Aerojet Rocketdyne Holdings

Aerojet Rocketdyne Holdings, Inc., formerly GenCorp, Inc., is an American technology-based manufacturer based in El Segundo, California. Established in 1915, it was formerly known as the General Tire and Rubber Company, becoming GenCorp in 1984, and adopting its current name in April 2015.[2] On December 20, 2020, it was announced Aerojet Rocketdyne Holdings, Inc. would be acquired by Lockheed Martin for $4.4 billion.[3]

Aerojet Rocketdyne Holdings Inc.
TypePublic
NYSE: AJRD
S&P 600 Component
IndustryAerospace, defense, and real estate
PredecessorGeneral Tire and Rubber Company
FoundedAkron, Ohio, United States (1915 (1915))
FounderWilliam F. O'Neil
Headquarters
El Segundo, California
,
United States of America
Area served
Nationwide
Key people
Eileen Drake (President and CEO)
BrandsAerojet Rocketdyne, Easton Real Estate
Revenue US$ 1.76 billion (2016)[1]
US$ 61.20 million (2016)[1]
US$ 18 million (2016)[1]
Total assets US$ 2.25 billion (2016)[1]
Total equity US$ 34.50 million (2016)[1]
Number of employees
4,965 (2016)
Websitewww.aerojetrocketdyne.com

History

Background
Main article: General Tire and Rubber Company

Several decades after it began manufacturing rubber products, General Tire & Rubber diversified into broadcasting and aeronautics.

In the 1940s, the Aerojet company began experimenting with various rocket designs. For a solid-fuel rocket, they needed binders, and turned to General Rubber for assistance. General became a partner in the company.

Radio broadcasting began with the purchase of several radio networks starting in 1943. In 1952, its purchase of WOR-TV expanded the broadcast business into television. In 1953, General Tire & Rubber bought the RKO Radio Pictures movie studio.[4] All of its media and entertainment holdings were organized into the RKO General division.

Due to the studio and rocket businesses, General Tire & Rubber came to own a great deal of property in California. Its internal facilities management unit began commercializing its operations, landing General Tire & Rubber in the real estate business. This started when Aerojet-General Corporation acquired approximately 12,600 acres (51 km2) of land in Eastern Sacramento County. Aerojet converted these former gold fields into one of the premier rocket manufacturing and testing facilities in the Western world. However, most of this land was used to provide safe buffer zones for Aerojet's testing and manufacturing operations. Later, as the need for these facilities and safety zones decreased, the property became available for other uses. Located 15 miles (24 km) northeast of Sacramento along US Highway 50, the properties were valuable, being in a key growth corridor in the region. Approximately 6,000 acres (24 km2) of the Aerojet lands are now being planned as a community called Easton. Easton Development Company LLC was formed to assist in the process.[5]

Name change

In 1984, General Tire created a parent holding company, GenCorp, for its various businesses. The main subsidiaries were: General Tire and Rubber; RKO General, the broadcast arm of the conglomerate; DiversiTech General, a manufacturer of tennis balls and polymer products, including automotive soundproofing and home wallpapers; and Aerojet General, a defense (missile) contractor.

Through its RKO General subsidiary, the company also held stakes in: Frontier Airlines; RKO bottlers, which operated Pepsi-Cola distributorships; and several resorts and hotels, including the Westward Look resort in Tucson, Arizona.

Disconglomeration

Faced with a hostile takeover attempt, among other difficulties, GenCorp shed some of its long-held units in the late 1980s.

RKO General ran into difficulties with the Federal Communications Commission (FCC) during license renewal proceedings in the late 1980s. The FCC was reluctant to renew the broadcast licenses, due to widespread lying to advertisers and regulators. As a result of the protracted proceedings, GenCorp sold RKO General's broadcast properties beginning in 1987.

GenCorp also sold its former flagship, General Tire, to German tire maker Continental AG in order to concentrate on Aerojet.

In 1999, GenCorp spun off its Decorative & Building Products and Performance Chemicals businesses. GenCorp formed OMNOVA Solutions, Inc. into a separate, publicly traded company, and transferred those businesses into it.

GenCorp's two remaining businesses, as of 2008, are Aerojet and real estate.[6]

Aeronautics expansion

In July 2012, GenCorp agreed to buy rocket engine producer Pratt & Whitney Rocketdyne from United Technologies Corporation for $550 million.[7][8][9] The FTC approved the deal on June 10, 2013, and it closed on June 17.[10] [11][12][13]

On 20 December 2020 it was announced Lockheed Martin will acquire the company for $4.4 billion.[14]

Pension and bond problems

GenCorp withdrew its over-funded pension during the real estate boom years of 2006 and 2007. The real estate bust caused an underfunding of the pension plan of over $300 million. This caused a freeze of its pension plan on February 1, 2009 and an end to 401k match on January 15, 2009. The move was expected to save the company 29 million a year.[15]

The under-funded pension gave the company a negative net worth of -6.88 per share as of November 30, 2009.

