The American Rocket Co.'s effort to launch its first commercial rocket into space never got off the ground Thursday. Instead, at the 10:28 a.m. scheduled liftoff time, the engine ignited but flames snaked up the unmanned, 58-foot-tall rocket. A minute later the rocket tumbled over on its side, puncturing its liquid oxygen fuel tanks, and as the fire continued, a billowing trail of black smoke rose into the sky. There were no injuries in the explosion. It was a humbling failure for the small, 4-year-old Camarillo company, which had spent $15 million readying for its first launch attempt. The rocket failed because its engine only generated 20% to 30% of the necessary thrust for liftoff, according to company officials. The problem was due to a faulty valve, which limited the flow of liquid oxygen into the engine, they said. AMROC is one of about half a dozen small, entrepreneurial rocket companies that hope to succeed in the growing U.S. aerospace industry. There have already been two successful commercial rocket launches this year in the United States, one by McDonnell Douglas, a major aerospace concern, and the other by Space Services Inc., a small Houston company headed by former astronaut Donald K. (Deke) Slayton. AMROC President James Bennett said after the accident, "Nothing good or great is ever accomplished without setbacks." He likened his company's failure to those seen during the early days of NASA. "It's not going to stop us," Bennett said. "We will get there." The plan called for a 15-minute suborbital flight that would reach 118 miles high in space. It would carry two payloads—a chemical experiment for the Defense Department's Strategic Defense Initiative research program, the other a 550-pound capsule designed by the Massachusetts Institute of Technology to test a new heat shield/parachute combination that was to have splashed down into the Pacific 180 miles offshore. The failed rocket represented a loss of several million dollars to the fledgling company, and Bennett said it could take up to a year to build and prepare another craft. But the company also has to worry about its limited finances. But also riding on AMROC's scheduled flight was the future of its 100 or so workers, most of whom were at Vandenberg to view the flight. In an interview several weeks ago, Bennett conceded that if the first flight were to fail, causing AMROC's fund-raising efforts to dry up, the company could "stretch out" its funds for about a year, although some layoffs would be likely. AMROC's scheduled launch was an emotionally special day for the company's employees and their relatives because AMROC's co-founder, George Koopman, died in an auto accident in July. The rocket that burned Thursday was named the Koopman Express. Koopman enjoyed an eclectic career—he had run an industrial film company and served as a stunt director on "The Blues Brothers" film—but he was also a space enthusiast who raised the money that got AMROC into business. He was convinced that there was a market for low-cost, speedy delivery of 500-pound to 2,000-pound packages into space. On Thursday morning, some of AMROC's officials were relaxed and upbeat. George Whittinghill, AMROC's director of marketing, said, "This is going to be the day." But after the engine ignited and the seconds passed with the rocket still on the ground, one AMROC employee frantically pumped her hands into the air as if to help the rocket on its way. When the rocket started to burn, Whittinghill muttered, "Oh no." George Koopman's sister, Trice Koopman, who was there for the launch, started to sob. The failure weakens AMROC's position in the commercial space race. In March, Space Services Inc. of Houston was the first to successfully launch a private rocket. Headed by Slayton, one of the original seven Mercury astronauts, the company launched a 15-minute, suborbital flight over New Mexico that carried a package of scientific experiments from the University of Alabama. In August, McDonnell Douglas Space Systems of Huntington Beach launched the first U.S. commercial rocket into earth orbit. Its Delta rocket took off from the Kennedy Space Center in Florida carrying a $100-million British television satellite. The U.S. commercial rocket industry has gained momentum since the space shuttle Challenger accident in 1986. Afterward, President Ronald Reagan ordered NASA to stop launching most commercial payloads on space shuttles. Small companies such as AMROC hope to make their way by eventually charging $12 million to $15 million to launch payloads into lower Earth orbit. The packages might include semiconductor, biotechnology and medical experiments that would be operated in weightless conditions; or the rockets would launch miniaturized satellites into space. Most commercial rockets are essentially redesigned intercontinental ballistic missiles originally built under government contracts. McDonnell Douglas' Delta rockets have flown 187 flights since 1960 with a 95% success rate. The company says it has already booked $450 million worth of commercial orders, at roughly $50 million per launch, through 1991. AMROC's failure was especially stinging because the company is betting much of its success on an unusual rocket engine. While Slayton's company buys engines made by the Chicago-based aerospace company Morton Thiokol, AMROC's engineers came up with their own design. Most rocket engines rely on either solid or liquid fuel, but AMROC's is a hybrid system that uses both. The solid fuel, which is a synthetic rubber that resembles car tires, is ignited when sprayed with liquid oxygen. Although it makes for a slower rocket than government missiles, it is also less costly. Charles Lundquist, director of the space materials consortium at the University of Alabama, said before yesterday's attempted flight: "I am optimistic that the best of them (the companies) will prosper. Obviously there are some weak sisters that won't. There will be a weeding out."