Aerojet’s advanced manufacturing facility in Huntsville, Ala. (Aerojet Rocketdyne)
WASHINGTON — With L3Harris officially the new owner of Aerojet Rocketdyne, the man in charge of running the newly absorbed business unit is diving into the details of their new acquisition — optimistic that the missiles and munitions market could be an area of serious growth for one of the largest defense companies in the world.
“Something that we’re very committed to is [that] we view Aerojet Rocketdyne as an entry into [the] missiles and munitions market, an area that L3Harris didn’t have a footprint. And this is a fantastic opportunity for us to have an immediate place in that,” Ross Niebergall, the newly installed head of Aerojet, told Breaking Defense in a July 28 interview.
“So our priority, we would love to be the solid rocket motor provider of choice for everyone in the industry,” he said, later adding, “We’re going to be aggressively trying to grow that business and figure out how to increase the competitiveness of what I think of as a fantastic business already.”
However, Niebergall clarified that does not mean L3Harris is looking for further merger and acquisition efforts, at least for now. “In the near-term, we have no interest in further acquisitions. The real focus as a company is on making sure that we can effectively integrate these tremendous assets we have and get them as effective as we possibly can within the L3Harris construct.”
Overall, Niebergall said logistically that it probably won’t be until second quarter 2024 until Aerojet is fully integrated into L3Harris. But top-level changes have already occurred. Aerojet’s board of directors and its CEO, Eileen Drake, have all been dispersed and will not work for L3Harris. A few other top jobs, such as chief financial officer, have also been made redundant, Niebergall said.
However, the presidents of the missile systems and rocket propulsion business units, as well as Aerojet’s head of business development will all be staying in place. And the vast majority of the 5,000-person Aerojet workforce will be staying as well. Those employees, Niebergall emphasized, were a big part of the draw for L3Harris, and the hope is that they will have opportunities to grow as part of the larger organization.
“I think this is a new day, not only for L3Harris — this is going to reshape our company — but it’s especially a new day for Aerojet Rocketdyne,” he said. “We’re bringing in the stability of a larger company, we’re bringing the scale, we’re bringing the opportunities for their employees.”
In many ways Aerojet fits into the L3Harris rubric of being what Niebergall called a “thriving merchant supplier” business working with larger firms.
“We work with all the primes, we provide capabilities. Something like three quarters of our current sectors operate as merchant suppliers, and in many cases, we provide multiple different competitors on the same pursuit. So for us, there’s nothing unique about doing that. And now when it comes to Aerojet Rocketdyne, that’s also their culture.”
One of those primes for which Aerojet is a key supplier is RTX, and there have been concerns from the larger munitions provider that Aerojet has had challenges over the last few years, including a dramatic feud among board members.
“We’ve obviously always been concerned about Aerojet. But I would say some of these things have been magnified by all these external inputs,” Wes Kremer, president of RTX’s Raytheon sub-brand, told Breaking Defense during last month’s Paris Air Show.
“Aerojet has had issues with both their suppliers and their labor, being able to, you know, have trained employees. Building rocket motors is a pretty specialized kind of business that requires not only the safety aspects of that, but there’s a lot of training, and it’s pretty precise types of things that have to be done. And so, the combination of those things has certainly created problems.
“And then I think, let’s face it, there’s been a lot of distractions from activist investors to proxy fights, all of those things. Aerojet is not only an important supplier to us, they’re an important national asset. And so what we want to see is stabilization of that, and [get] dependable deliveries,” Kremer added.
Asked to respond, Niebergall said “in many respects that there is some merit” to Kremer’s comments. “You know, my focus absolutely is to bring stability to this business.” At the same time, he emphasized that many of the challenges Aerojet faced were the same COVID-19 caused issues with supply chains that the entire industry has had to deal with.
“I really see this as a fantastic opportunity to really rejuvenate [Aerojet] and nurture it to become the company we are confident it will become,” he said.
