In a surprise announcement, Lockheed Martin Corp. and the Boeing Co. plan to combine their rocket divisions in a joint venture to be headquartered at Lockheed’s complex in Jefferson County.
The combination would employ 3,800 people nationwide and would bring to Lockheed’s Waterton Canyon rocket headquarters an unknown number of engineering and administrative positions from Boeing’s operation in Huntington Beach, Calif.
However, the announcement calls for ending nearly 50 years of rocket production and assembly in Colorado: Production of Lockheed’s Atlas and Boeing’s Delta rockets will be consolidated in Decatur, Ala., and some local jobs are expected to move south.
Gov. Bill Owens said the new joint venture would bring hundreds more jobs to the state.
Brian Vogt, director of Colorado’s Office of Economic Development, said, “We’re very encouraged by it and see it as a good signal for future aerospace development.”
But Dan Beck, spokesman for Boeing’s Integrated Defense Systems division, said it’s too early to know precisely how many employees will move to the Waterton Canyon facility – or out of it.
Marco Caceres, a space-industry analyst with the Teal Group in Fairfax, Va., said, “Denver comes out looking pretty good. I don’t know that you’re going to get a lot more jobs, but ultimately, the decision-making for this venture is going to come out of Denver.”
The deal faces significant regulatory hurdles, but there is expected to be pressure from some in the military and space sectors to approve the pact because the companies pledge it will reduce the price tag for future launches.
“There is an absolute necessity to bring down the cost of government space launches,” Boeing’s Beck said.
Caceres, the analyst, said, “This is something the Air Force wants, something that Congress probably wants very much from a cost-savings perspective, so my gut feeling is it’ll happen,” he said.
On Monday, the companies said that “based upon initial estimates, annual savings to the government resulting from the combination are expected to be approximately $100 million to $150 million.”
If approved, the combination could be in place by year’s end.
As part of the deal, the companies would settle lawsuits between them over competition for launches under the Air Force’s Evolved Expendable Launch Vehicle program. They would also move to dismiss court claims against each other.
“These are two venerated rocket launch teams coming together in a consolidated fashion that will eliminate duplication and redundancies” to produce efficient, reliable launches for the U.S. government, Beck said.
The Lockheed-Boeing pact would only combine the companies’ rocket-launch operations. Other space ventures, such as NASA’s space shuttle-related projects and satellite production, are excluded from the pact.
Colorado’s rocket-making history dates from the mid- 1950s when the Glenn L. Martin Aircraft Co., the predecessor of Martin Marietta Corp. and later Lockheed Martin, established a $25 million plant in the foothills of Jefferson County.
There, the company constructed intercontinental ballistic missiles – workhorses of the Cold War. Launch-vehicle construction has continued since that time, although the company’s Titan rockets ultimately were phased out. Waterton Canyon continues to produce the Atlas launch vehicle.
Just two years ago, Boeing announced plans to shutter its Delta rocket plant in Pueblo and consolidate production at the newer Alabama facility.
Boeing’s Beck said the Pueblo facility no longer makes the rockets, although it still has a backlogged inventory of Delta launch vehicles. In time, the Pueblo operation will be closed entirely and folded into the Decatur joint venture with Lockheed, he said.
Staff writer Jeffrey Leib can be reached at 303-820-1645 or jleib@denverpost.com.
