Lockheed Martin and Boeing Join Forces in United Launch Alliance

Strategic Insights -

A new partnership between Lockheed Martin and Boeing, announced as the United Launch Alliance, will mark the end of a longstanding rivalry between the two companies in the rocket-launching business. The joint venture, which requires government approval, aims to secure a single contract for launching rockets for the Pentagon and other government agencies. The deal is expected to save the government between $100 and $150 million annually, but critics worry that the consolidation of services could lead to reduced innovation and a lack of technological advancements.

Key Takeaways:

  • The United Launch Alliance will be a joint venture between Lockheed Martin and Boeing, combining their resources to provide launch services for the Pentagon and other government agencies.
  • The partnership aims to end the longstanding rivalry between the two companies in the rocket-launching business.
  • The joint venture will require government approval and is expected to complete the deal by the end of 2005 or early 2006.
  • The consolidation of services is expected to save the government between $100 and $150 million annually.
  • Critics, including Danielle Brian of the Project on Government Oversight, worry that the lack of competition could lead to reduced innovation and technological advancements.
  • Lockheed and Boeing have a long history of working together on various projects, leading some analysts to believe that the merger will not pose significant challenges.

Statistics:

  • The new company will employ 3,800 people, with potential cuts expected in the future.
  • The joint venture expects to save the government between $100 and $150 million annually.
  • The companies have a history of working together on various projects, with joint ventures dating back to the 1960s.
  • The Project on Government Oversight estimates that government contractors often promise savings that do not materialize.
  • 80% of the government's launch services have been provided by a single contractor in recent years.

Sources:

  • Melissa Block, host: NPR feature on Lockheed Martin and Boeing's new joint venture (date not specified).
  • Wendy Kaufman, reporter: NPR News (no date specified).
  • Marco Caceres, industry analyst: Teal Group (no date specified).
  • Tom Jurkowsky, spokesman, Lockheed Martin (no date specified).
  • Danielle Brian, Project on Government Oversight (no date specified).