Jacques van Oene
May 2nd 05, 10:58 PM
Boeing, Lockheed Martin to Form Launch Services Joint Venture
- Lowers Cost to the Government
- Maintains Assured Access to Space
- Enhances Reliability
- Provides Full Cost Visibility
CHICAGO, and BETHESDA, MD - May 2, 2005 - The Boeing Company (NYSE: BA) and
Lockheed Martin Corporation (NYSE: LMT) have entered into an agreement to
create a joint venture that will combine the production, engineering, test
and launch operations associated with U.S. government launches of Boeing
Delta and Lockheed Martin Atlas rockets. The joint venture, named United
Launch Alliance, will reduce the cost of meeting the critical national
security and NASA expendable launch vehicle needs of the United States.
"It has become increasingly clear that an alliance of launch capabilities is
essential to meet the space communications, surveillance and reconnaissance
needs of the 21st century, and to assure access to space," said Lockheed
Martin Chairman, President and Chief Executive Officer Robert J. Stevens.
"This combination will permit our national customers to achieve their
mission objectives while reflecting current budget pressures and providing
the government with full cost visibility."
"Both of our companies have developed versions of the Evolved Expendable
Launch Vehicle (EELV) in collaboration with the Air Force and have flown
them successfully," said Boeing President, Chief Executive Officer and Chief
Financial Officer James A. Bell. "By joining together we are convinced that
we can provide the customer with assured access to space at the lowest
possible cost while ensuring enhanced reliability by eliminating duplicate
infrastructure and bringing experts from both companies to focus on mission
assurance."
United Launch Alliance will be structured as a 50-50 joint venture between
Boeing and Lockheed Martin--combining services currently provided separately
by Boeing Integrated Defense Systems' Expendable Launch Systems division and
by Lockheed Martin's Space Systems Company--for launches of each company's
respective rockets. Based upon initial estimates, annual savings to the
government resulting from the combination are expected to be approximately
$100 - $150 million.
Michael C. Gass, vice president and general manager of Lockheed Martin Space
Transportation, has been appointed United Launch Alliance president and
chief executive officer and Dan Collins, vice president Boeing Expendable
Launch Systems will serve as chief operating officer. In addition, a Boeing
executive will be appointed chief financial officer and a Lockheed Martin
executive will be named controller at a later date. These leaders will
report to a six-member board of directors, with each company appointing
three directors.
"The Lockheed Martin and Boeing employees who will be part of this new
launch provider understand the enduring needs of our Air Force and NASA
customers for mission success," said Gass. "They bring together a remarkable
record of accomplishment in launching national-security and scientific space
payloads."
"The continued performance of Boeing and Lockheed Martin employees as a new
team going forward--from the engineering center to the factory floor to the
launch pad--will offer even greater reliability and mission assurance to the
customer," said Collins.
The agreement, which is subject to government and regulatory approval in the
United States and internationally, also stipulates that the companies will
immediately request an order from the U.S. District Court suspending all
activity in the pending civil litigation related to a previous competition
for launches under the Air Force EELV program. Simultaneous with the closing
of the transaction, the parties will dismiss all claims against each other.
"The mission of this joint venture is to reliably meet critical launch
needs, so it is imperative that the two teams come together as one with all
lingering issues resolved," said Stevens. "When agreement was reached to
form this alliance, both parties agreed that they were ready to move forward
with a clean slate and an undistracted focus on mission success."
Under the terms of the joint venture, Boeing's Delta and Lockheed Martin's
Atlas rockets will continue to be available as alternatives on individual
launch missions. This will ensure that government customers are able to make
decisions that meet the goal of assured access to space with two families of
launch vehicles. Upon vehicle selection, the United Launch Alliance team
will carry out the mission, including vehicle integration and payload
processing.
Lockheed Martin's International Launch Services (including Proton) and
Boeing Launch Services (including Sea Launch) are not included in the joint
venture. These entities will continue to sell launch services to non-U.S.
government customers. Additionally, work the companies are performing
independently in support of NASA-sponsored Space Shuttle-Derived Launch
Vehicle concepts for future space exploration initiatives will be excluded
from this joint venture.
United Launch Alliance headquarters will be established in Denver with most
engineering and administrative activities consolidated at that location's
existing Lockheed Martin Space Systems Company facilities. Major assembly
and integration operations will be located primarily at Boeing's
manufacturing and assembly facility in Decatur, Ala. As part of the joint
venture, Boeing's and Lockheed Martin's launch facilities at Cape Canaveral
Air Force Station in Florida and Vandenberg Air Force Base in California
will provide flexibility for meeting the requirements for East and West
Coast launches.
