Rocket deal may end in job cuts

WASHINGTON — A $1.06 billion joint venture between Lockheed Martin Corp. and Boeing Co. finalized Friday to supply the U.S. government with launch services for rockets could result in layoffs, the companies said.

In a conference call with reporters Friday, Michael Gass, chief executive officer of the newly formed venture, said the exact number of layoffs or when and where they might occur has not been determined.

“There is no specific target,” Gass said.

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

Rather than award the contract 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 proposal was aimed at ending a long-standing dispute over who would get the contracts.

Both defense contractors contend the deal will provide the government with reliable, low-cost launch services. The venture, which will initially involve 3,800 employees, is not precluded from becoming a publicly traded company, Gass said. The companies say the venture is expected to save the government roughly $150 million annually.

The venture will consolidate operations, production, engineering and launch tests of the Boeing Delta and Lockheed Martin Atlas rockets expected to be completed in two years. Operations will be headquartered in Denver.

Current plans by ULA include consolidating technical and program management operations in Denver, production operations in Decatur, Ala., and additional launch site operational consolidation.

Representatives from ULA plan to travel next week to facilities in Huntington Beach, Calif., Decatur and Denver to meet with employees. Company representatives also plan to meet with employees at Harlingen, Texas, and San Diego, Calif., soon.

Personnel requirements and other consolidation activities are under review by the ULA, said Dan Beck, a spokesman for Boeing Co.