Aerojet Rocketdyne [AJRD] is eliminating roughly 10 senior-level positions as it consolidates its six business units into two: space and defense, according to a company spokesman.
The senior vice presidents of the space and defense business units will be named at a later date and will report directly to Aerojet Rocketdyne CEO and President Eileen Drake, according to a company statement. In the interim, the space organization will report to Drake and the defense organization will report to COO Mark Tucker.
Aerojet Rocketdyne spokesman Glenn Mahone on Monday declined to say if the heads of the business units being consolidated would have their positions eliminated or if they would stay with the company. He said Aerojet Rocketdyne is looking to save $8 million a year from this company consolidation. Drake, in a statement, called the reorganization another crucial step in Aerojet Rocketdyne’s strategic journey to enhance its efficiency and improve its competitive posture.
Aerojet Rocketdyne will also place its newly-formed defense business unit in Huntsville, Ala., along with the company’s defense advanced programs, commonly known as the Rocket Shop. Aerojet Rocketdyne believes these moves are designed to build upon the company’s existing presence near major customers in Huntsville such as the Missile Defense Agency (MDA), the Army, NASA, Boeing [BA], Lockheed Martin [LMT] and Raytheon [RTN].
Mahone said the company would likely move 40 positions to Huntsville when it moves the Rocket Shop and defense business unit there. He expected the moves to Huntsville would take between 12 and 18 months to complete. Mahone said Aerojet Rocketdyne would run its space business unit from a variety of locations, including Canoga Park, Calif.; Redmond, Wash.; West Palm Beach, Fla.; and Sacramento, Calif.
Aerojet Rocketdyne last week announced a major refinancing that the company expects will provide it with greater financial flexibility to execute its long-term strategic agenda and substantially reduce its interest expense. Aerojet Rocketdyne expects the annualized reduction of interest expense to be approximately $20 million. There will also be a one-time charge associated with the partial write-off of prior refinancing fees, which is excluded from the above interest expense.
Mahone said the parent company of Aerojet Rocketdyne, Aerojet Rocketdyne Holdings, moved from Sacramento to El Segundo, Calif., just over a month ago. The headquarters for Aerojet Rocketdyne remains in Sacramento.