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Rocketdyne Powering Down as Flow Of Space Projects Slows to a Trickle

Rocketdyne Powering Down as Flow Of Space Projects Slows to a Trickle

By BRAD SMITH

San Fernando Valley Business Journal

The largest aerospace employer in the San Fernando Valley, one of the largest remaining manufacturing companies in Los Angeles, may shut down local operations entirely by the end of the decade.

The business case for Rocketdyne Propulsion and Power, a division of the Chicago-based Boeing Co, may face “a cliff” as early as 2009 unless there are substantial changes in how the federal government deals with the aerospace industry, said Byron Wood, the division’s vice president and general manager.

Rocketdyne designs and builds engines for the Space Shuttle and the Delta II and Delta IV satellite boosters, along with other products that generate an annual payroll of $320 million and a purchasing budget of $140 million for Los Angeles-area vendors. It employs 3,000 people at facilities in the Valley and in Ventura County.

“We’ll be making Space Shuttle main engines and the (Delta IV’s) RS-68 for as long as those programs are around,” Wood said. “The SSME will last at least until 2010, and maybe beyond, and the RS-68s, I think the government will stick with (the Delta IV) until at least 2008-09.”

But Wood, a 41-year Rocketdyne veteran who expects to retire within two years, is blunt about the company’s prospects absent change.

“I look at somewhere between 2009 and 2010 as when the cliff might hit,” he said.

The problems facing the space propulsion industry mirror those that have led to huge realignments across the entire U.S. aerospace business in recent years: increased competition from European and Asian manufacturers, shifting U.S. government priorities, and an American aerospace industry with infrastructure that dates back to the Cold War.

The same business pressures that led to the disappearance of such venerable names as McDonnell-Douglas have hit the rocketry sector as well; the difference is the three major engine manufacturers Rocketdyne, Hartford, Conn.-based United Technologies Corp.’s Pratt & Whitney subsidiary and Sacramento-based GenCorp Inc.’s Aerojet division are part of larger corporations.

That has led to widespread anticipation that the number of engine manufacturers will be reduced, either through a merger and acquisition or a joint venture involving one or more of the current suppliers.

Proposals for such action and rumors about the major players have been widespread; in 2000, Aerojet and Pratt & Whitney announced a joint venture, but that deal later fell through.

In recent weeks, Rocketdyne has been the subject of similar speculation, in part because of statements Wood has made before the Presidential Commission on Space Exploration and at an industry conference on space propulsion.

Wood has suggested a national space propulsion effort that would involve the federal government, academia and the manufacturers.

Wood said the lack of consistent policy from Washington has led to unwillingness by corporations to bankroll the propulsion divisions. That, in turn has diminished the industry’s ability to ramp up for any new project.

In order to reduce some of those fixed costs, Rocketdyne has cut its workforce and is selling off much of the existing infrastructure. Parts of the landmark factory in Canoga Park have been sold for redevelopment, and the company is in the middle of moving most operations from the Canoga property to a nearby plant called the De Soto facility.

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