Private equity deal shows just how far America’s legacy rocket industry has fallen

Liquids only, please

The RS-25 engine, by far the largest in L3Harris’ portfolio and a former Rocketdyne product, is not part of the sale. The RS-25 was initially known as the Space Shuttle Main Engine and was designed for reusability. The expendable heavy-lift SLS rocket uses four of the engines, and NASA is burning through the 16 leftover shuttle-era RS-25 engines on the first four SLS flights for the agency’s Artemis Moon program. The second SLS flight is set to launch in the coming months on a mission carrying four astronauts beyond the Moon.

L3Harris will retain total ownership of the RS-25 program. The company has a contract with NASA to build new RS-25 engines for SLS flights beyond Artemis IV. But the new RS-25s will come at an expense of about $100 million per engine, significantly more than SpaceX sells an entire launch on a Falcon 9 rocket. The engine contract is structured as a cost-plus contract, with award and incentive fees paid by the government to L3Harris.

The SLS rocket’s exorbitant cost has driven calls for its cancellation, although lawmakers in Congress last year signaled their support for keeping the program alive through at least Artemis V. Beyond 2030, the rocket’s future is in doubt.

Aerojet Rocketdyne’s work on solid-fueled propulsion, ballistic missile interceptors, tactical missiles, and other military munitions will also remain under L3Harris control. The split of the company’s space and defense segments will allow L3Harris to concentrate on Pentagon programs, the company said.

So, what is AE Industrial getting in its deal with L3Harris? Aside from the Rocketdyne name, the private equity firm will have a majority stake in the production of the liquid-fueled RL10 upper stage engine used on United Launch Alliance’s Vulcan rocket. AE Industrial’s Rocketdyne will also continue the legacy company’s work in nuclear propulsion, electric propulsion, and smaller in-space maneuvering thrusters used on satellites.