Is GenCorp (Aerojet) Buying Rocketdyne?
United Tech in talks to sell Rocketdyne to GenCorp, Reuters
“United Technologies Corp (UTX) is in final discussions to sell its Rocketdyne business to GenCorp Inc (GY), a maker of aerospace propulsion systems, two people familiar with the matter said on Wednesday. The deal, which may come late this week or early next week according to one of the sources, represents part of the diversified U.S. conglomerate’s efforts to divest non-core units and focus on closing its $16.5 billion acquisition of aircraft component maker Goodrich Corp (GR).”
Keith’s note: GenCorp is the parent company of Aerojet.
Wonder if the FTC will go along with this?
My problem with this venture is the resulting company AeroJet + Pratt & Whitney + Rocketdyne puts the greater part of the nation’s public and private liquid rocket engine manufacturing business under one roof, and all that goes with that.
Is that wise? Does it run aground on anti-trust laws, which were first instigated in Rome in 50 B.C. in the public interest and culminated with the Sherman Antitrust Act of 1890 with the rise of the robber barons here in the US ? Teddy Roosevelt busting up Standard Oil comes to mind. I’m sorry , but SpaceX building its own Merlin engines in-house is not enough of an offset to the conglomerate proposed here. The resulting company would not technically be a monopoly , but it sure as heck would be monstrously monolithic , and not necessarily in the best interest’s of the nation as the global space effort multiplies exponentially.
I have to agree that The Powers That Be will have to look very carefully as to whether Aerojet and PWR having the same parent company would necessarily be in the public interest.
Please keep in mind the changes affecting the military industrial base as a whole.
The origins of what you are seeing now started before the Shuttle, and went wrong with a misguided attempt to amplify industry with a bunch of bad forced mergers in the 80’s by an idiot known as Casper Wienberger. The idea was to force create overly large monolithic defense primes under the theory that they’d sluff off the crap, modernize, and use scale to advantage.
Instead they institutionalized crap, locked out attempts to modernize, and scaled up lobbying to avoid the very effects that were ment to reform them.
So be careful in how you wish to preserve capability. Too much/many attempts have saved the wrong things, such that its hard to even separate gold from dross.
With COTS you have seen different alternatives to doing this – Kistler (fail) was to outsource to primes best skill at component assembly (too heavily front loaded cost model) and do final assembly/test/operation in house (never finished assembly ran through billions – bad capital utilization). Orbital is trying “highly selective” outsource (foreign) to attempt better cap util and more efficient final assembly/test/operation (they’ll soon test/operate). SpaceX does vertical mfr/test/ops all inhouse reusing same staff, accepting losses of non-optimality in order to increase high internal reuse, which means they self limit scope (basis of advantage) to compound advantage of this approach.
Both Rocketdyne and Aerojet presumed cold war economics and business structure – very inefficient. Just like having Atlas, Delta, and Titan were.
Ask yourself this – what role does an “evolved” “arsenal system” require from liquid fuel rocket engines? Is is an industry component or is it a vehicle component? Different economics.
In the name of capablity and to protect their interest they buy each other out, sounds like good for them bad for us the consumer or tax payer. Smells of to big to fail banks to me. I didn’t understand your last sentence Mr. C industry or vehicle ???
Cold war economics equals gravy train???
Do their engines work better than Kero meaning cheaper and easier to use?
And what part should ATK solids place in arsenal space?? Are these guys in fear of Kero cheap falcons?
Hard to completely follow without enough background
Concept of “national security” is the root issue.
WWII model was of industrial capacity and capability. So you refined weapons systems to the necessary level (capability) , then scaled (capacity).
Cold war meant taking this a step further – deriving new, greater derivation to exceed prior limits. This could be done by evolving tech (slow) or brute forcing it (fast). This is where “cost plus” really counted. And where economic expansion and industrialization mattered.
This is also why Eisenhower came to fear the “military industrial complex”. That you might become dependant on a “cost plus” addict, and possibly be driven in a “fear culture” to overbuy and be taken advantage of.
Which is exactly what happened with Saturn, Shuttle, and all subsequent arsenal space projects.
With WWII model, you didn’t build things that wouldn’t fit in more than one place, thus the economic effort was not dependant on any single weapons system – the fear was in being suckered into a deadly situation in “total war” conversion of an economic system. However, with the “cold war model”, we removed this restriction, to be able to “win at any cost”. Which, if you are “top dog” economically sometimes you can do.
If its an industry component, you want the WWII rules mentioned. Especially if you’re not biggest economy.
