Lockheed in ‘late stage negotiations’ with unnamed solid rocket motor supplier: CEO

WASHINGTON — Lockheed Martin is in “late-stage negotiations” apparently to stand up a new supplier of solid rocket motors, Chief Executive Officer Jim Taiclet revealed today, though he offered few details.

With the solid rocket motor industrial base dominated by two key players — Orbital ATK and Aerojet Rocketdyne, both of which have been acquired by larger firms — Lockheed is looking to bring on a brand new vendor to broaden the industrial base, Taiclet told lawmakers during a House Armed Services Committee hearing. He did not identify the company in question.

“We are endeavoring, as Mr. Schimpf’s company, to create another supplier,” Taiclet told lawmakers. “We’re in late stage negotiations with a company that can actually pull this off, we believe.” The Lockheed exec was referring to fellow panelist Brian Schimpf, CEO of Anduril whose company just acquired Adranos, a smaller solid rocket motor supplier.

The Defense Department has eagerly pursued solid rocket motor production, which is critical for propelling weapons like the Stinger missile that have been used extensively in Ukraine. To that end, the Pentagon has also invested in Aerojet to boost its production, with a nearly $216 million award in April geared toward expanding that company’s facilities in Alabama, Arkansas and Virginia. 

Beyond the identity of the company, it’s also not clear what the terms of the deal with a new supplier might be. For example, Lockheed invests in certain companies through a ventures portfolio, and it’s unclear whether Taiclet was referencing a partnership or a wholesale acquisition. 

The company’s chief operating officer previously told Defense One that the aerospace giant is “actively investing and looking to partner to begin standing up another source for solid rocket motor production” and that a request for information had received responses from both American and international companies. A spokesperson for Lockheed declined to comment on Taiclet’s remarks to Breaking Defense, citing the company’s upcoming earnings call in October.

Lockheed previously tried to buy Aerojet, but the company eventually abandoned the deal after regulators balked due to antitrust concerns. L3Harris ended up as Aerojet’s new owner in July after the Federal Trade Commission informed the company it wouldn’t stand in the way of its proposed $4.7 billion acquisition. 

After L3Harris’s acquisition, Lockheed pushed for assurances from L3Harris that it would commit to keeping Aerojet as a merchant supplier, according to the Defense One report. Speaking during the Jefferies Industrials conference earlier this month, L3Harris CEO Chris Kubasik said the company hadn’t signed any formal agreement to do so, though he pledged Aerojet would still be a merchant supplier under new ownership.

“We have existing contracts that we’ll honor. We did not sign any kind of consent agreement. I did give assurance to the Department of Defense that Aerojet Rocketdyne, L3Harris would remain a merchant supplier, providing rocket motors to every[one] and anyone in the world that can legally buy them,” he said. 

The other major solid rocket motor producer, Orbital ATK, was purchased by Northrop Grumman in 2018.