United Launch Alliance is expected to have about 3,800 total employees at
sites in Colorado, Alabama, Florida, California and Texas. It is anticipated
that consolidation of the two organizations eventually will result in the
elimination of some undetermined number of positions. A range of services
will be made available to support those employees transferring to new
locations to work with United Launch Alliance.
Completion of the transaction is expected in late 2005 at which time United
Launch Alliance operations would begin.
Morgan Stanley served as financial advisor to Boeing and JP Morgan served as
financial advisor to Lockheed Martin.
Safe Harbor Statement / Forward-Looking Statements
Certain statements contained in this press release are considered
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and it is both companies' intent that such
statements be protected by the safe harbor created thereby. Forward-looking
statements include, but are not limited to statements regarding: (1) the
expected closing date of the transaction; (2) the expected costs savings
arising out of the transaction; (3) the ability to quantify and demonstrate
cost savings; (4) the complexities of successfully integrating two
workforces; (5) the difficulty in retaining critical skill employees; (6)
uncertainities involved in advanced technological products and services; and
(7) future performance, reliability and mission assurance. These
forward-looking statements are subject to a number of risks, uncertainties
and other factors that could cause actual results to differ materially from
future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but
are not limited to: (a) the risk that the transaction may close more slowly
than expected or not at all; (b) the risk that the cost savings arising out
of the transaction may be less than anticipated, and (c) other risks and
uncertainties detailed from time to time in each company's filings with the
Securities and Exchange Commission. All information in this release is as
of May 2, 2005. Both companies disclaim any duty to update forward-looking
statements to reflect subsequent events, actual results or changes in
expectations.
Media Contacts:
Boeing: Dan Beck, 562-810-5797 or Walt Rice, 314-234-2149
Lockheed Martin: Tom Jurkowsky, 301-897-6352 or Jeff Adams, 301-897-6308
Investor Relations Contacts:
Boeing: Dave Dohnalek or Bob Kurtz, 312-544-2140
Lockheed Martin: James Ryan, 301-897-6584 or Mike Gabaly, 301-897-6455
--
--------------
Jacques :-)
www.spacepatches.info
- Lowers Cost to the Government
- Maintains Assured Access to Space
- Enhances Reliability
- Provides Full Cost Visibility
CHICAGO, and BETHESDA, MD - May 2, 2005 - The Boeing Company (NYSE: BA) and
Lockheed Martin Corporation (NYSE: LMT) have entered into an agreement to
create a joint venture that will combine the production, engineering, test
and launch operations associated with U.S. government launches of Boeing
Delta and Lockheed Martin Atlas rockets. The joint venture, named United
Launch Alliance, will reduce the cost of meeting the critical national
security and NASA expendable launch vehicle needs of the United States.
"It has become increasingly clear that an alliance of launch capabilities is
essential to meet the space communications, surveillance and reconnaissance
needs of the 21st century, and to assure access to space," said Lockheed
Martin Chairman, President and Chief Executive Officer Robert J. Stevens.
"This combination will permit our national customers to achieve their
mission objectives while reflecting current budget pressures and providing
the government with full cost visibility."
"Both of our companies have developed versions of the Evolved Expendable
Launch Vehicle (EELV) in collaboration with the Air Force and have flown
them successfully," said Boeing President, Chief Executive Officer and Chief
Financial Officer James A. Bell. "By joining together we are convinced that
we can provide the customer with assured access to space at the lowest
possible cost while ensuring enhanced reliability by eliminating duplicate
infrastructure and bringing experts from both companies to focus on mission
assurance."
United Launch Alliance will be structured as a 50-50 joint venture between
Boeing and Lockheed Martin--combining services currently provided separately
by Boeing Integrated Defense Systems' Expendable Launch Systems division and
by Lockheed Martin's Space Systems Company--for launches of each company's
respective rockets. Based upon initial estimates, annual savings to the
government resulting from the combination are expected to be approximately
$100 - $150 million.
Michael C. Gass, vice president and general manager of Lockheed Martin Space
Transportation, has been appointed United Launch Alliance president and
chief executive officer and Dan Collins, vice president Boeing Expendable
Launch Systems will serve as chief operating officer. In addition, a Boeing
executive will be appointed chief financial officer and a Lockheed Martin
executive will be named controller at a later date. These leaders will
report to a six-member board of directors, with each company appointing
three directors.
