The RL10 is of an age which means that it has seen many generations of launch vehicles come and go, but it keeps sneaking its way onto the manifest.
That durability is part of what makes L3Harris Technologies’ plan to sell the majority of its Space Propulsion and Power Systems business such a big deal for the industrial base. The value of a 60% interest was $845 million, with L3Harris retaining the remaining 40%, with the transaction set to close in the second half of 2026, subject to customary approvals. AE Industrial Partners, already a name familiar to space supply chain circles with holdings that include Firefly Aerospace, Redwire, and York Space Systems, plans to run carved out business under a revived Rocketdyne brand name.
The unit being separated is at a peculiar crossroads: it manufactures heritage hardware that continues to root launch and exploration architectures, but simultaneously it has a portfolio of more modern in-app propulsion and power work that’s more and more being linked to long-duration missions and cislunar logistics. In practical terms, of course, it’s where upper stage chemical engines, spacecraft electric propulsion and space power concepts have a place in the budget line – and where manufacturing choices reverberate into national programs where there’s little leeway for disruption.
At the center of that portfolio is the RL10, the hydrogen-oxygen upper stage engine that is still a staple for vehicles in government and commercial missions. The role of the engine on United Launch Alliance’s Vulcan is by far the most visible example right now, such that two RL10 engines are used to power the upper stage of Vulcan Centaur. RL10 variants have also flown on Atlas V and Delta IV and the program has been increasingly modified with the introduction of additive manufacturing in select components to lower the part count and shorten lead times. For propulsion buyers, well, that combination – flight heritage-plus manufacturing refresh – tends to be the point here: predictable performance, with a pathway to steadier deliveries, cost controls.
What L3Harris is not selling is just as important. The RS-25 program – engines that power the Space Launch System of the U.S.-space agency, which lives entirely inside L3Harris, preserves the prime role and continuity that the government usually prized in high-consequence propulsion. NASA’s current RS-25 posture is illustrative of why: the agency has certified restart of production, and is moving toward new engine production that are higher performing, including shifting to 111% of rated power level for later SLS missions. The general testing history is rich and the manufacturing push at the infamous agency has relied on modern processes such as additive manufacturing and selective laser melting to simplify parts and make them more affordable. Keeping RS-25 insulated from the Rocketdyne carve-out keeps the number of corporate seams that would otherwise be clustered through a flagship exploration propulsion line as few as possible.
The carve-out, then, draws a sharper boundary on what L3Harris would like to own outright and what they are willing to share with a specialized investor. The company has positioned the move as one of portfolio alignment that aligns with core defense priorities, particularly missile-related production and integrated defense systems but leaves civil and commercial space propulsion and power to a structure capable of pursuing different capital timelines and operational rhythms. In parallel, L3Harris also plans to reorganize into three operating segments, including missile solutions as well as space and mission systems – an internal organization meant to make such a focus more explicit.
For AE Industrial, the deal offers a chance to package disparate propulsion and power lines into a standalone platform with clearer identity and, potentially, clearer incentives. The firm has said it will revive the Rocketdyne name, positioning it as both heritage signal and industrial strategy. “Rocketdyne is more than just a company, it is the birthplace of U.S. rocket propulsion,” Kirk Konert, managing partner at AE Industrial, said. “This transaction will not only modernize and give new life to a pioneer of space and national defense technology, but it will also create a new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor. By taking the historic engine – the RL10 – and applying modern manufacturing discipline, we will honor its design while revolutionizing the production line.”
That emphasis on manufacturing discipline falls on a time when propulsion programs are being judged as much on throughput and supply assurance as on raw performance. Upper-stage power systems, electric thrusters and power processing systems do not simply “support” missions; they often drive integration schedules, limit vehicle options and determine how much margin purchasers have to take with propellant. In-space propulsion in particular has gained increased operational centrality as spacecraft architectures move towards longer on-orbit life, increased maneuver requirements, and tighter station-keeping demands.
The propulsion-and-power bundle also includes electric systems now imbedded in space exploration for deep space mission plans by the National Aeronautics and Space Administration (NASA). L3Harris has delivered three 12-kilowatt AEPS thrusters for the Power and Propulsion Element to the lunar Gateway, with the company billing the hardware as the most powerful electric propulsion system to fly in space. AEPS is a reminder that “propulsion” in today’s space economy is not confined to launch vehicle engines, but also to long-duration orbital transport, efficient station keeping, and the power electronics and thermal designs to make those systems practical.
Future-facing work – nuclear-related concepts in particular – are in a more complicated place. The L3Harris-AE Industrial partnership has highlighted the advancement of propulsion, including nuclear, but the general industry context has been mixed. DARPA’s DRACO nuclear thermal propulsion effort, for example, was terminated after the agency felt that the cost-benefit case had become weaker as the cost of launch fell, and DARPA leadership pointed to nuclear electric power as a more promising long-term direction for some missons. That shift in emphasis is important to any propulsion house plotting its R&D roadmap: nuclear thermal and nuclear electric require different supply chains, safety cases, materials expertise and ground test infrastructure, even if they have the “nuclear” descriptor in public discourse.
In that light, the Rocketdyne carve-out can be read as a structural attempt to keep multiple propulsion time horizons alive at once: a heritage engine line that still needs modernization and steady output; electric propulsion tied to deep-space logistics; and advanced concepts whose funding cycles and mission drivers do not align neatly with quarterly production metrics. Whether that mix thrives under split ownership will depend less on branding than on execution factory cadence, supplier stability, and the ability to keep qualification and configuration control tight while new manufacturing methods are introduced.
One immediate certainty is that the industry will be watching the seams: how RL10 production continuity is maintained through a new corporate boundary, how customers handle contracting and program oversight with a newly named entity, and how L3Harris manages its retained RS-25 obligations while partnering in adjacent propulsion lines it no longer controls outright.