Will the venerable rocket engine manufacturer Pratt & Whitney Rocketdyne and the aerospace giant GenCorp be a power couple in the race to explore space? The question likely will remain unanswered for some time, however observers say if GenCorp’s pending $550 million acquisition of Rocketdyne clears regulatory hurdles the combined company will have to match what the competition offers: lower cost space launches. Canoga Park-based Rocketdyne and GenCorp subsidiary Aerojet are legacy aerospace companies dating back to the earliest days of rocket propulsion, when the U.S. invested billions to explore space. Today, the companies are forced to operate in an environment of tightening budgets, no NASA missions, and they are competing with up-and-coming commercial ventures vying for a share of the space market. Companies like Space Exploration Technologies Corp. (Space X) in Hawthorne, Sierra Nevada Corp. in Sparks, Nev., XCor Aerospace in Mojave, Blue Origin in Washington State, and others are developing rocket engines at a lower cost than Rocketdyne and Aerojet. To compete against those companies, the combined Aerojet and Rocketdyne will have to reduce costs by eliminating duplicative activities and workers, said Michael Blades, senior industry analyst, aerospace and defense, for Frost & Sullivan, a business research and consulting firm based in Northern California. Additionally, they will have to invest in new technology to keep up with competitors with reusable rockets. Space X, for instance, wants to develop a booster rocket that could return on its own to a launch site, Blades said. “They are going to have to get into forward thinking and not just launching off a pad and recovering (a rocket) in the ocean,” he said. GenCorp’s acquisition of Rocketdyne, announced July 25, doubles the size of the Sacramento-based company and opens up opportunities to build upon the capabilities of both companies, said GenCorp CEO Scott Seymour. “We have the opportunity to build upon the proud heritage of our companies, the ability to create increased value for our customers and, best of all, to secure the future of both organizations,” Seymour said in a prepared statement. Rocketdyne is part of United Technologies Corp., a Hartford, Conn.-based aerospace and aviation company. Rocketdyne had revenue of $792 million in 2011. United Technologies announced in March it was selling Rocketdyne and two other business units to finance its acquisition of Goodrich Corp. Rocketdyne employs 1,500 workers at two campuses in the San Fernando Valley — one on Canoga Avenue and another at DeSoto Avenue and Nordhoff Street. GenCorp is a publicly-traded company made up of Aerojet and a real estate division. For the second quarter ending May 31, GenCorp reported a net income of $1.7 million, or $0.03 per diluted share, on revenues of $250 million. GenCorp employs more than 3,000 people around the world, including a small group in Woodland Hills. The companies are at a point of deciding whether to stick with NASA-generated contracts or switch to the new paradigm of Space X and other commercial ventures that will lease space to NASA to get into orbit, said Marco Cacares, senior analyst and director of space studies with Teal Group, an aerospace and defense industry analysis firm in Virginia. “Somebody is going to lose,” Cacares said. Both Rocketdyne and Aerojet are working on the Space Launch System, NASA’s successor to the Space Shuttle program that ended in 2011. The first flight of the heavy-lift SLS rocket is scheduled for 2017. Budget constraints, however, could intervene in the meantime. Cacares says SLS will not survive. For one, NASA has not been successful in funding follow up programs to the Space Shuttle, he said. Additionally, if Space X and its Falcon rocket or Orbital Sciences with its Cygnus unmanned space vehicle prove consistently successful in taking humans and cargo to the International Space Station there may be second thoughts on the Space Launch System, Cacares said. “SLS will look expendable to NASA and to many in Congress,” Cacares said. Pending deal GenCorp’s acquisition is expected to close in early 2013 and Rocketdyne will remain a separate company until then. GenCorp will finance the acquisition with cash and financing from Morgan Stanley Senior Funding LLC and Citigroup Global Markets Inc. The deal does not include the 47-acre Canoga Avenue property, which United Technologies will keep. During the transition process, Rocketdyne will focus on delivering on customer commitments, reducing costs and improving efficiencies and ensuring a safe, supportive work environment for its employees, the company said in a statement. Attempts to reach a representative of Rocketdyne, including President Jim Maser, were not successful. Rocketdyne has gone through a series of ownership changes since its start. It started out as a division of North American Aviation. In 1967, North American Aviation merged with Rockwell Corporation, becoming North American Rockwell and then Rockwell International. In 1996, the merged company sold its aviation assets including Rocketdyne to Boeing. United Technologies’ Pratt & Whitney division bought Rocketdyne in 2005. Rocketdyne and Aerojet have not competed against each other for a contract in decades, Aerojet officials said. Rocketdyne is a significant player in the mid- to large-size liquid engines market while Aerojet develops and manufactures smaller liquid engines. Aerojet also is prominent in missile defense and in developing solid rocket motors used in tactical weapons.