SIC 3764
GUIDED MISSILE AND SPACE VEHICLE PROPULSION UNITS AND PROPULSION UNIT PARTS



This industry consists of establishments primarily engaged in manufacturing guided missile propulsion units and propulsion unit parts. This industry also includes establishments owned by manufacturers of guided missile and space vehicle propulsion units and parts and primarily engaged in research and development on such products, whether from enterprise funds or on a contract or fee basis. Research and development on guided missile and space propulsion units, on a contract or fee basis by establishments not owned by manufacturers of guided missile and space vehicle propulsion units and parts are classified in SIC 8731: Commercial Physical and Biological Research.

NAICS Code(s)

336415 (Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing)

Industry Snapshot

In 2001 U.S. manufacturers of propulsion units, engines, and propulsion unit parts for guided missiles and space vehicles recorded $1.5 billion in net sales. Nearly 26 percent ($382 million) of this total was attributable to military markets, while civilian applications accounted for the remaining $1.1 billion. The end-of-year backlog was $6.4 billion; $795 million for the military and $5.6 billion for nonmilitary.

In the 1990s there were two basic types of propulsion systems used for guided missiles and space vehicles—solid-fueled and liquid-fueled engines. Solidfueled engines were more commonly used because liquid fuels require storage at very low temperatures. Other rockets produced by this industry included hybrid rockets, which use a combination of solid and liquid fuel systems, small propellant rockets for adjusting the altitude of space vehicles, and rockets for track-borne research sheds. By the end of the century the industry was seeking a method to propel vehicles for longer and further space exploration. Nuclear fission, sun laser/solar sails, and anti-matter were just a few methods being researched by the early 2000s.

Organization and Structure

Establishments in this industry were generally subcontractors for producers of complete guided missiles and space vehicles. Primary contractors and subcontractors were hired by a single customer.

In 2001 net sales for the entire industry (complete aircraft, space vehicles, missiles, and selected parts) was $117.3 billion, with $47.2 billion military related and $70.1 billion nonmilitary. Of the nonmilitary sales, approximately $5 billion went to the U.S. government. The industry's shipments manufactured under government contracts were primarily for the U.S. Department of Defense and NASA. The balance of the industry's shipments manufactured for private sector companies were used in producing propulsion and engine systems to launch commercial satellites.

Background and Development

Propulsion units and engines were often referred to as "rockets." Rockets were believed to have originated in China during the thirteenth century, soon after the invention of gunpowder. Rockets appeared in Europe in the early fourteenth century but did not see regular military use until the Napoleonic Wars and the War of 1812. Rockets during this period still used some form of gunpowder for propulsion. It was not until the late nineteenth and early twentieth century that modern rocketry, using stored fuels, was first developed.

World War II witnessed the first guided missiles and military aircraft powered by propulsion systems. During the war, only the Germans used propulsion guided missiles, though other countries possessed the technological capabilities. It was not until after the war that other countries, including the United States, developed these systems.

The development of the propulsion units used in ballistic missiles enabled the launching of the first space vehicles into orbit by the end of the 1950s. Another significant development in propulsion systems came in the 1970s, concurrent with the first designs for space shuttles. These engines were built with propulsion units that either jettisoned off the spacecraft or were permanently fixed and reusable.

Rockets using nuclear and solar fuel sources were also tested for space missions. Nuclear propulsion was first developed in the 1960s and was considered 20 years later for missions to Mars, but concerns about space debris kept this system in the experimental stages. Solar propulsion appeared promising for its ability to run an engine at tremendous cost savings.

Entering the 1990s, the guided missile and space vehicle propulsion industry, like other aerospace industries, was downsizing operations while trying to retain a strong research and development base. With the end of the cold war, new propulsion systems for military and space exploration programs were limited to prototypes, which were then taken to full-scale production on the basis of need and available funding.

With federal cut-backs, a number of fixed-price contracts created losses for companies in the late 1980s and early 1990s. In the late 1980s, the U.S. Air Force proposed development of the Titan 4 Launcher through the "SRMU stabilization program" but did not fund the program. Both the contractor, Martin Marietta Corp., and the subcontractor, Hercules, Inc., invested substantially, and both ended up suing each other over contract terms. In 1993 the U.S. government agreed to appropriate funds for some of the losses.

