HUNTSVILLE, Alabama, Oct 31 (Reuters) - Investments by

L3Harris Technologies ( LHX ) into its Aerojet Rocketdyne rocket

motor unit have helped improve facilities and processes after

years of underinvestment and late deliveries to customers, an

executive told Reuters.

Aerojet was purchased by L3Harris ( LHX ) 15 months ago and is one

of only two large solid-fuel rocket motor makers for the

Pentagon. It is a key producer of weapon components as the U.S.

pushes to replace aging Minuteman III intercontinental ballistic

missiles and build an inventory of tactical missiles to deter

China.

"The challenge that we've been addressing is ... historical

underinvestment in some areas of the business," Ross Niebergall,

president of the Aerojet Rocketdyne segment, said in an

interview at one of his Huntsville, Alabama factories.

Despite its national importance, Aerojet has been under

pressure for years.

In 2019 - prior to the pandemic and a distracting 14-month

antitrust saga that ended in Lockheed Martin Corp ( LMT )

abandoning an acquisition attempt - the company's revenues were

flagging.

The Federal Trade Commission blocked the deal over antitrust

concerns weeks before Russia's 2022 invasion of Ukraine.

Deliveries from the company to customers such as RTX

were months behind schedule.

When L3Harris ( LHX ) offered to purchase Aerojet in December 2022,

the company was "many thousands" of motor deliveries behind

across multiple missile programs, Niebergall said. It was also a

gamble - no one knew how long the Ukraine war would last or what

would happen to demand.

CAPITAL SPENDING

One example was the Javelin missile, which sees heavy use in

Ukraine. "When we took over, we were 700 ship sets behind on

that missile. As of right now, we're 50 ahead. So we've gone

from being behind for more than five years to being ahead,"

Niebergall said.

Since closing on the deal, Niebergall said L3Harris ( LHX ) has

increased capital spending on the rocket motor unit by 84%.

That investment has paid off. Compared with $482 million in

revenue for the third quarter five years ago, revenue in the

L3Harris ( LHX ) business unit was $598 million this quarter, up 23.6%.

The company has digitized factory operations, cutting down

on hundreds of pages of paperwork that would accompany several

types of motors.

It has also invested $25 million into its supply chain

creating a second source for a rocket motor case that resulted

in a 600% increase in output, Niebergall said. L3's money has

helped reopen a factory and helped another supplier put on a

second shift of workers at another location.

The rocket motor case holds a chemical propellant which is

burned and focused by a nozzle shooting the missile towards its

target.

Now demand is surging for rocket motors as militaries around

the world believe future conflicts will require many more

rockets and missiles - so called "affordable mass" - precision

firepower to defeat foes.

This demand has spurred new entrants into the U.S. rocket

motor manufacturing space, but they do not have capabilities to

mass-produce motors that are qualified to be used by the

Pentagon.

The company has made progress and Niebergall was "pleased,

but not yet satisfied," he said.