Business & Real Estate

Aerojet lands $1.4 billion in new space contracts

Aerojet Rocketdyne Holdings Inc. announced two contracts worth almost $1.4 billion combined Monday, including a deal to support NASA’s efforts to bring manned spaceflight to Mars.

The two deals mark a reversal of sorts for the Rancho Cordova rocket-engine maker, which experienced a series of setbacks in recent weeks. The larger of the two deals, a nine-year Mars contract with NASA for $1.16 billion, represents one of Aerojet’s single biggest in recent memory, said company spokesman Glenn Mahone.

Aerojet’s NASA contract is to develop engines for the agency’s Space Launch System, its long-range program for taking manned missions to Mars.

“This is the rocket that will enable humans to leave low Earth orbit and travel deeper into the solar system, eventually taking humans to Mars,” said Julie Van Kleeck, the company’s vice president of advanced space and launch programs.

The news clearly put Aerojet in a celebratory mood. “We’re going to Mars!” tweeted the company’s chief executive, Eileen Drake.

Aerojet said the first test flight of the new NASA system, involving an unmanned trip to the moon and back, is set for 2018.

The big contract apparently won’t translate into additional jobs at Rancho Cordova headquarters, where Aerojet is embarking on a cost-cutting program designed to eliminate 250 of its 1,600 jobs. The bulk of the work is to be performed at Aerojet’s facility in Canoga Park, near Los Angeles, where it has invested $200 million in preparation for the Mars project. Additional work is planned for company facilities in West Palm Beach, Fla., and NASA’s Stennis Space Center in Mississippi.

The Mars contract represents a rejuvenation of one of Aerojet’s most important programs ever: the RS-25 engine. The RS-25s powered 135 space shuttle flights but haven’t flown since NASA halted the shuttle program in 2011. The Mars rockets will carry four RS-25s apiece.

The second contract, with Boeing Co., will pay Aerojet some $199.5 million to provide propulsion systems for flights to the International Space Station from the United States. After relying on Russia for manned flights to the space station since ending the shuttle program four years ago, NASA plans to resume U.S. flights to the space station by 2017.

The twin announcements follow weeks of bad news for Aerojet. In September, the company paid $50 million to settle a dispute with one of its most important customers, Orbital ATK Inc., after an engine refurbished by Aerojet exploded shortly after liftoff of an unmanned Orbital launch. The settlement wiped out Aerojet’s third-quarter profits.

Also, Aerojet’s unsolicited $2 billion bid for rocket maker United Launch Alliance was rejected. That came two days after ULA announced it was no longer buying rocket boosters from Aerojet.

Aerojet’s stock closed regular New York Stock Exchange trading at $16.25 a share, up 5 cents. The shares jumped 75 cents in after-hours trading, to $17, after the two new contracts were announced.

Dale Kasler: 916-321-1066, @dakasler

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