{"blocks":[{"type":"paragraph","data":{"text":"Competition, innovation, and cost-containment in the missile defense sector are vital to countering rapidly evolving missile threats from China, Russia, and other sources."}},{"type":"paragraph","data":{"text":"History has taught us that excessive consolidation in any industry, especially defense, has increased taxpayers’ costs and high-level clumsiness in strategic thinking."}},{"type":"paragraph","data":{"text":"That’s why Washington should prohibit Lockheed Martin’s proposed acquisition of Aerojet Rocketdyne and take other decisive actions to promote enhanced competition in the already highly-concentrated missile defense, propulsion, and hypersonic development market."}},{"type":"header","data":{"text":"Missile Defense Propulsion Technology","level":2}},{"type":"paragraph","data":{"text":"Approval of this transaction by federal antitrust regulators would cause problems in the tactical and strategic offensive missile markets. It would also further damage competition in the missile defense arena by bringing Aerojet’s solid rocket motor (SRM) manufacturing capability under the control of Lockheed."}},{"type":"paragraph","data":{"text":"SRMs, the state-of-the-art technology for propelling missiles toward their targets, are used in virtually all missile systems procured by the US government."}},{"type":"image","data":{"file":{"url":"https://www.thedefensepost.com/wp-content/uploads/2021/05/Minuteman_III_diagram.png"},"caption":"A diagram of the Minuteman III ICBM, which uses three solid rocket motors for its propulsion. Photo: public domain"}},{"type":"paragraph","data":{"text":"Since Northrop Grumman acquired Orbital ATK and vertically integrated Orbital’s market-leading SRM enterprise into its own business in a 2018 transaction, Aerojet is the last remaining independent manufacturer of this critical propulsion technology."}},{"type":"paragraph","data":{"text":"Lockheed’s control of Aerojet’s SRM technology would be problematic because Boeing, Raytheon, and Northrop — the only other three companies capable of competing against Lockheed as prime contractors for US government missile systems contracts — all rely on Aerojet as a supplier of propulsion components for their solutions."}},{"type":"paragraph","data":{"text":"Moreover, Aerojet is the only producer of the Divert and Attitude Control System. This critical missile defense propulsion technology makes rapid and precise course adjustments to maneuver interceptors to destroy incoming ballistic missiles."}},{"type":"header","data":{"text":"Harmful to Innovation, Pricing","level":2}},{"type":"paragraph","data":{"text":"Substantial historical experience, economic research, and antitrust analyses by regulators at the Federal Trade Commission (FTC), DOJ Antitrust Division, and European Union confirm that corporate consolidations reducing the number of suppliers in highly concentrated industries are likely to foster significant anticompetitive mischief harmful to innovation and pricing."}},{"type":"paragraph","data":{"text":"Foremost in relevance are the lessons of Northrop’s acquisition of Orbital, which strongly suggest Lockheed’s takeover of Aerojet will undermine competition, innovation, and affordability of America’s missile defense programs."}},{"type":"paragraph","data":{"text":"Northrop’s apparent anticompetitive use of its control of SRMs to discriminate against and force Boeing to drop out of the competition for the Ground Based Strategic Deterrent (GBSD) program contract provides the greatest cause for concern."}},{"type":"paragraph","data":{"text":"Boeing has complained that Northrop’s acquisition of Orbital has created an unfair competitive environment and that Northrop has refused to make SRMs available on a non-discriminatory basis as required by the FTC consent order governing the takeover."}},{"type":"paragraph","data":{"text":"Boeing also charged that Northrop deliberately delayed certain agreements, which left it insufficient time to negotiate an affordable price for SRMs and forced it to withdraw from GBSD bidding. The FTC opened an investigation into the matter in October 2019 that remains ongoing."}},{"type":"paragraph","data":{"text":"Allowing Lockheed to acquire Aerojet would invite the same types of anticompetitive abuses occasioned by Northrop’s takeover of Orbital."}},{"type":"header","data":{"text":"Missile Threats From China, Russia","level":2}},{"type":"paragraph","data":{"text":"America can’t afford another ill-conceived missile defense industry consolidation that will jeopardize innovation and cost effectiveness — especially with the rapidly evolving threat from Chinese and Russian development of new hypersonic missiles and glide vehicles."}},{"type":"paragraph","data":{"text":"China operates the most dynamic and ambitious missile development program in the world. The Pentagon assesses that the Chinese military will double its arsenal of approximately 200 nuclear warheads and possess the ability to deliver them via advanced ground, sea, and air launched ballistic missiles by the end of the decade."}},{"type":"paragraph","data":{"text":"Beijing also has programs underway to improve its intercontinental ballistic missiles, multiple independently targetable reentry vehicles, and DF-17 missile with a hypersonic glide vehicle capable of penetrating missile defenses by maneuvering rapidly and traveling at velocities exceeding five times the speed of sound."}},{"id":"l7qaykdu-30r2gwnh","type":"embed","data":{"service":"youtube","source":"https://www.youtube.com/embed/CMUbpMTfZtE","embed":"https://www.youtube.com/embed/CMUbpMTfZtE","caption":"","height":"auto","width":"100%"}},{"type":"paragraph","data":{"text":"Russia too is engaged in an ambitious modernization of its nuclear missile programs with a heavy emphasis on technological innovation to penetrate US missile defenses. Like Beijing, Moscow is investing heavily in improved versions of its ballistic and cruise missiles in addition to deploying the new “Avangard” hypersonic glide vehicle."}},{"type":"paragraph","data":{"text":"Effectively addressing the emerging missile threats from China and Russia will require the United States to adopt policies that promote optimal innovation and cost-effectiveness in its missile defense programs."}},{"type":"paragraph","data":{"text":"Most immediately, this means the FTC should reject Lockheed’s bid to acquire Aerojet to prevent any further harm to fair competition in this vital sector."}},{"type":"delimiter","data":{}},{"type":"image","data":{"file":{"url":"https://www.thedefensepost.com/wp-content/uploads/2021/05/William-J.-Murphy.png"},"caption":"Headshot of William J. Murphy"}},{"type":"paragraph","data":{"text":"Dr. William J. Murphy is an Associate Professor of Social Science at the New England Institute of Technology in East Greenwich, RI where he teaches international relations and US national security policy. He previously served as a lecturer in the International Relations Program at the University of Pennsylvania, an adjunct faculty member at Villanova University, and a visiting professor at Kyung Hee University in Seoul, Korea."}},{"type":"paragraph","data":{"text":"He holds M.A. and Ph.D. degrees in Political Science from the University of Pennsylvania as well as an A.B. in Government from Harvard College. He is also a veteran of enlisted and officer service in the armor branch of the United States Army from 1988-1991, including assignments as a tank platoon leader and battalion staff officer with the 2nd Infantry Division in Korea."}},{"type":"delimiter","data":{}},{"type":"paragraph","data":{"text":"The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The Defense Post."}},{"type":"paragraph","data":{"text":"The Defense Post aims to publish a wide range of high-quality opinion and analysis from a diverse array of people – do you want to send us yours? Click here to submit an op-ed."}}]}

William J. Murphy

Lockheed Takeover Plan Jeopardizes US Ability to Counter Evolving Missile Threats