US aerospace manufacturers are again expanding production capacity for rocket engines, reversing a long-term trend of decline driven by industry consolidation and stagnant demand.
In recent years there have been as few as two firms – Northrop Grumman and Aerojet Rocketdyne – providing rocket engines to the US government that power everything from precision long-range missiles to NASA’s next generation spacecraft.
That trajectory has now dramatically reversed, with incumbents expanding production and new manufacturers entering the space.
In August, weapons manufacturer Lockheed Martin announced a partnership with fellow defence contractor General Dynamics to produce solid rocket motors (SRMs) for a precision rocket artillery system Lockheed provides to the US Army and others. Production of initial test articles under the agreement is set to start in 2025 at a General Dynamics facility in Camden, Arkansas.
“This third source of solid rocket motors will enable us to move more quickly to ramp production for critical defence capabilities and strengthen the defence supply chain,” said Lockheed chief executive James Taiclet during a 22 October earnings call.
Meanwhile, Northrop is expanding production of its own rocket motors, with CEO Kathy Warden saying her company believes the ongoing boom in munitions sales will last for some time.
“Not only the US, but multiple allies are likely to need to re-stockpile munitions they have donated to Ukraine,” Warden said during a 24 October quarterly earnings call. “As a result, we believe that this higher demand signal is enduring for multiple years.”
American weapons manufacturers have all reported large increases in demand for their products in recently published financial results, with particular emphasis on integrated air defences and long-range missiles.
Such precision munitions have become essential components of modern warfare, while the availability of the SRMs that power the munitions has recently been a major point of contention within the defence industry.
Aerojet Rocketdyne had been the last independent producer of the engines, providing SRMs to major Pentagon weapons suppliers including Lockheed Martin and Raytheon.
The company is also a critical supplier in the Pentagon’s effort to advance hypersonic flight, with its engines powering multiple developmental hypersonic missiles under programmes overseen by the US Defense Advanced Research Projects Agency.
The engine manufacturer was so important to the defence industry that Lockheed attempted to buy Aerojet in 2020 for $4.4 billion.
Lockheed subsequently walked away from that effort a little over a year later, after US competition regulators sued to block the combination on grounds it would give Lockheed control over critical propulsion systems essential to rivals including Raytheon, Northrop and Boeing.
However, production issues at Aerojet, including missed delivery targets to prime defence manufacturers, generated angst within the industry and concerns in Washington about the stability of a critical supply chain.
That led L3Harris to make a $4.7 billion offer for Aerojet in late 2022, a deal that cleared regulatory scrutiny in 2023. Some 18-months later, L3Harris says Aerojet Rocketdyne is on a stable path, booking “significant new business”.
Aerojet contributed $600 million in revenue to L3Harris’ total revenue in the recent third-quarter of 2024, according to CEO Christopher Kubasic.
Speaking during a 25 October earnings call, Kubasic said he is not worried about new competition now entering the market for SRMs.
“There’s just more demand there than there is supply,” he says. “We welcome the competition. We think we have the best technology. We have the infrastructure.”
L3Harris is planning to significantly expand its production of motors for the precision rockets fired by the US Army’s long-range artillery system – the same engines Lockheed and General Dynamics are planning to assemble themselves. Aerojet currently produces 8,000 SRMs for that system annually, but Kubasic says the rate will climb to at least 10,000 and could eventually hit 14,000.
The L3Harris CEO adds that Aerojet delivers some 100,000 SRMs of various types annually, just from one facility, also in Camden, Arkansas.
While the stabilisation and now expansion of Aerojet Rocketdyne under L3Harris has been a welcome development within the defence sector, major figures like Lockheed are still moving to lessen reliance on the once struggling supplier.
“Our existing industry partners are stepping up to try to meet the elevated demand, and investing to do that,” Lockheed CEO Taiclet notes. “But we still need a third source, I think, from an anti-fragility perspective.”
The Lockheed-General Dynamics joint venture could achieve rate production levels by 2027, according to Taiclet. That capacity, he adds, will be available to customers beyond just Lockheed Martin.
“Industry has come together in the service of national security,” the former US Air Force fighter pilot says.
L3Harris also seems open to that notion, with chief financial officer Kenneth saying the company is exploring partnerships with new entrants to the production field to see if there can be “more upside than risk”.
At Northrop, CEO Kathy Warden has struck a more-cautious tone, saying her company is watching closely to ensure the supply of rocket motors does not outpace demand.
“As others are coming into the marketplace, I think there will come a time when we need to look at how much capacity is enough,” she says, noting Northrop has no plans to reverse its projected investments in production.
“We are certainly not at that point,” Warden adds.
In addition to established giants like Lockheed and Northrop, newer start-ups and producers of conventional jet engines have also started developing propulsion solutions for munitions and small aircraft.
Anduril is using internally designed-and-developed turbojets for its new Roadrunner reusable interceptor, and the company’s uncrewed Fury jet is a finalist for the first round of the US Air Force’s Collaborative Combat Aircraft programme.
Uncrewed aircraft developer Kratos and engine-maker GE Aerospace are partnering to develop a small, low-cost turbofan that could potentially power small autonomous platforms.
Rival engine producer Pratt & Whitney has its own effort underway to redesign its turbojet for higher volumes of production, initially focusing on missiles and decoy targets.
Colorado start-up Ursa Major is also developing the Hadley rocket engine that will power a Stratolaunch’s Talon-A hypersonic flight vehicle.
