FTC and Solid Rocket Motors
By Rebecca Grant: Federal Trade Commission Chair Andrew Ferguson is a breath of fresh air, and he’s scored major wins on everything from drug prices to “Made in the USA” factory standards. Now it’s time for the FTC to take an important step related to national defense. The FTC is reviewing public comment on a way to unwind the red tape left over from a 2018 merger by setting aside an unusual, outdated 2018 consent order imposed on the manufacturing of solid rocket motors.
Back in 2018, Northrop Grumman expanded its solid rocket motor business by acquiring Orbital ATK. National security analysts breathed a sigh of relief because the merger stabilized a key industrial base component for missiles ranging from Hellfire to space launch. While this was far afield from their consumer protection mission, the FTC was concerned that there were only two manufacturers of solid rocket motors (which refers to solid, rather than liquid, propellant) in the U.S. at the time. Antitrust law requires the FTC to review mergers valued over $100 million although the vast majority proceed with no action. The FTC approved the $9.2 B acquisition but put in place a lot of red tape concerning pricing, proprietary data and Pentagon supervision.
Those concerns proved unnecessary. Today the industrial base for SRMs is healthy and highly competitive. At least eight companies are active in the solid rocket motor sector for precision strike and air defense missiles. Big primes and new entrants like Anduril are heavily invested. X-Bow, Ursa Major, Firehawk and others are competing for low-cost SRM production. In 2023, L3Harris purchased AeroJet Rocketdyne for $4.7 B to get a foothold in the growing solid rocket motor market as a merchant supplier. L3Harris made sure to retain the crucial engineering staff. The FTC did not object.
Lessons from Ukraine and Iran point to a major upswing in demand for the sector. Scenarios for deterring China also demand an array of missiles reliant on solid rocket motors. Business is booming. In January, Deputy Secretary of War Stephen Feinberg invested $1 billion of taxpayer money into a new venture with L3Harris to generate additional capacity for solid rocket motors. The Pentagon plans to IPO the Missile Solutions business by late 2026. That’s a sign of how far the market has moved since 2018.
Northrop Grumman in March petitioned the FTC to set aside the 2018 order. The company has fully complied with the order for the past seven years. In the vastly changed marketplace, Northrop Grumman has turned out to be mainly a merchant supplier and there are “myriad future options” for prime contractors seeking solid rocket motors.
The solid rocket motor market of 2026 needs no help from the FTC. After all, the FTC was not set up to be a voice in national security. The FTC cares about innovation, but their core mission is consumer protection: groceries, robocalls and online scams, not precision strike and nuclear deterrence.