under the Small Rocket Program-Orbital (SRP-O) program run by the Space and Missile Systems Center’s launch enterprise experimental division at Kirtland Air Force Base. The ASLON-45 mission, scheduled for launch in the third quarter of 2021 from Wallops Island, Virginia, will carry multiple three-unit and larger U.S. government cubesats to a 45-degree low Earth orbit.

Vector, which has also gone by the name Vector Space Systems, signed a lease in 2016 to build a headquarters office and rocket manufacturing plant in the Pima County aerospace tech park south of the airport. High-altitude balloon firm World View was the inaugural tenant of the area.

Vector had planned to put small payloads into orbit by launching hundreds of small rockets each year, company representatives said in 2016.

From TucsonSentinel.com's 2016 report on the Vector/Pima County deal:

The company plans to hire 200 employees over three years, with an average salary of $70,000, county officials said. Vector forecasts a $290 million economic impact over five years as they build its 40-foot-tall rockets, and estimates about 90 indirect jobs will be created as a result of the expansion. The company will lease land from the county and make a capital investment of $19 million in that period, and up to $50 million over 15 years, officials said.

The company's lease with Pima County called for market-rate rent to be paid when construction began on the facility. But no building plans were ever filed for the subparcel south of East Aerospace Parkway, and no development has occurred at the site. The county paved a short roadway extension on its larger parcel near where World View sits at the corner of Aerospace and South Raytheon parkways.

That lease called for Vector to begin construction within 18 months of signing in December 2016. The company was to have paid $96,000 per year for 25 years, with the rent adjusted for inflation. At the end of the term, the building was to be owned by the county.

By the fourth year of the deal, the company committed to employing at the site at least 200 full-time-equivalent employees with average salaries of at least $75,000 per year.

But Vector never began construction and thus never triggered the rent and employment clauses of the lease.

Vector's Cantrell previously said that a 2017 explosion of a balloon at World View caused potential backers for a plant for his company to be wary.

Vector did establish a small testing facility at Pinal Airpark, with horizontal and vertical testbeds but no launching site.

More from that 2016 TucsonSentinel.com story:

Founded by Jim Cantrell, who played an early role in Elon Musk's SpaceX venture, Vector bought Garvey Spacecraft Corporation in July, obtaining that company's prototypes for rockets that are considerably smaller than the 100-foot vehicles that generally carry satellites to space. John Garvey, who was also involved with SpaceX, joined Vector as chief technology officer.

For the moment, Vector shares a small warehouse home on East 16th Street with another of Cantrell's ventures, Vintage Exotics, which manufactures parts for old Ferrari, Maserati, Shelby, Corvette and other sports cars.

The company plans to begin blasting its rockets, which have been tested in a small-scale sub-orbital launch, into space with 10 to 100-pound payloads by 2018. The company plans to build the rockets in Tucson and use launch pads in Alaska and Florida, and says its systems will be much more affordable than other satellite platforms. They will also launch more frequently than more massive rockets, company representatives said, and two of the stages will be reusable. The firm already has testing and development contracts with NASA and the Defense Advanced Research Projects Agency, and a customer in a Finnish satellite company.

The company told the county it has nearly $100 million in contracts for launches signed already, with another $130 million in launches in negotiation.

The company, founded in April, has about 20 employees at its temporary Tucson headquarters. It will build a new HQ and manufacturing plant in the Pima County Aerospace, Defense and Technology Business & Research Park near Tucson International Airport. The county and the Arizona Commerce Authority are working with Vector in a public-private partnership to develop the facility. About 58 temporary construction jobs will also be generated by the project, according to an analysis commissioned by Sun Corridor. The county will assist in hiring and training Vector's expanding workforce.

The company and county had planned to announce the building plan at a press conference Thursday afternoon, but the closely held news was mistakenly leaked early by a public relations firm.

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Vector plans to ask the city of Tucson for incentives, but county officials said the move to the tech park isn't contingent on city backing. In addition, Vector is eligible to apply for the Commerce Authority's Qualified Facilities Tax Credit Program and the Job Training Grant Program, a spokeswoman said, without detailing how those incentives might be applied.

"While Vector's eyes are focused on the stars, our home is in Arizona because we believe in its potential as a competitive tech hub," said Cantrell in a news release.

Local and state leaders touted Vector's announcement in the release from the company.

"These locally grown aerospace companies are locating to an area acquired by the county in its effort to protect Raytheon Missile Systems from residential encroachment," said Huckelberry. "Raytheon has welcomed these fellow aerospace manufacturers and these three companies combined are creating a gravitational pull of other aerospace companies interested in locating to the park."

"Helping our local businesses grow and prosper is as important to the county's economic and job growth as attracting new companies in town, if not more so," said Sharon Bronson, chair of the county Board of Supervisors. "Our country has embarked on an exciting new era of commercial space flight, and I am immensely proud that Pima County is able to assist an imaginative local company like Vector Space Systems, which is in the vanguard of this new race to space."

Vector is "precisely the type of innovative, 21st century company we are working to attract to Arizona through our pro-business policies, and an excellent addition to Southern Arizona's already thriving aerospace industry," said Gov. Doug Ducey.

Vector successfully tested a smaller version of its rockets July 30 in Mojave, Calif., with the launch of a 12-foot prototype with a 3D-printed injector that used what the company calls a "unique propellant combination of liquid oxygen and densified propylene." That test included a prototype payload from Finnish company Iceye.

Cantrell bragged that "I’m going to dominate the small side" of the space-launch industry, but "there’s a potential there will be a lack of demand" to support all of the companies that were entering the market.