Jeff Bezo's space firm joins Lockheed-Boeing rocket venture

September 14
10:23 PM 2015

A partnership between Boeing Co. and Lockheed Martin Corp. known as United Launch Alliance (ULA) has sealed a deal with Jeff Bezo's space company, Blue Origin. The new partnership agreement took place as Aerojet Rocketdyne Holdings was reported to have made an offer to buy the joint venture company for a reported amount of $2 billion cash.

According to Reuters, ULA and Blue Origin had reached a deal on Thursday regarding the production of the new Bezos's rocket booster, the BE-4. ULA is interested in investing more in the BE-4 technology since it can no longer use any Russian technology for their rocket system.

This is because the government had put a restriction on using Russian technology for military purposes in the wake of Russia intervention in Ukraine crisis. Previous deal between ULA and Bezos's company is that both companies will jointly develop a new liquid natural gas-fuelled rocket engine.

Besides with Blue Origin, ULA also had a backup deal to use Aerojet's AR1 engine for its rocket in case if there is any problem with the BE-4. BE-4 is scheduled to be released in 2019 according to VentureBeat.

However, the AR1 will not be launched anytime soon since the engine is still in the development stage. ULA Chief Executive confirmed the news last June and said that the AR1 is roughly 16 months behind the BE4 production.

ULA is a 50-50 joint venture between Boeing and Lockheed formed ten years ago. The merge saw the company monopolizing the military aeronautics and aerospace sector. Currently, there is more than 90 military satellite that have been launched into the orbit be the venture.

Currently, the company is facing pressure in an effort by politicians to stop ULA from monopolizing the industry. ULA is also facing serious financial problem as they are trying to cut the cost of production in order to compete with SpaceX, a company providing rocket solution at lower cost founded by Elon Musk reported The Wall Street Journal.

The problem faced by ULA is also due to strict investment agreement signed by Boeing and Lockheed to ensure that both companies will not have more power over the others in the venture. As for Boeing, the company itself is facing lots of financial problem since the sale of their plane dropped significantly after the release of Airbus's plane to compete with their plane fleet.

ULA which is the main rockets supplier for U.S military operation said it is expected to make an announcement next week regarding the offer made by Aerojet.

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