Merlin engine is an example of a vehicle component – part of are third model of “economically justified competition”. Possibly in competing with a economic superpower, one needs to be even more disciplined than the WWII model, where the fear is not just of waste for a “total war” economic conversion, but the desire to hold 5x-1,000x economic advantage of “think differently” that changes the playing ground.
Because its not the WWII industrial base, or “arsenal system”s going “mano a mano”, it’s economic advantage only that matters in that manner.
Cold war economics equals gravy train???
What Eisenhower feared. How he interpreted the “capitalist would give the rope to hang themselves”. E.g. that we’d be paniced into a false arms race for hawkish appearing industries to get rich selling the wrong weapons. And then we’d not be able to afford the right ones. E.g. we’d be conned into playing the wrong game.
Do their engines work better than Kero meaning cheaper and easier to use?
First, in what context? Answer these questions:
1. Are we playing the right game?? Apollo/Shuttle – overwhelm and devastate in the sprint. Or frugal perpetually for the long run reusable, incremental growth that we can do indefinitely without sweat, possibly through a more modern tech/business model.
2. Do we have the right goal? Billions for two guys to play poker in a shed on the Moon to “claim” it. Or a EML 1/2 station, temporarily active when we’ve geared up an “beyond earth” mission, otherwise powered down consuming relative pennys of resources waiting for the next surge.
Now chose policy to support what you want to do. Yes on one case, no in the other.
And what part should ATK solids place in arsenal space?
Solids can be made cheaply to loft non HSF payloads like warheads. They are super expensive for HSF because of hundreds of issues (some still not addressed). Which is why they are lying through their teeth about making things cheap on Liberty.
This is the “bait and switch” that gets the taxpayer. Suckered as cheap, then “oops, need more bucks”.
Are these guys in fear of Kero cheap falcons?
Yes – because it eliminates their profit margin.
Helped thanks Mr. C!
Mr. Mc goo
“capitalist would give the rope to hang themselves”
Mr. C,
Eisenhower feared this, but it didn’t stop him from using it himself. I’m Canadian and I remember well how Eisenhower and his industrial sidekicks came to Canada and sold Prime Minister Diefenbaker a bill of goods about joint defense “over the pole” against the USSR for the purpose of selling Canada US missiles and killing the Avro Arrow, the most advanced fighter jet of the time by far, because nothing in the US could match it. Eisenhower then walked away from the proposed treaties after having destroyed one of the most remarkable aerospace capabilities of all time. The irony in this is that many of the first rate Canadian aerospace engineers, having had their futures destroyed and no jobs in sight, ended up in the US in important engineering jobs on Gemini and Apollo.
Steve
I remember the Arrow – it scared American designers and businessmen cold. And I met many that worked on it and heard the stories. Also, my NACA/NASA mentor worked on fighters, discovering surprises in them.
Not US or Canada’s finest hour in how that worked out. However there were many of us in the US that wanted the Arrow to succeed. It was the best at the time.
My read FWIW was that it was a botched negotiation for access, and ended up with a capitulation. Which was a mistake for both the US and Canada. Arrow should have succeeded, the US companies should have partnered with Avro, and both should have fielded the Arrow.
The effects of “fear culture” dominated.
An example of another “SpaceX” like near miss. There are hundreds.
It doesn’t matter any more. The current regime could care less if the nation loses its strategic high performance liquid propulsion design and production capability, they just don’t want a foreign entity getting hold of it.
Great news about Aerojet if it’s true. I’d been hoping for that. And
let’s hope that contrary to earlier rumours Griffin and friends will
turn out not to have anything to do with it at all.
The Reuters report just mentions Rocketdyne, not P & W, as being for sale. Unless UTC is willing to sell Rkd cheap, it’s not likely to happen.
Whatever the outcome, it’s probably just a matter of time before Boeing tries to buy the whole works, like they’ve done with the rest of the former aerospace companies. Monopoly only becomes monopoly when the competition’s big shareholders raise objections.
Steve
Boeing are the ones who sold Rocketdyne to P & W in the first place.
mmeijeri,
Good point; I hadn’t realized that. But then again, are they likely to let that stop them in their plans to rule the galaxy? Perhaps I exaggerate, somewhat. It’s a weakness. I’m working on it. Seriously, though, I do often imagine a day, not too far off, when there are only two US aerospace companies, which between them own everything that currently exists in the industry.
Steve
Who did Howard Hughes fight with was it Pan Am or Boeing???
Seems history just repeats itself.
