Rocket-propulsion contractor Aerojet Rocketdyne, which recently moved its corporate headquarters in California from Rancho Cordova to El Segundo, will consolidate its six business units into just two.
In a reorganization announced June 26, Aerojet Rocketdyne Inc. — the operating subsidiary of Aerojet Rocketdyne Holdings Inc. (NYSE: AJRD) — will have separate units dubbed Space and Defense.
The Defense unit will be headquartered in Huntsville, Ala., where the company has a large rocket-building facility. The Space business unit will be supported by Aerojet operations at sites throughout the U.S., including a large facility near Sacramento, Calif.
Senior vice presidents of Space and Defense “will be named at a later date” and report to Aerojet chief Eileen Drake, the company said.
For now, all Space unit executives will report to Drake, while those involved in Defense operations will report to chief operating office Mark Tucker. Board chairman Warren Lichtenstein has been upped to executive chairman.
Aerojet said it expects to save $8 million annually from cost efficiencies achieved through the reorg.
“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,” Drake said. “This move within our aerospace and defense reporting segment better aligns our business units with our operating capabilities and customers. (It also) 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.”
Aerojet Rocketdyne Holdings was formed when GenCorp.’s Aerojet merged with Pratt & Whitney Rocketdyne business in June 2013. Aerojet Rocketdyne announced in May it would move about 25 corporate staff to offices in El Segundo in Los Angeles County.
Aerojet shares traded down after the reorg news was announced amid a broadly downbeat day on Wall Street. The stock — which closed off 33 cents, or almost 2 percent, at $17.43 — has been trading roughly mid-range of a 52-week range of $13.98-$24.35.