Boeing, Lockheed in Rocket Venture

The linkup would settle the companies' dispute in a trade secrets case.
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Boeing (BA) - Get Report and Lockheed Martin (LMT) - Get Report agreed to settle a late-1990s trade secrets case and form a rocket-launching joint venture.

The aerospace giants said the venture, to be called United Launch Alliance, will combine the production, engineering, test and launch operations associated with federal launches of Boeing Delta and Lockheed Martin Atlas rockets.

The companies said the linkup will reduce annual federal costs by $100 million to $150 million. They added that the combination will result in some job losses among the combined operations' 3,800 workers, though they didn't say how many.

As part of the deal, Boeing and Lockheed would settle outstanding disputes stemming from the Air Force's evolved expendable launch vehicle program. The Air Force in 2003 determined that Boeing had stolen Lockheed secrets. The findings led the Air Force to suspend three Boeing officials and increase Lockheed launches at the expense of Boeing ones. Boeing remains under investigation in that case.

The Boeing Delta IV and Lockheed Martin's Atlas V are the two families of EELVs. They were developed with the Air Force to modernize and reduce the cost of the nation's spacelift operation while providing the U.S. with assured access to space.

Boeing dropped 14 cents to $59.38, and Lockheed added 91 cents to $61.86.