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Commercialization

GenCorp (Aerojet) Is Buying Rocketdyne

By Keith Cowing
NASA Watch
July 23, 2012
Filed under ,

GenCorp Enters into Definitive Agreement to Acquire Pratt & Whitney Rocketdyne from United Technologies Corporation
“GenCorp Inc. (NYSE: GY), headquartered in Sacramento, California, announced today that it has signed a definitive agreement to acquire Pratt & Whitney Rocketdyne (PWR) from United Technologies Corporation (NYSE: UTX) for $550 million. “We see great strategic value in this transaction for the country, our customers, partner supply base and our shareholders,” GenCorp Chief Executive Officer Scott Seymour said. “The combined enterprise will be better positioned to compete in a dynamic, highly competitive marketplace, and provide more affordable products for our customers.”

NASA Watch founder, Explorers Club Fellow, ex-NASA, Away Teams, Journalist, Space & Astrobiology, Lapsed climber.

10 responses to “GenCorp (Aerojet) Is Buying Rocketdyne”

  1. Christopher Miles says:
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    Let’s See

    Step 1
    Aerojet gets Gene Goldman from MSFC in Huntsville

    Step 2
    Then a Winner in the new (Alabama delegation supported!) Senate Launch System (Surprise!)

    Step 3
    Then Buys Rocketdyne for more full portfolio/patents/engineers.

    Step 4- Profit!

    GenCorp (Aerojet parent) Stock goes up 12% in one day 7/23/12 (52 Week high… 2.5 million shares exchanged- on an overall down market day)

    You know, it’s starting to seem like 

    1) The game is rigged
    2) Players no longer care to hide that it’s rigged.

  2. mmeijeri says:
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    Glad to see this confirmed. Any ideas on the prospects of a merger with ULA? I imagine Boeing and LM aren’t going to be interested in this unless / until Orion and SLS are canceled, but once that happens they might be. As for the FTC, now that SpaceX has its own equivalent of the ELC in CRS, possibly expanded by commercial crew, there may not be much of a reason to be against this. If anything, it could increase efficiency and competition.

    • Steve Whitfield says:
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      mmeijeri,

       I don’t think ULA will wait for the SLS/Orion circus to parade by before initiating their moves, if they’re interested. With a (relatively) small investment of $550 million, which they can presumably do right now, ULA will have a foot firmly planted in the doorway, and be part of whatever actually comes to pass. But, they’ll already have something, relatively speaking, under their belt when the clock starts ticking again with a new proposal(s) put into place. ULA will have a seat at the table, will already have anted up, and will be waiting for the rest of the players at the table to either fold or show their hands. This doesn’t put the little guy (ULA) in the Driver’s seat, but does plant him firmly in the driver’s lap, where he can potentially affect the driver’s actions.

       Then, with a little planning, and a willingness to be a more accommodating service provider (a situation that they’ve pretty much been forced into, anyhow), ULA may well find itself in the enviable position of providing the Ford F-150 pick-up truck of space, second only to the Delta II for cost and versatility. That would be a golden ring very much worth reaching for, in my opinion.

       Steve

      • mmeijeri says:
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        Sadly, I don’t think their corporate masters (Boeing & LM) will allow this.

      • no one of consequence says:
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        Sorry Mr Steve,

        ULA is a camel of a company. Corporate is in a straightjacket. They don’t make such decisions. Best they can do are things like ACES … note that didn’t catch fire.

        Rocketdyne and Aerojet exist separately because they don’t have to have on the books all of the stuff of the engine firms.  Its outsourced. Intentionally. Involves byzantine deals, like the fact that fat SSME contracts underwrote EELV engines, so when they went away, those EELV engines became “fully burdened”.

        So how do you put the cost genie back in the bottle? No one knows.  Where are the markets and capital for reinvestment to do so? Where’s the brilliant gen-Y businessman to out Musk Musk in attempting it? These are what it would take.

        Congress fighting to keep SLS going has a paradoxical effect here, allowing for  “Return of the Mummy” monster solids in the form of Liberty, but too much instability for Rocketdyne to get a high valuation (it’s half!). More to come here too. They are the source of the problem because reinvention might, with the “law of unintended consequences” undo more deals ala “commercial space”.

        So the zombies are out stalking in the meanwhile.

  3. SciFiFanLA says:
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    When Boeing acquired Rocketdyne it acquired Santa Susana and the Laser projects.  Niether of these were sold to P&W.  When P&W decided to sell Rocketdyne, it decided to keep the highly valuable Canoga Campus (Warner Center area) as well as it transferred the West Palm Beach campus to Sikorsky.  Both of these properties are not part of the sale.  The point is that with each sale, the scope has been different so it is hard to compare.
    Rocketdyne has also developed an energy portfolio that was not really part of the Boeing entity as it just recently started to pay off.

    In terms of value, Rocketdyne is still the only company in the US that can develop a rocket engine from scratch.  With Rocketdyne you do get the IP, intellectual capital and staff that know how to get the job done.  Hopefully the new owners enable Rocketdyne to effectively compete in the ‘new space’ market.

    • no one of consequence says:
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      … Rocketdyne is still the only company in the US that can develop a rocket engine from scratch.

      Uh … SpaceX Merlin? Or did Rocketdyne do that while do one else was looking.

      You’re overselling. Rocketdyne has an amazing heritage. IP, and skills. Not the best run unfortunately (and not its fault but Congress’s).

      add:
      You’re in denial. Right now the American experts in KeroLOX engines is SpaceX. Because they design, build, test, and fly them. Duhhh.

      • SciFiFanLA says:
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        While I am not trying to take away from all that SpaceX has accomplished, it would be a stretch to say that they developed the Merlin engine in-house.  From pumps designed by Barber-Nichols Inc. (which had heritage to old NASA designs) to multiple FOIA requests to others like Rocketdyne, SpaceX is using available information to make it work.  In my opinion this is the right thing to do.  A commercial company like SpaceX should take advantage of all available information and designs.  They just need to make sure they are not claiming that they could design an engine from a clean sheet without this external source of information.

  4. no one of consequence says:
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    Ah yes Rockwell International, “Where science goes out of business”. The long saga of Rocket Dying …

    Bear in mind that companies that depend on big, volatile, government contracts … lead a charmed life. Those out of the mainstream … doubly charmed.

    Rocketdyne and Aerojet have limited markets for goods and services, this makes them vulnerable to valuation issues, so sustaining revenues from, say, Shuttle SSME rebuilds (or say an energy business) provide a continuance of revenue – no surprise that when Shuttle concluded w/o any follow-on, Rocketdyne got sold.

    ATK has seen better days too, but given military solids and weapons systems continuance, they’ve got a lock on a much smaller concern. Likewise, they need those RSRMB’s flown to not have to shrink down, but its hard these days. Because even if they do fly them at market rates (against keroLOX competition), they wouldn’t make enough to fill the Shuttle “hole”.

    It all gets back to why SpaceX was founded – Musk couldn’t get launcher or engines because of absurd pricing, when you’d expect ridiculously cheap “government surplus”. It turned out to be cheaper to build everything from scratch, in house.

    Once that is done, it undercuts price supports in the industry. This affects everything, because pricing of government contracts isn’t rational, nor can be rationalizable in the short term.

    Note that Aerojet has competed against ATK in solids, but ATK has to go to EADS for a liquid engine. Perhaps with the third in a row following SLS cancellation – they could bid on the whole thing in house? It would be the only way to get certain costs down.

    But what we are looking at is the “old rocket shop”  here. On a going forwards basis, you can’t do business like you used to do. That’s missing from all of arsenal space – the necessary and long overdue reinvention.