The U.S. Department of Defense is still reviewing Lockheed Martin and Boeing’s proposed rocket-launch joint venture, several weeks after the companies had initially hoped to close the deal, according to a senior Pentagon official.
The review is “a very active piece of work between us” and the Federal Trade Commission, said Kenneth Krieg, the undersecretary for acquisition, technology and logistics.
The venture requires approval from the FTC, which has asked for an opinion from the Defense Department because the military would be the principal customer for the joint venture, Krieg said during a news briefing Friday in Washington.
Lockheed and Boeing announced plans for the venture last May and had hoped to win regulatory approval by the end of last year.
Citing senior military officials, defense analyst Loren Thompson said Monday that the Pentagon has given preliminary approval to the alliance and is working to resolve concerns raised by Northrop Grumman.
Northrop is worried that the joint venture would hurt its satellite business. Northrop competes against Boeing and Lockheed in the manufacturing of satellites.
“The government says that it must have two separate families of rockets so that if one fails, the nation can still get into space,” said Thompson, an analyst with Lexington Institute in Arlington, Va. “If it’s going to meet that goal, it’s going to have to come up with some sort of special arrangement” for Lockheed and Boeing.
Thompson said the Defense Department is less concerned about issues raised by El Segundo, Calif.-based Space Exploration Technologies. The startup rocket-launch company sued Lockheed and Boeing last fall, claiming that the joint venture would create a monopoly and hinder its ability to grow.
In response to such concerns, Krieg said he desires competition, “but it’s got to be competition for which there is real competition.”
Lockheed and Boeing are proposing to combine their government rocket-launch operations to cut costs. United Launch Alliance would bring roughly 800 jobs to Colorado. It would be based at Lockheed’s Waterton Canyon plant in Jefferson County.
If the venture isn’t approved, either Boeing or Lockheed could be forced to shutter its rocket- launch business because of weaker-than-expected demand for commercial satellite launches, Thompson said.
“There just aren’t enough buyers out there to keep two families of rockets going,” Thompson said.
Marco Caceres, an aerospace analyst with Fairfax, Va.-based market-research firm Teal Group, said Boeing would be more vulnerable because its commercial business is weaker than Lockheed’s.
But Caceres said he expects regulators to ultimately approve the alliance because Lockheed and Boeing’s launch vehicles “are too important to the national security of this country.”
Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.
