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Rocket venture green light

Boeing, Lockheed get draft consent to merge launch work

Roger Fillion, Rocky Mountain News

Published June 20, 2006 at midnight

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The federal government has signaled it's prepared to approve Lockheed Martin and Boeing's joint rocket-launch ventures.

The two companies said the Federal Trade Commission - after a lengthy antitrust review - handed over a draft agreement giving the duo the green light to merge their rocket operations.

Executives at both companies are studying the document, which spells out terms and conditions for the marriage.

"It's a very positive development," said James McAleese, president of McAleese & Associates, a defense law firm in McLean, Va.

"Now the only issue is timing," he said, referring to when the merger - first announced in May 2005 - would get the final thumbs up.

Defense analyst Loren Thompson of the Lexington Institute in Arlington, Va., said, "This deal is going to go forward."

The venture, known as United Launch Alliance, would be headquartered at Lockheed's campus in Jefferson County, where administrative and engineering activities would occur. Lockheed's Atlas rocket-making operations would be transferred to Boeing's facilities in Alabama.

ULA would launch satellites for Uncle Sam. It's projected to bring 750 to 1,000 new high-paying jobs here.

The companies have said ULA would save the government up to $150 million a year on launches of military, spy, weather and research satellites.

The merger would allow the two companies to eliminate duplicate operations and facilities.

The FTC and the Air Force have been reviewing the proposed merger.

"The FTC presented us with a draft copy of the consent order. We and Boeing are in the process of reviewing it in detail," said Lockheed spokesman Tom Jurkowsky. "We'll provide our comments to the government."

Jurkowsky declined to disclose specifics about the document, which was relayed to the companies on June 8.

The Lexington Institute's Thompson said the companies "are inclined to go ahead, as the government has been for a while."

But he added: "The companies are still arguing at the detail level that they shouldn't be overburdened with requirements that undercut the business case."

Dow Jones Newswires reported Monday the draft FTC consent order, among other things, spells out antitrust safeguards for satellite makers such as Northrop Grumman.

Northrop has wanted federal trustbusters to impose protections to ensure it won't face hurdles getting its satellites launched for the government. Lockheed and Boeing make government satellites, too.

The proposed joint venture allowed Lockheed and Boeing to put on hold a potentially costly court case.

The Air Force had suspended Boeing from government satellite launches for 20 months after the defense contractor illegally obtained thousands of Lockheed rocket launch documents. Lockheed, in turn, sued Boeing.

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