Lockheed Martin [LMT] is pursuing the creation of a provider of solid rocket motors beyond the two main suppliers–Northrop Grumman
[NOC] through its 2018 buy of Orbital ATK and L3Harris [LHX] through its recent acquisition of Aerojet Rocketdyne.
“We are endeavoring as a defense company to create another supplier,” James Taiclet, the president of Lockheed Martin, testified at a Sept. 20 hearing of the House Armed Services Committee’s cyber, information technologies, and innovation (CITI) panel in response to a question from panel Chairman Mike Gallagher (R-Wis.).
“We are in late stage negotiations with a company that can actually pull this off, we believe,” Taiclet said.
In June, Anduril Industries bought West Lafayette, Ind.-based Adranos, Inc., a manufacturer of solid rocket motors which also has a plant in Mississippi (Defense Daily, June 26).
Anduril has said that the Adranos buy will enable Anduril to become “a merchant supplier of solid rocket motors to prime contractors delivering missiles, hypersonics and other propulsion systems for some of the Department of Defense’s most important programs.”
Brian Schimpf, Anduril Industries’ co-founder and CEO, testified at the Sept. 20 hearing that the major obstacle to increasing defense production lies not with prime contractors but with the supplier base.
“Often, the problem is blamed on the primes, their ability to produce these things,” Schimpf testified in response to a question from Rep. Peter McCormick (R-Ga.) on whether DoD can ramp up production rapidly to support big power conflicts and a deep bench of weapons in reserve.
“In reality, what I’ve seen is the supply chain below that is often the limiting factor,” Schimpf said. “Often, the challenge is how do we ramp everyone two or three layers down the stack to be able to scale and provide the capabilities that are needed. That’s an area where I think targeted investment from Congress and DoD can take a much more proactive approach. I think it’s key to work with demand on contracts and understanding and visibility into that supply chain and write in the ability to ramp production.”
Gallagher suggested that ramping up Lockheed Martin production of AGM-158C Long Range Anti-Ship Missiles (LRASM) would help counter the “mass” of China’s military systems. Gallagher asked Taiclet what Lockheed Martin would need to increase the building of LRASM “and other key long range precision fires.”
“There’s a few beneficial actions the government could take,” Taiclet replied. “One is to create a long range production and procurement strategy over 5-10 years–a multi-year approach. Congress may need to adjust the ways that it allocates funding to that kind of approach so that the suppliers will have the confidence to ramp up and invest in that higher production level.”
“Our suppliers tend to be in the 80-20 rule,” Taiclet said. “80 percent of their business tends to be commercial, 20 percent military or defense-related. They’re gonna react to both of those markets, and if they see more certainty based on the commercial airline business or other factors that have nothing to do with national defense, they’ll probably put more resources in their company into that business. However, the way to get surety for them and for us and our investors is to have a longer range commitment by government to a production schedule that lasts more than one year.”