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Rocket joint venture could result in layoffs

December 02, 2006|From the Associated Press

WASHINGTON — A venture between Lockheed Martin Corp. and Boeing Co. to supply the government with launch services for rockets could lead to layoffs, the companies said Friday.

Michael Gass, chief executive of the newly formed venture, said in a conference call that the exact number of job losses had yet to be determined. "There is no specific target."

The Federal Trade Commission reluctantly approved the venture last month, saying national security needs expressed by the Pentagon trumped concerns that such a partnership could create a monopoly.

Rather than having a contract awarded to one of the two major domestic suppliers of medium and heavy rockets, a 50-50 partnership, dubbed the United Launch Alliance, was proposed in May 2005.

The venture, which initially will involve 3,800 employees, is not precluded from becoming a publicly traded company, Gass said. The companies expect the venture to save the government about $150 million annually.

ULA will consolidate operations, production, engineering and launch tests of the Boeing Delta and Lockheed Atlas rockets expected to be completed in two years.

ULA's headquarters will be in Denver. ULA representatives will meet with employees in Huntington Beach, Decatur, Ala., and Denver. They also plan to meet with other employees in Harlingen, Texas, and San Diego.

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