"The Lockheed Martin and Boeing employees who will be part of this new
launch provider understand the enduring needs of our Air Force and NASA
customers for mission success," said Gass. "They bring together a remarkable
record of accomplishment in launching national-security and scientific space
payloads."
"The continued performance of Boeing and Lockheed Martin employees as a new
team going forward--from the engineering center to the factory floor to the
launch pad--will offer even greater reliability and mission assurance to the
customer," said Collins.
The agreement, which is subject to government and regulatory approval in the
United States and internationally, also stipulates that the companies will
immediately request an order from the U.S. District Court suspending all
activity in the pending civil litigation related to a previous competition
for launches under the Air Force EELV program. Simultaneous with the closing
of the transaction, the parties will dismiss all claims against each other.
"The mission of this joint venture is to reliably meet critical launch
needs, so it is imperative that the two teams come together as one with all
lingering issues resolved," said Stevens. "When agreement was reached to
form this alliance, both parties agreed that they were ready to move forward
with a clean slate and an undistracted focus on mission success."
Under the terms of the joint venture, Boeing's Delta and Lockheed Martin's
Atlas rockets will continue to be available as alternatives on individual
launch missions. This will ensure that government customers are able to make
decisions that meet the goal of assured access to space with two families of
launch vehicles. Upon vehicle selection, the United Launch Alliance team
will carry out the mission, including vehicle integration and payload
processing.
Lockheed Martin's International Launch Services (including Proton) and
Boeing Launch Services (including Sea Launch) are not included in the joint
venture. These entities will continue to sell launch services to non-U.S.
government customers. Additionally, work the companies are performing
independently in support of NASA-sponsored Space Shuttle-Derived Launch
Vehicle concepts for future space exploration initiatives will be excluded
from this joint venture.
United Launch Alliance headquarters will be established in Denver with most
engineering and administrative activities consolidated at that location's
existing Lockheed Martin Space Systems Company facilities. Major assembly
and integration operations will be located primarily at Boeing's
manufacturing and assembly facility in Decatur, Ala. As part of the joint
venture, Boeing's and Lockheed Martin's launch facilities at Cape Canaveral
Air Force Station in Florida and Vandenberg Air Force Base in California
will provide flexibility for meeting the requirements for East and West
Coast launches.
United Launch Alliance is expected to have about 3,800 total employees at
sites in Colorado, Alabama, Florida, California and Texas. It is anticipated
that consolidation of the two organizations eventually will result in the
elimination of some undetermined number of positions. A range of services
will be made available to support those employees transferring to new
locations to work with United Launch Alliance.
Completion of the transaction is expected in late 2005 at which time United
Launch Alliance operations would begin.
Morgan Stanley served as financial advisor to Boeing and JP Morgan served as
financial advisor to Lockheed Martin.
Safe Harbor Statement / Forward-Looking Statements
Certain statements contained in this press release are considered
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and it is both companies' intent that such
statements be protected by the safe harbor created thereby. Forward-looking
statements include, but are not limited to statements regarding: (1) the
expected closing date of the transaction; (2) the expected costs savings
arising out of the transaction; (3) the ability to quantify and demonstrate
cost savings; (4) the complexities of successfully integrating two
workforces; (5) the difficulty in retaining critical skill employees; (6)
uncertainities involved in advanced technological products and services; and
(7) future performance, reliability and mission assurance. These
forward-looking statements are subject to a number of risks, uncertainties
and other factors that could cause actual results to differ materially from
future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but
are not limited to: (a) the risk that the transaction may close more slowly
than expected or not at all; (b) the risk that the cost savings arising out
of the transaction may be less than anticipated, and (c) other risks and
uncertainties detailed from time to time in each company's filings with the
Securities and Exchange Commission. All information in this release is as
of May 2, 2005. Both companies disclaim any duty to update forward-looking
statements to reflect subsequent events, actual results or changes in
expectations.
Media Contacts:
Boeing: Dan Beck, 562-810-5797 or Walt Rice, 314-234-2149
Lockheed Martin: Tom Jurkowsky, 301-897-6352 or Jeff Adams, 301-897-6308
Investor Relations Contacts:
Boeing: Dave Dohnalek or Bob Kurtz, 312-544-2140
Lockheed Martin: James Ryan, 301-897-6584 or Mike Gabaly, 301-897-6455
--
--------------
Jacques :-)
www.spacepatches.info