LOW ORBIT : Ex-Astronaut Struggles to Steer His Enterprise Through an Asteroid Field of Business Problems

David Randolph Scott was an overachiever in a spacesuit. Muscular, handsome and accomplished, he personified the heroic American astronaut of the 1960s.

He was fifth in his class of 633 at West Point in 1954 and he earned a master’s degree in aeronautics and astronautics from the Massachusetts Institute of Technology. One 1966 news article called him “another John Glenn.”

During Gemini 8 in 1966, Scott and fellow astronaut Neil Armstrong tamed their errant spacecraft as it spun uncontrollably, while the nation held its breath. In early 1969, Scott walked in space during an Apollo 9 mission that helped pave the way for Armstrong’s walk on the moon later that year. In 1971, Scott commanded the Apollo 15 moon shot, driving a rover for the first time across its pockmarked surface.

At 56, Scott still has stars in his eyes. Since leaving the National Aeronautics and Space Administration in 1977, he’s spent much of his time trying to make money putting commercial satellites into space. He’s hoping to gain a small chunk of the burgeoning satellite market--which is estimated to have as much as $5 billion in orders worldwide--for Scott Science and Technology, a tiny Palmdale company he controls.

But the success that came to him so easily as an astronaut has eluded him as a businessman. Three years ago, Scott’s company was poised to design a satellite-launch system to be used in space shuttles. But the Challenger disaster in January, 1986, coupled with President Reagan’s decision later that year to effectively end the role of NASA and the space shuttle in carrying commercial payloads, devastated Scott’s company.

Plans to get much-needed financing fell through. Creditors sued. The Internal Revenue Service placed a lien on the company’s assets for failure to pay $145,000 in payroll taxes. Scott said he nearly put the company into bankruptcy proceedings, but was able to negotiate payment plans.

“It was the worst thing that could have happened to us. It’s been a very tough time,” Scott said.

The company’s financial picture remains murky. It has a negative net worth, with total liabilities exceeding total assets by about $1.4 million as of June 30. In the nine months that ended June 30, the company lost $789,000 on only $58,000 in revenue, with most of the revenue stemming from past research and development contracts. A share of stock in the company costs pocket change these days.

“It’s a disaster,” said John Beyenka, a Century City investment banker who has been helping Scott raise money and who says he has personally invested about $250,000 in Scott’s company.

Scott hopes a recent shift in course for the company will salvage it. He wants to assist companies eager to launch commercial satellites, packaging what he calls a “turnkey satellite system” for customers. For a fee that could run from $5 million to $10 million, Scott’s company would act something like an agent, finding space on a rocket to launch the satellite, lining up insurance, engineering the satellite into proper orbit and making sure it works efficiently once it is in space.

Some big-name companies such as Martin Marietta, McDonnell Douglas and General Dynamics are working on plans to put a satellite into space. The French-based consortium Arianespace has launched 25 commercial satellites since 1980, and claims more than half of the world market for launches.

If Scott puts a deal together, his clients’ satellites would probably be launched with China’s Long March rocket.

Cheaper Launch

The Chinese plan to compete on price: a Chinese satellite launch has been estimated to cost $30 million, compared to $40 million to $80 million using French or American rockets. Launches are expensive, so saving money can be an attractive incentive. Besides the money needed for a launch, a satellite typically can cost an additional $40 million to build, with insurance adding still another $20 million to the overall cost.

The Reagan Administration has given its blessing to plans by China to launch, within four years, three communications satellites that are being made by Hughes Aircraft. Scott has no involvement in the pending launches, but Chinese officials say they welcome his efforts to put together packages for future satellite launches.

“I think it is a good idea for the user, especially for small companies. I’d say his success depends on if he can find users or not. If he can find users, we can provide the launch vehicle,” said Huang Zuoyi, who heads China’s efforts in the United States to promote Chinese rocket launches.

Letter of Intent

So far, all Scott has is a letter of intent to do business with Dominion Video Satellite, a Florida company supported by some of the nation’s television preachers. It is seeking money to launch up to three satellites, starting next year, that would broadcast religious and family-oriented programs to viewers owning small dish antennas.

Scott insists that his package concept is unique enough to succeed. Others disagree.

“I saw him about a year ago. He mentioned something about putting up a full package of a spacecraft and launch vehicle. There are a whole bunch of people doing that around the country, so I didn’t pay much attention to him,” said former astronaut Donald K. (Deke) Slayton, one of the original seven Mercury astronauts and now president of Space Services, a Houston company developing private rockets.

Indeed, Hughes is doing much the same thing that Scott plans to do. And a spokeswoman for Arianespace says it, too, can provide a “turnkey” system.

Born in San Antonio, Scott grew up wanting to be a pilot like his father. To do it, he earned an appointment to the U.S. Military Academy in the days before the U.S. Air Force Academy was founded. After serving as a fighter pilot, Scott was selected by NASA in 1963 as a member of its third generation of astronauts.

Embarrassing Incident

For all the glory of his astronaut days, Scott’s career in space ended abruptly and with some embarrassment. He and his Apollo 15 colleagues, James B. Irwin and Alfred M. Worden, were publicly reprimanded for taking 400 stamped envelopes to the moon to be sold to collectors without authorization from NASA.

The incident came to light when 100 envelopes were sold by a West German stamp dealer for about $150,000. The money was to have gone to a trust fund for the astronauts’ children, but the embarrassed astronauts later renounced any profit.

Scott is reluctant to say much about the incident today. “The whole thing was blown out of proportion. If you go back and look at the facts, it will tell you it was an innocent thing. There was no wrongdoing,” he said.

Nonetheless, Scott was reassigned to a desk job in 1972, although he says he was planning to step down as an astronaut at that time anyway. He moved through the ranks at NASA, ultimately directing the Dryden Flight Research Center at Edwards Air Force Base.

Began Company

Scott retired in 1977 to go into business, and started his company. It went public in 1984 and since then has raised about $6 million from investors, much of it from research-and-development partnerships that provided investors with tax write-offs. Beyenka estimates that Scott has put more than $1 million into the company himself. Much of it from money Scott made in personal investments, including real estate in Colorado, and deferred salary.

Scott’s chances of success depend largely on China’s success at getting its launching business off the ground. China is aggressively going after the market.

China’s Zuoyi says the nation can do it cheaper because of such factors as less costly labor. But competitors, in what has become a familiar litany about other foreign industries, complain that the program is unfairly cheaper because of government subsidies. Former astronaut Slayton notes that using rockets launched from China may well encounter political opposition in the United States, which makes Scott’s plans risky.

“I think he’s dealing in a shaky operation if you want my candid opinion. It’s unlikely the Chinese launch industry going to kick off and become a major factor,” Slayton said.

It might sound as if Scott’s company is operating on a wing and a prayer, but Scott believes his company is stable. If the Dominion project comes through, he said, he believes the company will establish a track record that will let it emerge from its problems.

Those who know him say Scott doesn’t quit easily. “He’s very tenacious,” said former astronaut Frank Borman, “and I have a high regard for him.”