BOEING SELLS ROCKETDYNE UTC PAYS $700 MILLION FOR FIRM.

Byline: Gregory J. Wilcox Staff Writer

CHATSWORTH - The Boeing Co. sold its storied Rocketdyne Propulsion & Power business, which help put America in space and man on the moon, to United Technologies Corp. for $700 million, the companies said Tuesday.

Rocketdyne, formed shortly after World War II, will become part of Hartford, Conn.-based United Technologies' Pratt & Whitney Space Propulsion unit, itself a rocket engine builder.

Boeing acquired Rocketdyne in 1996 when it purchased Rockwell International Corp.'s aerospace business for $3.2 billion.

No immediate changes are planned in the operations or staffing levels at Rocketdyne's San Fernando Valley area facilities. About 1,200 people work at the Rocketdyne manufacturing facility in Canoga Park, noted for its attention-getting space shuttle main engine in the parking lot, and 1,300 at the Chatsworth administrative headquarters. About 100 employees work at the Santa Susana Field Laboratory.

``There were a lot of rumors going around about what was going to happen to us but we are not leaving California,'' said Byron Wood, Rocketdyne's vice president and general manager. ``I don't think there are mixed emotions about this. It is a great deal.''

Boeing had earlier said the 47-acre manufacturing facility on Canoga Avenue, where the space shuttle main engines, as well as those that put man on the moon, were designed and built, would be closed within five years and the property sold. Those operations are being consolidated to Chatsworth.

The sale also includes sites in Alabama, Florida and Mississippi.

Rep. Brad Sherman, D-Sherman Oaks, who serves on the congressional science and space subcommittees, said he has not been given any assurances that jobs won't leave the Valley.

But he also thinks it's possible Pratt & Whitney could move work here, too.

``It's not like Wal-Mart bought them or something like that. At least you have a company that makes its business doing aerospace,'' he said.

Unclear is what becomes of the Rocketdyne name after the deal closes.

``We value the Rocketdyne name. We're going to evaluate that as we go through the transition,'' said Pratt & Whitney spokesman Dan Coulom.

Pratt & Whitney's space business has 900 employees.

The Daily News reported Jan. 29 that a deal between the two companies was close.

Nine years ago the launch-business outlook was bright but three years later it dimmed and is still struggling to recover from the loss of the shuttle Columbia, which broke up on re-entry in February 2003.

Analysts said it seems to be a good fit. Pratt & Whitney makes upper- stage rockets and Rocketdyne makes the heavy-lifting first stages as well as the space shuttle main engine.

Mark Davis, an analyst at FTN Midwest Research in Cleveland, said Boeing has been divesting operations it doesn't consider necessary in the future.

``Boeing is really focusing in on certain aspects of its military business as well as the commercial airplane business,'' he said.

J.B. Groh, an analyst at D.A. Davidson & Co. in Portland, Ore., agreed and said Boeing probably got a fair price for the unit.

``They are starting to be more of a large systems integrator. I think they are getting away from manufacturing and more toward design and integration,'' he said of Boeing.

This is the second major move Chicago-based Boeing has made in the Los Angeles area in the past few months. In January the company announced it will phase out jet-line production in Long Beach.

(On Tuesday the company announced it is selling commercial aircraft plants in Kansas and Oklahoma to a Canadian-based investment group in a $1.2 billion deal.)

United Technologies is a $31 billion company whose holdings also include Hamilton Sundstrand aerospace systems and industrial products; Otis elevators and escalators; Sikorsky helicopters and UTC Power fuel cells.

``UTC companies are at the cutting edge of technology in all business segments and we believe Rocketdyne's rich heritage of technology excellence and innovation is a great addition to our portfolio,'' Louis R. Chenevert, president of Pratt & Whitney, said in a statement.

The companies announced the deal after the markets closed. Shares of Boeing fell 63 cents, to $52.15. United Technologies closed at $98.64, down $2.27.

Staff writer Evan Pondel contributed to this story.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com