Surging rocket motor demand drives Pentagon to buy from upstart Ursa Major (updated)

Minnova

20/02/2024 14:39

(Updates headline)
    By Mike Stone
       WASHINGTON, Feb 20 (Reuters) - Desperate to address
surging demand for solid fuel rocket engines, the Pentagon is
close to giving a contract for new motors to the untested,
privately held startup Ursa Major, according to two sources
familiar with the situation.
    While rocket motors themselves are relatively inexpensive,
they play a vital role in propelling billions of dollars of
missiles and rockets on order to supply the war efforts in
Ukraine and Israel, and to re-stock dwindling U.S. inventories.
    The contract - expected to be small and to fall under the
Pentagon's development programs - would be a big vote of
confidence in the upstart defense contractor as officials seek
more suppliers beyond the two dominant rocket engine makers -
Northrop Grumman  NOC.N  and L3 Harris Technologies  LHX.N .
There are other recent entrants including X-Bow Systems.
    It also shows the Defense Department's growing appetite for
risk to resolve what officials called a "major crisis."
    "As soon as I get the FY (fiscal year) '24 budget I am going
to drop it on a small company that is going to do additive
manufacturing of a solid rocket motor," Heidi Shyu, under
secretary of defense for research and engineering, told Congress
last week.
    She did not name of the company or give a size of the
contract during her testimony, but did say the company had been
working closely with the Navy, adding, "we can't wait to get
them on contract."
    A congressional aide and an industry executive who spoke on
condition of anonymity said Shyu was referring to Ursa Major, a
privately held company that uses 3-D printing to make rocket
motors.
    A representative of Ursa Major declined to comment. The
Pentagon declined further comment on the possible award. 
    Ursa Major is headquartered in Berthoud, Colorado, and
backed by investors including RTX Ventures  RTX.N , BlackRock
 BLK.N  and Eclipse.
    Ursa Major's website features the launch of a Javelin
anti-tank missile, a weapon heavily used in Ukraine's efforts to
combat the Russian invasion for the last two years. Ursa Major
says it can make rocket motors between 2 and 22 inches in
diameter.
    The industry executive from a large defense prime contractor
said Ursa Major's motors can be used in any small diameter
weapon like the new Boeing  BA.N  and SAAB  SAABb.ST  product
the Ground Launched Small Diameter Bomb (GLSDB), RTX's SM-6
rockets and Lockheed Martin's  LMT.N  Guided Multiple Launch
Rocket System (GMLRS) which are used heavily in Ukraine.
    Lockheed Martin was making about 4,600 GMLRS per year but
has ramped production since 2022. More than 5,000 have been sent
to Ukraine so far, according to a Reuters analysis. GMLRS
production is scheduled to ramp from 10,000 deliveries in 2024
to 14,000 deliveries in 2025 as demand surges. 
    President Joe Biden's 2024 budget request was the first to
procure missiles and other munitions with multi-year contracts,
something that is routine for planes and ships, as the Pentagon
signals enduring demand to top munitions makers.
    That 2024 budget, which is still not through Congress,
earmarked $11 billion to "deliver a mix of highly lethal
precision weapons" which included hypersonic prototyping and the
multiyear procurements of Joint Air-to-Surface Standoff Missile
(JASM), and Long-Range Anti-Ship Missile (LRASM), and Standard
Missile 6 (SM-6).
    Ursa Major has raised $274 million from investors and has a
valuation of $750 million according to PitchBook data. 

 (Reporting by Mike Stone in Washington
Editing by Matthew Lewis)
 ((mike.stone1@thomsonreuters.com; https://twitter.com/MichaelStone;))