Aerojet CEO vows to cut overhead, eyes 10 percent cut in workforce

By Andrea Shalal

PARIS (Reuters) - Eileen Drake, the new chief executive of Aerojet Rocketdyne Holdings Inc (AJRD.N), on Sunday vowed to keep a "huge focus" on cutting overhead costs in coming years, including a 10-percent workforce reduction and possible facility closings.

Drake, a former Army helicopter pilot and executive with Pratt & Whitney, a unit of United Technologies Corp (UTX.N), joined Aerojet Rocketdyne in March as its chief operating officer, just three days before the company announced a major cost-reduction drive and changed its name from GenCorp Inc.

She took over as CEO on June 1, when Scott Seymour retired for health reasons. Seymour had taken over the helm of the Aerojet Rocketdyne unit in February when its president, Warren Boley, was pushed out amid differences over corporate plans.

On Sunday, in her first interview since becoming CEO, Drake sought to downplay any concerns about changes and highlighted the company's strong foundation, solid backlog and committed workforce. But she said it needed to squeeze more synergies out of the 2013 acquisition of Pratt & Whitney Rocketdyne.

"We have to be sure that we really work as one company," Drake said, citing what she called opportunities to eliminate redundant organizations across the company.

Drake said she would continue a program kicked off in March to make the company's products more affordable. Initially, it calls for a 1 million square foot (93,000 sq meter) reduction in facilities in Sacramento, where the company is headquartered, and a 10-percent cut in the 5,000-person workforce over the next four years.

Before coming to the Paris Airshow, Drake has been visiting Aerojet Rocketdyne's 14 facilities in 11 states. She vowed to evaluate carefully how each of those sites was being used, and whether further facility consolidations were possible.

Aerojet Rocketdyne is also keeping close tabs on an investigation into the Oct. 28 explosion of an Aerojet-powered Orbital ATK (OA.N) rocket, a report that has been delayed for months.

Orbital and Aerojet Rocketdyne, which refurbished a Soviet-era engine to power Orbital's Antares rocket, are at odds over the root cause of the explosion. Orbital rejects Aerojet's claim that the mishap was caused by debris in the rocket's fuel tank.

A report prepared by Orbital under the oversight of the Federal Aviation Administration is expected in coming weeks.

The company plans to bid for U.S. Air Force funds to continue its work on a new U.S. rocket engine called AR-1. The company said it remained in dialogue with United Launch Alliance, a joint venture of Boeing Co (BA.N) and Lockheed Martin Corp (LMT.N) about using that new engine to replace the Russian-built RD-180 engine that now powers ULA's Atlas 5 rocket. The U.S. Congress passed a law last year that bans use of the Russian engines for military and spy satellite launches after 2019.

Aerojet Rocketdyne has joined with several other players to ask the Pentagon to investigate obtaining the data rights to the rocket, but ULA has said it does not plan to sell the rights.

(Reporting by Andrea Shalal; Editing by Sandra Maler)