In 1995 American manufacturers of propulsion units, jet engines, and propulsion unit parts for guided missiles and space vehicles recorded $2.4 billion in gross sales. The number was roughly split 50-50 between military and nonmilitary markets; $1.1 billion accounted for military markets, $1.3 billion accounted for civilian markets. The end-of-year backlog was $6.1 billion, with $792 million for the military and $5.3 billion for nonmilitary. Industry shipments reached $3.2 billion in 1997. In 1995 net sales for the entire industry (complete aircraft, space vehicles, missiles, and selected parts) was $101 billion, with $52 billion military related, and $49 billion nonmilitary. Of the nonmilitary sales, $7 billion went to the U.S. government.

The end of the twentieth century was the beginning of a new phase in the production of space vehicles. Production was geared toward low-cost rather than highcost systems. U.S. export forecasts for guided missiles and space vehicle parts were $5.9 million for 1999 as compared to $5.6 million in 1998. Import forecasts from foreign countries were $39 million in 1999 as compared to $37 million in 1998. The largest foreign supplier to the U.S. aerospace market in 1999 was France.

Like other industries in aerospace, the guided missile and space vehicle propulsion industry was expected to undergo restructuring as a result of federal defense budget cuts. According to industry leaders, by the end of the century the industry was expected to be smaller, with many individual companies having a larger market share than in the mid-1980s. While the aerospace industry was smaller in 1999 than it was in the early 1990s, conditions were on an upswing.

Current Conditions

By the early 2000s, Standard & Poor's (S&P) reported that manufacturers of rockets used for space applications like satellites were suffering from overcapacity. While significant growth occurred during the 1990s, fueled by predictions of a significant need for communications satellites, actual demand did not materialize as anticipated. Citing information from the International Space Business Council's report, State of the Space Industry 2002 , S&P reported that rocket launches fell from 86 in 2000 to 57 in 2001, and would potentially decline as much as 33 percent in 2002. In addition to overcapacity and weak demand in the market for satellite launches, the launching of space vehicles also was expected to be relatively weak into the mid-2000s, according to Aviation Week & Space Technology .

By early 2003, the military market was more promising for the industry. With ramped up military action in the Middle East and the beginning of a war with Iraq, defense contractors were benefiting from increased spending on weapons. For example, in February 2003 Aviation Week & Space Technology reported that the Department of Defense modified an existing contract with leading defense contractor Raytheon calling for the manufacture of 167 additional Tactical Tomahawk missiles. The contract modification was valued at $224.5 million. In addition, the publication revealed that the U.S. military had tentative plans to purchase some 2,200 PAC-3 interceptor missiles from Lockheed Martin, along with 1,400 Patriot PAC-2 GEM+ missiles from Raytheon.

Industry Leaders

In 2002, the leading firms within the guided missile and space vehicle propulsion industry included Alliant Techsystems, Inc., with sales of $1.8 billion; and GenCorp, Inc., with $1.1 billion in sales.

Alliant Techsystems, Inc. (ATK) supplied aerospace technologies to the United States and its allies. The company became a business entity of its own following a spin-off from Honeywell, Inc., in October 1990. In March 1995 ATK purchased the aerospace component of Delaware-based Hercules, Inc. for $300 million. It gained access to new markets in 1997 when it purchased Motorola's military fuse business. ATK eventually acquired Thiokol Corp., which formerly was part of Cordent Technologies, and renamed it ATK Thiokol. Thiokol was established in 1969 as Morton-Norwich Products, Inc. and changed its name later that year to Morton Thiokol, Inc. Thiokol went on to become the nation's leading supplier of solid rocket propulsion systems for space launch vehicles since the inception of manned space flight. In October 2002, ATK formed its ATK Missile Systems division following the acquisition of California-based Science and Applied Technology, Inc. Headquartered in Edina, Minnesota, ATK employed a workforce of approximately 11,600 employees in 2002.

GenCorp, Inc. was established in 1915 as General Rubber Manufacturing Co. In 2002 GenCorp had 10,112 employees and Aerojet-General, the company's aerospace and defense division, accounted for more than 24 percent of GenCorp's total sales. In addition to producing solid and liquid propulsion systems and their related parts, Aerojet manufactured sensors, warheads, and munitions used in the aerospace industry. Aerojet was most widely known for its Titan IV engines and its second stage Delta engines, which allowed spacecraft to maneuver in orbit. During the late 1990s, the U.S. Army awarded Aerojet with a $43.8 million product improvement contract for the Sense and Destroy Armor Program. Aerojet played a major role in the Space-Based Infrared System (SBIRS) in 1999.