GenCorp also is holding $142.80 million in 4% bonds due in 2010 and $147.70 million in bonds due in 2011 that the company expects to have to repurchase, as of the 2008 Annual Report. "In December 2009, the Company issued $200.0 million in aggregate principal amount of 4.0625% convertible subordinated debentures ("4 1/16% Debentures") in a private placement to qualified institutional buyers under the Securities Act of 1933. Issuance of the 4 1/16% Debentures generated net proceeds of approximately $195.0 million, a portion of which were used to repurchase $124.7 million of the 4% Notes in January 2010. The remaining proceeds will be used to redeem a portion of the 9½% senior subordinated notes ("9½% Notes"); pay accrued interest on the 4% Notes and 9½% Notes; and pay other debt issuance costs."[16]

In March 2010, GenCorp amended a $280 million revolving line of credit.[17]

GenCorp's former CEO J. Scott Neish resigned on January 6, 2010. He had been interim CEO from March 2008 (Terry J Hall resigned) head of the Aerojet division since November 2005. The new CEO was placed in as permanent and J. Scott Neish elected to resign from Aerojet. Scott Seymour had been the head of Northrop Grumman Integrated Systems from 2002 to 2008.[18]

GenCorp since 2008 has had significant changes in its Board of Directors and Corporate Officers, per the 2008 Annual Report:

"On March 5, 2008, Terry L. Hall resigned as a Director and as our Chief Executive Officer and President and our Board appointed three new Directors. The Board appointed J. Scott Neish, our Vice President and President of Aerojet, to serve as our interim Chief Executive Officer and President, pending the results of a search to identify qualified candidates to fill this position on a permanent basis. On May 15, 2008, Timothy A.Wicks, Chairman of the Board, Todd R. Snyder and Sheila E. Widnall resigned as Directors of the Company. Our Board of Directors appointed James H. Perry and Thomas A. Corcoran as new Directors on May 16, 2008, and September 25, 2008, respectively. On September 29, 2008, Yasmin R. Seyal, our former Senior Vice President and Chief Financial Officer, and R. Leon Blackburn, our former Vice President, Controller left the Company and our Board appointed Kathleen E. Redd, Vice President, Finance of Aerojet, to serve as our Vice President, Chief Financial Officer and Secretary."

Nuclear controversy

In 2008, the Government Pension Fund of Norway withdrew its investments in GenCorp due to production of nuclear weapons.[19] As of 2015, there has been no change to this status.

References
  1. "Aerojet Rocketdyne Holdings Financials".
  2. Inc, Aerojet Rocketdyne Holdings (21 April 2015). "GenCorp Announces Effective Date for Name and Stock Ticker Symbol Change". GlobeNewswire News Room.
  3. Inc, Lockheed Martin (20 December 2020). "Lockheed Martin inks $4.4 billion deal to acquire Aerojet Rocketdyne". Reuters.
  4. Press, the Associated (1955-07-19). "R. K. O. STUDIO SOLD TO GENERAL TIRE; Hughes Stock Acquired for $25,000,000 in Cash -- Use as TV Film Center Hinted General Tire Buys R.K.O. Studio From Hughes for 25 Million Cash". The New York Times. ISSN 0362-4331. Retrieved 2020-01-28.
  5. Easton Plan Home Archived 2009-03-18 at the Wayback Machine
  6. "Home - Aerojet Rocketdyne Holdings, Inc". www.aerojetrocketdyne.com.
  7. Los Angeles Times; "Rocketdyne sold to GenCorp" . accessed 12.12.2012
  8. "GenCorp to buy rocket manufacturer Rocketdyne". Flightglobal. Retrieved 23 July 2012.
  9. "Who's Where", Aviation Week & Space Technology, January 1, 2007
  10. "Home - The Fly". thefly.com.
  11. "Pratt & Whitney Rocketdyne Cuts 100 Jobs - SpaceRef Business". spaceref.biz.
  12. "U.S. clears GenCorp, Rocketdyne deal after Defense Department request". Washington, DC. Reuters. June 10, 2013. Retrieved October 7, 2013.
  13. "GenCorp Closes Rocketdyne Buy". Yahoo! Finance. Zacks Equity Research. June 17, 2013.
  14. "Lockheed makes a solid rocket motor splash, buying Aerojet Rocketdyne for $4.4B". Retrieved 2020-12-21.
  15. "Archived copy". Archived from the original on 2011-01-06. Retrieved 2010-02-25.CS1 maint: archived copy as title (link)
  16. Corporate News Article
  17. "D9EHU6DO0.htm". Archived from the original on 2012-10-23. Retrieved 2010-03-21.
  19. One producer of cluster munitions and two producers of nuclear weapons excluded from the Government Pension Fund - Global
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