Lockheed Martin Corp. and Boeing Co., the world’s biggest defense contractors, completed an alliance to combine their businesses for launching U.S. government rockets, uniting the two largest players in that market.
The alliance, announced in May 2005, will be based in Denver and help the two companies to cut costs for launching rockets, they said today in a statement. They’ll assemble the rockets at a plant in Decatur, Alabama.
The alliance will make Colorado the second largest space economy in the nation behind California, according to Tom Clark, executive vice president of the Metro Denver Economic Development Corp.
The agreement succeeded after months of complaints from rivals such as Northrop Grumman Corp., which said the alliance’s size would limit competition in the sector. The companies agreed not to overcharge rivals for access to rocket technology to win approval from the Federal Trade Commission for the venture.
The FTC, which agreed that the venture would create a monopoly in production of medium to heavy rockets, said in October that the “unique national security benefits” of the combination outweigh the loss of competition.
When the companies announced the plan last year, they projected the venture, named United Launch Alliance, would save the U.S. government $100 million to $150 million annually.
Denver Post Staff Writer Kelly Yamanouchi contributed to this report.
