Aerojet Rocketdyne, Inc., a subsidiary of Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD), will be engaged in a significant reorganization that will consolidate the company’s six business units into two units — Space and Defense.
The senior vice presidents of Space and Defense will be named at a later date and will report directly to CEO and President Eileen Drake. In the interim, the Space organization will report to Drake, and the Defense organization will report to COO Mark Tucker.
Since Aerojet Rocketdyne Holdings, Inc.’s acquisition of the Pratt & Whitney Rocketdyne business in June 2013, the Company has realized cost savings related to the integration totaling nearly $100 million. The recent long-term debt refinancing will save an additional $20 million of annual interest expense, and today’s consolidation will result in annual cost savings of another approximately $8 million. In addition, the Company’s Competitive Improvement Program, launched in March 2015, is on target to save an estimated $145 million annually, beginning in fiscal year 2019.
As a part of this reorganization, the Aerojet Rocketdyne Holdings, Inc. Board of Directors appointed Warren Lichtenstein as executive chairman of the company, formalizing his role and recognizing his ongoing contributions since being appointed Chairman of the Board in 2013. Lichtenstein has been instrumental in guiding strategic direction, capital allocation, financing, and merger & acquisition activity, including the acquisition of Pratt & Whitney Rocketdyne in 2013.
According to Drake, a key aspect of the alignment is placing Aerojet Rocketdyne’s newly formed Defense Business Unit headquarters in Huntsville, Alabama, along with the company’s Defense Advanced Programs, known as the Rocket Shopâ„ . These moves are designed to build upon Aerojet Rocketdyne’s existing presence near major customers in Huntsville such as the Missile Defense Agency, U.S. Army, NASA, Boeing, Lockheed Martin, and Raytheon.
The newly formed Space Business Unit will continue to be supported by different Aerojet Rocketdyne sites throughout the country, based upon program needs and core competencies.
“Today’s reorganization is another crucial step in our strategic journey to enhance the efficiency of Aerojet Rocketdyne and improve the company’s competitive posture,” said Aerojet Rocketdyne’s Drake. “This move within our aerospace and defense reporting segment better aligns our business units with our operating capabilities and customers, increases accountability at the management level, and further streamlines our business operations by reducing spans and layers in the organization, while achieving significant cost savings for our customers and the country.”