COLORADO, Springs — After a period of declining revenue attributable primarily to the 2011 retirement of NASA’s space shuttle fleet, rocket and space propulsion provider Pratt & Whitney Rocketdyne (PWR) expects its business to level off or even increase modestly in the next five years.

PWR President Jim Maser said the company has cut its staff by 40 percent, to about 2,000 employees, and is reducing its factory space by 50 percent, a process expected to be completed by the end of the year. Meanwhile, the Canoga Park, Calif.-based company has begun ordering long-lead components for a large batch of rockets to be ordered by the U.S. Air Force, has a number of development projects under way for NASA, and builds a key component of a missile defense system that is expected to generate significant sales in the years ahead, he said.

In an April 8 interview here at the National Space Symposium, Maser and other PWR officials said the consolidation effort was undertaken independent of the company’s impending sale to rival Aerojet of Sacramento, Calif. PWR, currently owned by United Technologies Corp. of Hartford, Conn., is being sold to Aerojet in a $550 million transaction now expected to close during the first half of 2013.

The U.S. Federal Trade Commission’s antitrust division is reviewing the proposed acquisition, which would leave the United States with just one independent suppler of liquid-fueled rocket engines. Approval is taking longer than expected; Aerojet announced in January that it would be divesting one of its missile defense-related propulsion businesses to mollify antitrust regulators.

Maser and other company officials said they are providing data to support the regulatory review process but otherwise had little to say about the transaction.

One of PWR’s steadiest business lines these days is the Evolved Expendable Launch Vehicle (EELV) program, which produces the Atlas 5 and Delta 4 rockets that launch most U.S. government satellites and virtually all national security missions. Denver-based United Launch Alliance, a Boeing-Lockheed Martin joint venture, is prime contractor on the program.

The Air Force late last year won approval for a controversial block buy of up to 36 rocket cores from United Launch Alliance as part of a strategy to rein in soaring costs on the EELV. Much of the cost growth has been attributed to PWR-supplied propulsion systems, whose price tag has gone up to cover part of the company’s overhead expenses that previously were absorbed by the space shuttle program.

Maser said PWR has been authorized by United Launch Alliance to begin ordering long-lead components for the engines it manufactures for the EELV program. PWR builds the RL10 upper-stage engine, different variants of which are used for the Atlas 5 and Delta 4, and the RS-68 main engine for the Delta 4.

Jim Maus, PWR’s director of enterprise execution and efficiency, said the company has not finalized the terms of its contract with United Launch Alliance for the EELV engines. But he said the average price for the RS-68 engines has dropped some 30 percent in its latest bid compared with its previous proposal.

United Launch Alliance’s block buy contract with the Air Force is still in negotiations, according to Jessica Rye, a spokeswoman for that company.

Maser said PWR, in addition to downsizing its staff and infrastructure, has become more efficient by increasing its use of common facilities and tooling across engine product lines. This, coupled with the quantity of engines being produced for the EELV block buy, helped drive the cost down. But he conceded that these cost savings would not be realized immediately because the company had to make investments to make its operation more efficient.

PWR’s NASA business, meanwhile, is concentrated primarily in two programs: the heavy-lift Space Launch System, for which the company is modernizing two Apollo-era engines; and the Commercial Crew Program, where Pratt is a propulsion provider for the CST-100 capsule being developed by Boeing Space Exploration of Houston.

NASA in August awarded Boeing $460 million to refine the design of the CST-100, which would launch atop an Atlas 5 rocket to deliver crews to the international space station on a commercial basis. If Boeing is ultimately selected to deliver crews to the station, PWR would supply the CST-100’s launch abort motor and in-space maneuvering thrusters.

The launch abort motor is adapted from a liquid-oxygen and kerosene-fueled engine design that PWR produced for NASA in the 1990s for an experimental rocket that never flew, said Ron Ramos, PWR vice president for exploration and missile defense. The CST-100 version, which would take the capsule and its crew to safety in the event of a problem during launch, would generate 40,000 pounds of thrust and be fueled by liquid hydrazine rather than kerosene, he said.

Most launch abort motors use solid propellants. Ramos said that if there is no need for a launch abort, the fuel reserved for that purpose could be used for the less-powerful in-space maneuvering thrusters, which were adapted from a missile defense program.

PWR also supplies the divert and attitude control thrusters for the Theater High Altitude Area Defense system, which is designed to intercept short- to medium-range missiles. The thruster system is used to propel the interceptor’s kill vehicle in the final phase of an intercept.

Denver-based Lockheed Martin Space Systems, the prime contractor on the Theater High Altitude Area Defense system, anticipates substantial demand not only from the U.S. Missile Defense Agency but also from U.S. allies in the years ahead.

Warren Ferster is the Editor-in-Chief of SpaceNews and is responsible for all the news and editorial coverage in the weekly newspaper, the Web site and variety of specialty publications such as show dailies. He manages a staff of seven reporters...