US satellite to launch operaitons to merge

Boeing and Lockheed Martin will, if the government approves, merge their satellite launch operations.

This move comes after several years of civil litigation between the two companies and the suspension of Boeing’s U.S. Air Force contracts.

The proposed merger would save the government an estimated $100 million to $150 million per year and will effectively put an end to the U.S. government strategy that keeps two launch services available to the military.

The Air Force supports the planned merger. Even if the merger happens, each company’s rockets – Lockheed’s Atlas V series and Boeing’s Delta IV rockets – would be maintained, but two companies’ supportive infrastructure, including administration, launch, and manufacturing operations, would be merged into one entity.

One reason for this merger might well be the collapse in the market for commercial launches. In the 1990s, when the two-launch operations strategy was created, the commercial market was expected to provide enough contracts for two separate entities.

The litigation and ethics scandal that caused the suspension of $1 billion dollars worth of government contracts with Boeing were the result of accusations that Boeing acquired proprietary information belonging to Lockheed and used it to win a 1998 Air Force contract to Lockheed to win an Air Force contract in 1998.