Guided Missile and Space Vehicle Propulsion Units and Propulsion Unit Parts

SIC 3764

Companies in this industry

Industry report:

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 that are 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.

Industry Snapshot

Two basic types of propulsion systems are used for guided missiles and space vehicles--solid-fueled and liquid-fueled engines. Solid-fueled engines are more commonly used because liquid fuels require storage at very low temperatures. Other rockets produced by this industry include 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 beginning of the twenty-first century, industry research was focused on developing 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 in the early 2010s.

According to the U.S. Census Bureau, in 2009 the value of shipments of propulsion units, engines, and propulsion unit parts for guided missiles and space vehicles was slightly more than $4.5 billion. Approximately 25 percent of this total was attributed to civilian markets, while military applications accounted for the majority. The industry had suffered from a lag in spending on space exploration, as well as a decreasing number of satellite launches. In 2010, however, the Aerospace Industries Association (AIA) reported that sales of missiles had increased from $22 billion in 2007 to $26 billion in 2010. Sales for 2011 were expected to remain steady.

Organization and Structure

Establishments in this industry in the early twenty-first century were generally subcontractors for producers of complete guided missiles and space vehicles. Primary contractors and subcontractors were hired by a single customer. The industry's shipments manufactured under government contracts primarily were 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.

The first guided missiles and military aircraft powered by propulsion systems were used during World War II. During the war, only the Germans used propulsion guided missiles, although other countries possessed the technological capabilities to produce them. It was not until after the war that those 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 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.

At the beginning of 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. As the Cold War ended, new propulsion systems for military and space exploration programs were limited to prototypes, which were taken to full-scale production on the basis of need and available funding.

With federal cut-backs, a number of fixed-price contracts resulted in 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 ended up suing each other over contract terms. In 1993 the U.S. government appropriated funds for some of the losses.

In 1995 U.S. manufacturers of propulsion units, jet engines, and propulsion unit parts for guided missiles and space vehicles recorded $2.4 billion in gross sales, which were divided roughly 50/50 between military and nonmilitary markets. Military markets accounted for $1.1 billion in sales, while civilian markets were responsible for $1.3 billion. 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 industry (complete aircraft, space vehicles, missiles, and selected parts) was $101 billion, with the military responsible for $52 billion and nonmilitary responsible for $49 billion. 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 high-cost systems. U.S. export forecasts for guided missiles and space vehicle parts were $5.9 million for 1999 compared to $5.6 million in 1998. Import forecasts from foreign countries were $39 million in 1999 compared to $37 million in 1998. The largest foreign supplier to the U.S. aerospace market in 1999 was France.

Like other aerospace industries, the guided missile and space vehicle propulsion industry was restructured as a result of federal defense budget cuts. According to industry leaders, by the end of the century the industry was smaller, with many individual companies having a larger market share than they had held in the mid-1980s.

By the early years of the first decade of the 2000s, 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.

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. 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 against terrorism in Iraq and Afghanistan, defense contractors benefited from increased spending on weapons. For example, the U.S. Department of Defense in 2003 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 U.S. military had plans to purchase some 2,200 PAC-3 interceptor missiles from Lockheed Martin, along with 1,400 Patriot PAC-2 GEM+ missiles from Raytheon.

The continuing U.S. involvement in Iraq from the middle to the end of the first decade of the 2000s stimulated the defense budget and increased demand for guided missiles. Missile sector sales increased 10 percent to $14.8 billion in 2004, the highest level in 12 years, yet dropped to $13.2 billion in 2008, still an increase of nearly 7 percent over 2007. However, commercial satellite launches remained sluggish. Although the need for satellite communications was growing, newer satellites had increased power, a longer service life, and could hold more transponders. For example, according to research firm Futron Corporation, a satellite launched in the middle of the first decade of the 2000s could do the work of nine satellites launched in 1990. Accordingly, the Commercial Space Transportation Advisory Committee projected a flat market through 2013, with an average of 18 commercial launches annually.