Workforce

In 2000, the guided missile and space vehicle propulsion industry employed 14,664 employees, 6,472 of whom were production workers. This figure was a decline from 1997, when the industry employed 17,738 employees and 7,903 production workers. In recent years, an estimated 25 percent of the industry's workers were engineers, mainly aeronautical, astronautical, electronic, and industrial. Other occupations needed in the manufacturing of guided missile and space vehicle propulsion systems included systems analysts, computer scientists, specialized technicians, production managers, and machinists.

Overall employment in this industry was expected in the late 1990s to drop considerably by the year 2005. The largest decline was expected to be in jobs related to the inspection and testing of products. However, computer scientists were expected to increase their representation in this industry to facilitate the development of computerized prototypes to replace full-scale testing of new products. Overall employment in the aerospace industry has declined; direct employment related to aircraft, missiles, and space vehicle manufacture declined more than 35 percent from 905,100 in 1989 to 586,800 in 1994. By 2002 total aerospace employment had declined to its lowest level in 50 years, according to the Aerospace Industries Association.

America and the World

Manufacturers of guided missile and space vehicle propulsion and engine systems were affected by developments in foreign countries. Entering the 1990s, France and Great Britain were leading competitors with the United States in the production of missiles. By the mid-1990s, the United States and former Soviet Union no longer competed solely between themselves for the defense and space related business of smaller nations. Other nations, such as France, Great Britain, Australia, Canada, China, Germany, and Japan entered this market. The European conglomerate Arianespace became the world leader in the production of commercial satellites.

The change in U.S. relationship with the former Soviet Union also helped to create a highly competitive international market for commercially operated communication satellites and low-budget commercial satellites.

Research and Technology

Despite a weak market for space vehicle launches, in the early 2000s research and development initiatives continued in this area. For example, according to the September 16, 2002, issue of Aviation Week & Space Technology , NASA had budgeted millions of dollars for "high-power electric propulsion and power conversion," nuclear in-space propulsion technologies, and aerocapture and solar sales. As the publication explained, "NASA is looking directly beyond nuclear power as it studies technologies to improve the efficiency of future deep-space missions, with some $70 million tentatively programmed to push technology that uses either nuclear power directly, or supplements it, to get beyond the limitation of chemical propulsion for space science probes. In addition to electric propulsion systems that use the power from nuclear reactors to drive spacecraft, the agency's Office of Space and Science is studying high-temperature materials and structures to handle the heat of atmospheric baking, and huge solar sails for propulsion."

One specific technology that NASA's Jet Propulsion Laboratory and Glenn Research Center were engaged in developing and testing during the early 2000s was an ion engine. Powered by either solar or nuclear energy, this efficient engine was useful for long-distance missions. It was tested during a 1998 space flight and was expected to see use on a probe intended to explore an asteroid belt in 2006.

Further Reading

Aerospace Industries Association. "Aerospace Employment Hits 50-Year Low," 4 March 2003. Available from http://www.aia-aerospace.org .

Morning, Frank, Jr. "Aerojet Returns to Propulsion Roots." Aviation Week & Space Technology, 14 January 2002.

——. "Nuclear Power Not Only Arrow in NASA Space Propulsion Quiver." Aviation Week & Space Technology, 14 January 2002.

Rayman, Marc D. "Entering the New Millennium with Cutting-Edge Technology," 1999. Available from http://www.nmp.jpl.nasa.gov .

Scott, William B. "Launch Failures Cripple U.S. Space Prowess." Aviation Week & Space Technology, 3 May 1999.

Standard & Poor's Industry Surveys: Aerospace & Defense. New York: Standard & Poor's Corporation, 31 October 2002.

"A Thrifty Electric Rocket for Deep-Space Probes." U.S. News & World Report, 11 November 2002.

U.S. Census Bureau. Annual Survey of Manufactures. Washington, DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, February 2002. Available from http://www.census.gov .

——. "Civil Aircraft and Aircraft Engines: 2001.". Current Industrial Reports. Washington, DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau. September 2002. Available from http://www.census.gov .

Velocci, Anthony L. Jr. "U.S. Primes Buoyed by Weapons Purchasing." Aviation Week & Space Technology, 3 February 2003.

Wall, Robert. "New Patriot Missiles Ready for Combat." Aviation Week & Space Technology, 3 February 2003.



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