Mirror Review
January 14, 2026
The L3Harris Defense Department Investment worth $1 billion marks one of the most consequential interventions in the U.S. defense industrial base in decades.
The DoD L3Harris investment is designed to expand domestic solid rocket motor production, directly addressing a critical bottleneck in America’s missile supply chain at a time when global demand for precision munitions is rising sharply.
Unlike traditional procurement contracts, this initiative positions the Department of Defense as a strategic economic investor rather than only a customer.
Through a first-of-its-kind equity partnership with L3Harris Technologies, the government is backing the infrastructure that powers modern missile systems and ensuring long-term capacity, stability, and readiness.
The investment aligns with broader efforts to rebuild industrial depth in areas where decades of consolidation have left the United States exposed. Solid rocket motors sit at the center of that vulnerability.
Why Solid Rocket Motors Matter
- Solid rocket motors are the propulsion backbone of most U.S. tactical and strategic missiles.
- They power air-defense interceptors, long-range strike weapons, and precision artillery rockets used across all combat domains.
- Unlike liquid-fuel systems, solid motors are stable, storable, and can be launched on demand, making them indispensable in modern warfare.
- Yet despite their importance, domestic production capacity has struggled to keep pace with demand.
- Over time, consolidation reduced the number of U.S. suppliers to only a handful, creating fragile supply lines vulnerable to disruption, surging wartime demand, and aging infrastructure.
The L3Harris Defense Department Investment directly targets this weakness by funding facility expansion, automation, and workforce growth. This ensures the U.S. can produce rocket motors at scale, quickly, and safely.
Inside the $1B L3Harris Defense Department Investment Structure
The funding is being deployed through the Industrial Base Analysis and Sustainment (IBAS) authority, which allows the Pentagon to invest directly in manufacturing capabilities deemed essential to national security.
Rather than a grant or procurement award, the $1 billion commitment takes the form of convertible preferred equity in L3Harris’ newly formed Missile Solutions business.
This structure provides immediate capital for expansion while allowing taxpayers to share in the long-term value created by the investment.
Key details of the investment include:
- Total commitment: $1 billion
- Instrument: Convertible preferred equity
- Primary objective: Expand solid rocket motor production capacity
- Funding authority: Industrial Base Analysis and Sustainment (IBAS)
- Partners: U.S. Department of Defense and L3Harris Technologies
- IPO timeline: Second half of 2026
This approach signals a clear shift in how the Pentagon is supporting the defense industrial base, favoring long-term capacity building over short-term contract volume.
Creation of the Missile Solutions Business
Central to the strategy is L3Harris’ decision to establish Missile Solutions as a dedicated business unit. The move follows L3Harris’ 2023 acquisition of Aerojet Rocketdyne, which brought extensive propulsion expertise under its umbrella.
By separating propulsion and missile-related assets into a focused entity, L3Harris is creating a pure-play missile and rocket motor supplier.
This structure allows Missile Solutions to serve all major missile prime contractors as a neutral partner, rather than competing with them as a vertically integrated rival.
Missile Solutions includes critical propulsion programs, large-scale manufacturing facilities across multiple states, and decades of institutional knowledge in rocket motor design and production.
L3Harris will retain a controlling interest following the planned public listing, ensuring continuity and alignment with defense priorities.
Expanding Domestic Production Capacity
The $1B L3Harris Defense Department Investment is primarily aimed at scaling production capacity for solid rocket motors, both in volume and speed.
Funds will be used to:
- Expand and modernize existing manufacturing facilities
- Add automated propellant casting and curing lines
- Improve safety systems and quality control
- Increase workforce hiring and training
- Reduce production cycle times
Facilities in states such as Arkansas, Alabama, and Virginia are expected to see significant upgrades, allowing Missile Solutions to meet both current requirements and future surge demand.
The long-term objective is to more than triple U.S. solid rocket motor production capacity by 2030, creating a durable industrial foundation that can support prolonged conflict scenarios if necessary.
The Strategy Behind Direct Investment
Defense officials have framed the deal as a necessary response to structural weaknesses exposed by years of underinvestment and unpredictable procurement cycles.
By investing directly in suppliers rather than relying solely on contracts with prime contractors, the Department of Defense aims to stabilize demand signals, encourage private capital participation, and reduce the risk of supply chain failure.
“This investment is about securing the foundations of our munitions supply chain,” defense acquisition leadership noted in the official announcement. “Without propulsion, missile production stops. This partnership ensures that doesn’t happen.”
The model also provides L3Harris with the financial certainty required to invest aggressively in long-term infrastructure rather than limiting expansion to short-term contract needs.
Path to a 2026 IPO
Missile Solutions is expected to be spun off as a publicly traded company in the second half of 2026. The IPO is designed to unlock value while increasing transparency and accountability for a business that will play a central role in U.S. national security.
Under the current plan:
- L3Harris will maintain a controlling ownership stake
- The U.S. government will not hold board seats
- Convertible equity will convert into common shares at IPO
- The company will operate as a pure-play missile and propulsion provider
Financial markets have responded positively to the announcement, viewing the investment as validation of the long-term demand outlook for missile propulsion and a catalyst for shareholder value creation.
Strengthening the “Arsenal of Freedom”
Defense leaders have increasingly emphasized the need to rebuild America’s manufacturing strength as a pillar of national security.
The phrase “Arsenal of Freedom” has re-entered policy discussions, reflecting a renewed focus on industrial readiness rather than just technological superiority.
The L3Harris Defense Department Investment embodies this shift. It prioritizes factories, workers, and production capacity. This recognizes that advanced weapons are only effective if they can be produced at scale and sustained over time.
By reinforcing propulsion manufacturing, the investment strengthens every downstream missile program that relies on it.
Conclusion
The $1B L3Harris Defense Department Investment represents a decisive move to secure one of the most critical components of modern military power: solid rocket motors.
By shifting from a transactional buyer to a strategic investor, the U.S. government is reshaping how defense capacity is built and sustained.
For L3Harris, the DoD investment accelerates the growth of Missile Solutions into a cornerstone of the global missile supply chain.
For the United States, it delivers industrial resilience, production scalability, and long-term readiness in an increasingly contested security environment.
As the Missile Solutions entity advances toward its 2026 IPO, the partnership stands as a blueprint for how public capital and private expertise can work together to protect national security, today and for decades to come.
Maria Isabel Rodrigues
