Lockheed Martin fights request to ease 2018 restrictions on Northrop Grumman’s solid rocket business
A legal fight between Lockheed Martin and Northrop Grumman has broken out over Northrop Grumman’s recent request to the Federal Trade Commission (FTC) to ease a 2018 consent order that restricts Northrop Grumman’s ability to market its solid rocket motors (SRM).
On April 2, Northrop petitioned the Federal Trade Commission to drop a 2018 consent order helmed when Northrop acquired solid rocket motor maker Orbital ATK. The consent agreement requires Northrop to supply SRMs to its competitors in the missile market on a non-discriminatory basis and to firewall its SRM business away from its other operations.
At the time, the FTC believed the measure was necessary due to Northrop’s status as a prime contractor and Orbital ATK’s position as one of only two American makers of solid rocket motors.
Northrop is not a major manufacturer in the American missile space, which is dominated by Raytheon and Lockheed. However, if the order is dropped, Northrop will be able to vertically integrate its solid rocket motor business with any munitions the company designs in the future — including potentially prioritizing SRM supplies for Northrop over competitors, Lockheed stated in a response to the petition.
This consent order has prevented Northrop from marketing its solid-fueled rockets openly. Instead, it appears it forces the company to sell to its competitors, such as Lockheed, who then garners the big profits in marketing them. That order I think has also limited Northrop’s ability to use its boosters for other purposes, such as launching satellites.
Overall it appears this consent order has been very counter-productive, in hindering competition in the American solid-fueled rocket industry. At present there is a shortage of production capacity in the U.S., so much so that the Italian rocket company has moved in to market its own solid-fueled rockets here. In fact, it is selling its rockets to Lockheed and Raytheon, which suggests Northrop is entirely justified in asking to be released from this order.
A legal fight between Lockheed Martin and Northrop Grumman has broken out over Northrop Grumman’s recent request to the Federal Trade Commission (FTC) to ease a 2018 consent order that restricts Northrop Grumman’s ability to market its solid rocket motors (SRM).
On April 2, Northrop petitioned the Federal Trade Commission to drop a 2018 consent order helmed when Northrop acquired solid rocket motor maker Orbital ATK. The consent agreement requires Northrop to supply SRMs to its competitors in the missile market on a non-discriminatory basis and to firewall its SRM business away from its other operations.
At the time, the FTC believed the measure was necessary due to Northrop’s status as a prime contractor and Orbital ATK’s position as one of only two American makers of solid rocket motors.
Northrop is not a major manufacturer in the American missile space, which is dominated by Raytheon and Lockheed. However, if the order is dropped, Northrop will be able to vertically integrate its solid rocket motor business with any munitions the company designs in the future — including potentially prioritizing SRM supplies for Northrop over competitors, Lockheed stated in a response to the petition.
This consent order has prevented Northrop from marketing its solid-fueled rockets openly. Instead, it appears it forces the company to sell to its competitors, such as Lockheed, who then garners the big profits in marketing them. That order I think has also limited Northrop’s ability to use its boosters for other purposes, such as launching satellites.
Overall it appears this consent order has been very counter-productive, in hindering competition in the American solid-fueled rocket industry. At present there is a shortage of production capacity in the U.S., so much so that the Italian rocket company has moved in to market its own solid-fueled rockets here. In fact, it is selling its rockets to Lockheed and Raytheon, which suggests Northrop is entirely justified in asking to be released from this order.
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