Lockheed Martin cancels merger with Aerojet Rocketdyne
Capitalism in space: Faced with a lawsuit from the Federal Trade Commission (FTC) opposing the merger, Lockheed Martin yesterday announced that it is terminating its effort to buy Aerojet Rocketdyne.
Aerojet released a press release at the same time, insisting that the company remains viable and healthy, but there are doubts. While its rocket engines (its main business) remain technically reliable and well-built, they are relatively expensive. Moreover, the shift by rocket companies to build their own engines in the last decade has reduced its customer base significantly.
This loss of market is now compounded by a battle between two factions on the company’s board of directors.
While monopolies do not encourage competition, the merger with Lockheed Martin would have been mostly good for the rocket industry. It would have quickly given Lockheed Martin the skills to make rockets, and kept Aerojet Rocketdyne alive, albeit as part of another company. Now the latter faces extinction, and the former will need more time to develop the capabilities required in its recently-won NASA contract to launch a rocket from Mars to return samples.
And once again, the FTC lawsuit indicates that the Biden administration has decided to take a heavy-regulatory hand when it comes to business. The result however of this approach in this case has not produced more competition, but the likely bankruptcy of at least one company.
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Capitalism in space: Faced with a lawsuit from the Federal Trade Commission (FTC) opposing the merger, Lockheed Martin yesterday announced that it is terminating its effort to buy Aerojet Rocketdyne.
Aerojet released a press release at the same time, insisting that the company remains viable and healthy, but there are doubts. While its rocket engines (its main business) remain technically reliable and well-built, they are relatively expensive. Moreover, the shift by rocket companies to build their own engines in the last decade has reduced its customer base significantly.
This loss of market is now compounded by a battle between two factions on the company’s board of directors.
While monopolies do not encourage competition, the merger with Lockheed Martin would have been mostly good for the rocket industry. It would have quickly given Lockheed Martin the skills to make rockets, and kept Aerojet Rocketdyne alive, albeit as part of another company. Now the latter faces extinction, and the former will need more time to develop the capabilities required in its recently-won NASA contract to launch a rocket from Mars to return samples.
And once again, the FTC lawsuit indicates that the Biden administration has decided to take a heavy-regulatory hand when it comes to business. The result however of this approach in this case has not produced more competition, but the likely bankruptcy of at least one company.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
Bob,
Do you think this would impact Lockheed Martin’s ability to deliver on the recently announced Mars return rocket? Were they buying Aerojet Rocketdyne to get the expertise in engine building which they (Lockheed) lacked?
Gary: Read my post again. I clearly indicated that I do think it will have an impact.
It’s been a long road for Aerojet-Rocketdyne.
(the period 1990 to present feels a bit chaotic)
https://www.zippia.com/aerojet-rocketdyne-careers-269/history/
Bob,
Pardon my inattention. Clearly, you did address. I should just read to the end!
Thanks
Although not a big fan of LM. It seems grossly unfair to allow Northrop Grumman to gobble up ATK-Orbital but then prevent LM from acquiring AJ-R.
As pointed out, while there are an emerging number of small companies building launch vehicles with their own internally developed engines, if AJ-R goes under this seriously hurts the defense side of rocket motor use, especially solids and some unique air breathing applications.
“The result however of this approach in this case has not produced more competition, but the likely bankruptcy of at least one company.”
Which of course is their intention. Don’t you get it? The capitalists who own AJR and LM are the enemy! We must destroy them and their wealth so all are equally poor and miserable, that is the Left’s program. That’s what they mean by equality and ‘”equiy”
Or could it be as simple as family connections?
Back in the 70s (college), I dated a daughter of the Northrup Family, did not know who she was until I met her parents one weekend. The family was tight with the DuPont Clan of Delaware….. (who also sent generation after generation to the same college)……..so could it be just that easy ????
Interesting,. According to Spock ???
“We must destroy them and their “wealth so all are equally poor and miserable, that is the Left’s program.”
Maybe time to light some candles, rather than curse the darkness.
Blair, the Climate Change Cult is working to make lighting candles the only option, where we used electricity before. They should support your suggestion … but I don’t think they will approve of your candles.
But while we are lighting them, let us also emulate the “fluidity” of the velociraptors in Jurassic Park, and “find a way” (many ways) to work around our hubris-soaked elites as their hubris leads them to be overtaken by events and fail … being ready to render them irrelevant to our lives when the opportunities to do so arise.
The discussions that I keep hearing about this merger/non-merger are centered around space flight rocketry. However, military defense rockets and motors are probably driving the FTC decision making. AJR makes all kinds of motors for defense applications, including air-to-air missiles, air-to-ground missiles, cruise missiles, hypersonic missiles, and ballistic missiles (sea and land based). Pretty much all defense contractors purchase their motors from AJR. Giving control of these products to a major defense contractor (Lockheed) will create a monopoly and drive up costs for the remaining buyers. In the end, the potential cost increases will be shouldered by the government and ultimately by the taxpayers.