LMT - Will Boeing and Northrop Win $82 Billion From NASA?
Space is hard -- as space investors are fond of pointing out -- and it can be particularly hard for space companies to earn a profit in a crowded market where customers are limited, and competition is plentiful.
In 2006, in an effort to minimize competition and price wars in the space sector, Boeing (NYSE: BA) tied up with rival Lockheed Martin (NYSE: LMT) to form a joint venture for launching rockets to space. By joining forces in a United Launch Alliance , or ULA, Boeing and Lockheed aimed to guarantee their space businesses would remain profitable -- because they would no longer be bidding against each other to win contracts.
That plan worked pretty well until SpaceX arrived on the scene and launched a price war against ULA itself. Now, it appears that Boeing has decided to form another big alliance in order to minimize competition in at least one sector of the space market: Deep space.
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Will Boeing and Northrop Win $82 Billion From NASA?