Boeing and Lockheed Martin, the nation's two largest defense contractors, announced late yesterday they have agreed to create a joint venture...

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Boeing and Lockheed Martin, the nation’s two largest defense contractors, announced late yesterday they have agreed to create a joint venture to produce rockets for the U.S. military.

The venture, to be named United Launch Alliance, would provide rocket launches to the U.S. Air Force, NASA and other government agencies.

The surprise agreement, if approved by federal regulators, would end a bitter rivalry in the rocket-launch business.

The two aerospace giants also agreed to drop pending litigation over accusations that Boeing stole rocket-contract information from Lockheed in 1998.

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Boeing was suspended from bidding on government launches in 2003 and stripped of some $1 billion in launch contracts after it was found in possession of thousands of sensitive documents belonging to Maryland-based Lockheed.

Two months ago, the Air Force lifted that ban, saying Boeing had corrected its ethics problems.

The joint venture would consolidate the two companies’ rocket businesses, and an undetermined number of jobs would be cut. Boeing employs about 2,300 in its rocket-launch unit, while Lockheed’s rocket business has about 1,500 workers.

Both the Boeing Delta rockets and the Lockheed Atlas rockets would be manufactured at Boeing’s production plant in Decatur, Ala.

Engineering and administrative work would be based in Denver, where Lockheed’s rocket business is headquartered.

Boeing’s Delta program headquarters in Huntington Beach, Calif., and Lockheed’s Atlas production plant in Denver would not be part of the joint venture.

Other Boeing work would remain in Huntington Beach, including research on human space flight and advanced space systems.

Rockets would be launched from Delta- and Atlas-specific launch pads at Cape Canaveral Air Force Station in Florida and Vandenberg Air Force Base in California.

The companies said the joint venture would result in annual savings to the government of about $100 million to $150 million.

Michael Gass, head of Lockheed’s rocket unit, would be president and chief executive of the joint venture. Daniel Collins, who heads Boeing’s rocket unit, would serve as chief operating officer.

The Air Force had encouraged the companies last year to team up on launches. Pentagon support could help overcome any antitrust concerns about diminished competition.

Lockheed Vice President Jeff MacLauchlan said preliminary discussions with federal officials showed that “the government is generally supportive of the approach.”

Information from Seattle Times aerospace reporter Dominic Gates, The Associated Press and Reuters is included in this report.

“Short” list of CEO candidates

CHICAGO — Boeing is working from a short list of candidates for its chief executive position but has no deadline for filling the job, Chairman Lewis Platt said yesterday.

Platt told reporters after the company’s annual shareholders meeting that the top U.S. aircraft maker is in no rush to appoint a permanent leader. Boeing fired former CEO Harry Stonecipher in March, saying his affair with a female executive broke company rules and damaged his leadership ability.

“We’re now working off a short list,” Platt said. “We will complete [the search] as quickly as we can.”

He declined to elaborate further but added that Boeing is comfortable with the leadership now provided by interim CEO James Bell, who previously was the company’s chief financial officer and now holds both positions.

“We are addressing this matter deliberately and without haste,” Platt said.

Bell is not a CEO candidate.

Reuters