Following the Columbia space shuttle disaster in February 2003, the U.S. space program, which was already suffering from numerous years of underfunding, was ramped down even further amid safety concerns. However, as the space shuttle and Delta family of expendable rockets were replaced with new components, millions of dollars in new contracts were needed to meet demand. With the largest chunks of the program likely to be won by Boeing or Lockheed Martin, the leading propulsion manufacturers looked for high-dollar subcontracting opportunities.

In September 2007, the $446-million NASA Dawn mission lifted off on an eight-year, 3-billion-mile journey powered by a solar electric ion propulsion system (IPS). Flying to and orbiting two separate bodies hundreds of millions of miles apart, the Dawn spacecraft had more propulsion capability than any previous spacecraft and was able to accelerate nearly 7 miles per second.

Current Conditions

The U.S. Census Bureau valued the space vehicle propulsion unit and propulsion unit parts manufacturing industry at $3.8 billion in 2009. Of this total, complete missiles, space vehicle engines, and propulsion units made up almost 60 percent of shipments. Research and development for those products was valued at $642 million. Other services accounted for $341 million. The missile/space vehicle engine/propulsion parts and accessories sector of the industry shipped products worth more than $590 million, and other, nonspecified products in the industry comprised $23 million.

Although the manufacture of guided missile and space vehicle propulsion units and propulsion unit parts had declined due to the economic slowdown at the end of the first decade of the 2000s and cuts in defense spending, by 2010 some were predicting a rebound. For example, an IBISWorld report in August 2011 predicted that "ongoing conflicts in Afghanistan and other countries and increased spacecraft development by private companies will keep the [space vehicle and missile manufacturing] industry in orbit." even though U.S. troops were being withdrawn from Iraq.

As with other industries that depend on government procurement as a major source of revenue, the propulsion industry was required to adjust to ever-changing budgets and political agendas. Such an environment favored companies that could adjust to market conditions and maintain the necessary infrastructure to meet upswings in demand.

Industry Leaders

In the early 2010s, Alliant Techsystems Inc. (ATK), based in Minneapolis, Minnesota, was one of the leaders in supplying aerospace technologies to the United States and its allies. In fiscal year 2007, 79 percent of company sales came from contracts with agencies of the U.S. government and its prime contractors and subcontractors. 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. ATK had previously acquired Thiokol Corp., which formerly was part of Cordent Technologies, and renamed it ATK Thiokol. Thiokol had been established in 1969 as Morton-Norwich Products Inc. and changed its name later that year to Morton Thiokol Inc. ATK sales improved steadily during the first decade of the 2000s, increasing from $2.1 billion in 2003 to $3.5 billion 2007 and to $4.8 billion in 2010. The company employed 15,000 people in 2011.

In February 2005, Pratt & Whitney, a subsidiary of United Technologies Inc., purchased Boeing Corp.'s propulsion unit, Rocketdyne, for $700 million, creating a rocket propulsion company capable of generating more than $1 billion in revenues. The deal combined two of the nation's largest rocket makers. Both companies suffered cutbacks due to the sluggish market but together were poised for a comeback in the early 2010s. In 2010 East Hartford, Connecticut-based Pratt&Whitney employed 36,000 people and generated almost $12.4 billion in overall revenue.

GenCorp Inc. in Rancho Cordova, California, was established in 1915 as General Rubber Manufacturing Co. Its two divisions at that time were Aerojet and a real estate component. Aerojet manufactured sensors, warheads, and munitions used in the aerospace industry. The company was most widely known for its Titan IV engines and its second stage Delta engines, which allowed spacecraft to maneuver in orbit. Net sales for GenCorp Inc. were $857.9 million in 2010, and the company employed 3,135 people.


The industry employed 15,486 people in 2009, according to the U.S. Census Bureau. In the middle of the first decade of the 2000s, aerospace employment had declined to its lowest level in 50 years, according to the Aerospace Industries Association. An estimated 25 percent of the industry's workers were primarily aeronautical, astronautical, electronic, and industrial engineers. Other occupations involved in the manufacture of guided missile and space vehicle propulsion systems included systems analysts, computer scientists, specialized technicians, production managers, and machinists. Only 33 percent of employees were production workers, who earned an average $30.79 an hour, much more than production workers in other manufacturing sectors.

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