Elon Musk Responds to Leaked Email Where He Warns SpaceX Faces Bankruptcy

Elon Musk has responded to reports he sent a Black Friday email to SpaceX employees urging them to work over the weekend on the company's spacecraft engine.

The SpaceX founder informed employees in the email, which was first reported on by Space Explored on Monday, that production of the Raptor engine line was in "crisis."

Musk added that Space X faced a "genuine risk of bankruptcy" if production was not stepped up enough to support sufficient flights of its new reusable Starship rocket in 2021.

Musk said SpaceX would need "all hands on deck" over the Thanksgiving weekend and that he himself intended to spend the holidays on the Raptor production line.

On November 30, Musk tweeted: "The magnitude of the Starship program is not widely appreciated. It is designed to extend life to Mars (and the moon), which requires ~1000 times more payload to orbit than all current Earth rockets combined."

In another tweet responding to reports of the leaked email, Musk said: "If a severe global recession were to dry up capital availability/liquidity while SpaceX was losing billions on Starlink & Starship, then bankruptcy, while still unlikely, is not impossible."

The SpaceX founder added historical examples to support his response. He continued: "GM & Chrysler went BK [bankrupt] last recession."

He has not, as of yet, denied the authenticity of the email to that it originated from himself.

The Starship rocket is one part of SpaceX's Starship project, consisting of a fully reusable transportation system that is designed to both carry satellites and other technology to low-Earth orbit and beyond. If all goes according to plan, Starship will also carry humans to the moon and, eventually, to Mars.

In April, NASA awarded a $2.9 billion contract to SpaceX to develop Starship as a lunar lander to carry a crew to the lunar surface as soon as 2024. The Verge reported that prototype tests have been underway at Boca Chica, Texas, but that the craft has yet to reach a low-Earth orbit.

Talking to the National Academy of Sciences on November 17, Musk said SpaceX hoped to launch the ship on its first orbital flight in January or February. But the Black Friday email indicated that SpaceX is banking on more frequent flights if the project is to be viable.

The email reportedly read: "What it comes down to, is that we face a genuine risk of bankruptcy if we can't achieve a Starship flight rate of at least once every two weeks next year."

It further indicated that this was at risk due to production delays with the Raptor engine.

The Raptor engine is a vital part of this Starship system. The engine is designed to use methalox, a compound that contains methane. One of the advantages of methalox is that, unlike other rocket fuels, it does not leave residue on engines, aiding their reuse.

Additionally, it is feasible that methalox could be created on Mars, meaning astronauts could make use of in-situ resources to journey back to earth from the Red Planet.

Test flights for the Raptor engine began in 2019 when it became the first full-flow staged combustion rocket engine ever flown.

The Musk email continued: "Unfortunately, the Raptor production crisis is much worse than it had seemed a few weeks ago. As we have dug into the issues following the exiting of prior senior management, they have unfortunately turned out to be far more severe than was reported. There is no way to sugarcoat this."

Space Explored suggested the mention of exiting senior management in the email is a reference to former SpaceX senior vice president of propulsion, Will Heltsley. According to a CNBC report, Heltsley left SpaceX because of a lack of progress in Raptor production.

Musk ended his response to the email with a quote from Andrew Stephen Grove a Hungarian-American businessman, engineer and CEO of Intel Corporation. The quote forms the title of a book on business by Grove.

Musk wrote: "Only the paranoid survive."

Elon Musk
Elon Musk at Satellite 2020 at the Washington Convention Center March 9, 2020. The Space X founder sent an email to employees on Black Friday urging them to work over the weekend on SpaceX’s Raptor engine line and describing the production situation as a “crisis.” BRENDAN SMIALOWSKI/GETTY