Sure hope Elon is good with his sling.
It started with David and Goliath.
Well that’s the first one I remember anyway.
We have a choice
Congress and public Space or THE COMPANY!!!!
Got to go need to pick the Tomatos so I can eat. lol
Boeing had no intentions of doing a SpaceX ever.
How EELV’s are done financially is cynical about component cost and flight rate. In fact, if they made any mistake at all, it was in the misconception (likewise ATK/Thiokol) of too great a flight rate. The business opportunity was to address America’s national launch services, knowing that they’d get a monopoly business for 40+years.
In this mindset, you want optimal components for low flight rate, because every single one has to work, to keep that monopoly. Or so was thought.
Boeing almost got it all too … except that they got caught cheating. And .. because on close examination, Lockheed’s Atlas was far better in certain respects. ULA emerged as the Hobson’s choice, because of the need to maintain improper subsets.
Consider EELV’s as the height of the arsenal space art of refined components/designs/processes/operations. It is an uncompromising art. Yet SpaceX is all about the art of careful compromise, in contrast.
BTW, Atlas V has just been anointed officially as NASA’s choice for HSF EELV. No surprise.
To do something like a SpaceX, you really have to start from scratch. Don’t look at Rocketdyne or Aerojet as sources of SpaceX wannabes.
Mr. C,
I agree with your analysis. I wasn’t think of vertical integration, but rather plain old Cold War business tactics and diversification, which is where I think Boeing management still lives. My personal take on Boeing (strictly my opinion) is that they’ve long been doing part of their risk management by doing their best to control contract conditions — before the fact. This means that, among other things, they try to maintain maximum control over precedents and the industry subcontractors. The easiest, and probably cheapest, way for Boeing to control the subs is to “own” them, one way or another. In the big picture, making one of your owned subs lose 50 cents last year so that you can make $100 is perfectly acceptable. But, the working class people from the subs too often get screwed (during acquisitions and afterward) through job loss and salary/wage holds, because their division “didn’t perform.” From the Board of Directors’ perspective, this is all good stuff, perfectly acceptable behavior. And so the rich get richer, etc., while the national economy continues to bleed. I may be clued out here, but I suspect that this sort of corporate behavior contributes as much to the plummeting economy as do bail-outs and failed investments. And yet, Congress continues to contribute to these corporate tactics and the resulting contracts, all in the name of being the toughest kid on the block. Welcome back to the 20th century.
Steve
Steve,
Seems even here it is assumed it’s THEIR NASA not OURS. As you said it’s about people.
Marc,
At the time I wrote this, I was away from the Internet and had forgotten or missed who had written the pole. So my thoughts are just what they are.
Doesn’t your survey stated like it was assume that we have no influence and are in fact only here to Helplessly WATCH!
6348 people responded to this pole thats some say so I think?
Anyway I answered who I thought SHOULD be funded, and if any NASA leaders do read your pole before they decide I would want them to know what I/WE think!
Just trying to help
George H. Worthington IV
Keith if you think this is an important idea please ask your readers. Or ask the survey writers to do another one!
The dangers of surveys
The other day a survey of the CCiCap down select was provided on NASA watch.
What was the question?
Who Will get funded in the next round of CCiCap
Shouldn’t the question have been
Who do you think SHOULD get funded in the next CCiCap
Many people said that they chose who they think will be selected NOT who they think SHOULD be selected!
Isn’t it possible that the people that make the selection may use this survey to justify their dumb choice!!!!
Maybe we just get the poor management we expect.
Spin doctor
Whoever wrote the survey didn’t really want our opinion did They???
They were either very smart or just were not thinking.
Maybe another survey with two questions might be a good idea
What do you think?
Lol I Win!!!!!, I was right!!! I knew NASA would fund their budget busting buddies yea!!!! Lolol
Question
How many of you answered who you thought NASA would fund and NOT who you thought should get funded!!
Lol Joe Q feeling pushed around by THEM again!!! Lolol
Keith, Do our opinions/votes matter or not????
Steve,
You ever feel like you are just in the middle of the herd and it is being funneled to the slaughter house and if you don’t do something like jump the fence THEY got you! Lol companies buying out others. Surveys that assume we are helpless. Where is that fence I need to get out of here lol!
Just another Joe Q
George,
I think we all know that feeling. The catch is: the herder is at the gate; his boss is waiting on the other side of the fence; and his boss is back at the barn, on the phone to the well-connected Board of Directors; and so on. So, jumping the fence turns out to be just a risk at banging something valuable.
Steve