Graham Warwick/WASHINGTON DC
Aerojet and Pratt & Whitney are to combine their space propulsion businesses in a joint venture that will be majority owned by P&W.
The deal could spark a consolidation of the US rocket motor industry, with unconfirmed reports that Boeing is interested in merging its Rocketdyne unit with Cordant's Thiokol Propulsion.
Under the joint-venture agreement, P&W will acquire most of Aerojet's propulsion business, employing 1,200 people in Sacramento, California, and relocate the programmes to its space propulsion division facilities in Alabama, California and Florida.
The deal was cemented after Aerojet's parent company, GenCorp, agreed to retain responsibility for the environmentally contaminated Sacramento site. In addition to requiring the usual approvals, the transaction depends on GenCorp being allowed continued access to US Government funds for environmental remediation of the site.
A definitive agreement is expected by the year-end. GenCorp will receive cash and a 20% stake in the joint venture for the propulsion business, which accounted for one-third of Aerojet's 1999 revenues of $615 million. Aerojet will continue some propulsion programmes not acquired by the joint venture.
"We have maintained that the propulsion industry needs to consolidate to reduce costs and become more efficient," says GenCorp chairman Bob Wolfe. "This has been an important strategic priority." GenCorp plans to focus on other defence businesses, including space electronics.
Although Aerojet and P&W produce liquid and solid rocket motors, the companies say there is little overlap. The manufacturers are also working independently on hypersonic propulsion systems.
The Aerojet-P&W deal follows P&W's failure this year to strike an alliance with Snecma's Société Européenne de Propulsion, a deal which would have led to the joint development of a new cryogenic upper-stage engine for the Ariane 5, Lockheed Martin Delta IV and Boeing Atlas V launchers.
The deal is thought to have collapsed because of concerns about US Government technology export restrictions.
Source: Flight International
