• Northrop Grumman will move production of the engines and structures for its Antares rockets from Russia and Ukraine to the U.S.
• The company is partnering with Texas-based Firefly Aerospace to make the change.
• The companies will produce an upgraded version of the rocket, as well as a new rocket.

Northrop Grumman is moving production of the engines and structures for its Antares rockets to the U.S. from Russia and Ukraine, a move that will have cascading effects throughout the space industry.

The aerospace giant said Monday it will move Antares production fully to the U.S. through a partnership with Texas-based Firefly Aerospace. Northrop Grumman had purchased Russian RD-181 engines to power the Antares 230+ series, and the rocket's main body was manufactured by Ukraine's Yuzhmash State Enterprise.

The new arrangement mainly resolves the break in Antares manufacturing caused by Russia's invasion of Ukraine in February. But in addition to salvaging the Antares rocket series, the cost-sharing deal also helps ensure NASA's cargo missions to the International Space Station keep flying regularly and brings muscle to Firefly's plan to build a larger rocket called Beta.

Northrop Grumman and Firefly Aerospace will jointly produce an upgraded version of the Antares rocket, which will be known as the Antares 330. Northrop will provide the A330's upper stage, avionics, software and launch site operations. Firefly will supply seven engines and build the A330's largest structure, the first stage booster.

"Our target is mid-to-late 2024 to launch the first A330" rocket Firefly interim CEO Peter Schumacher told CNBC.

The schedule still leaves a minimum gap of 12 months between the last 230+ launch and the 330's debut. Northrop Grumman has been launching NASA cargo missions to the International Space Station about every six months, using Antares rockets and its Cygnus spacecraft. While the company has Antares rockets for two more cargo missions, scheduled for this fall and spring 2023, Northrop Grumman's director of launch vehicles, Kurt Eberly, told CNBC that the company purchased three launches on SpaceX's Falcon 9 rockets to continue flying Cygnus cargo missions.

"It's super important to keep the six-month cadence going" for NASA, Eberly said, adding that the Antares 330 series will be larger and more powerful than the 230+.

Northrop and Firefly's partnership also has a longer-term goal of building a new rocket, which the companies for now are calling MLV, or medium launch vehicle.

The companies hope to debut the MLV by the end of 2025, tapping a part of the rocket marketplace that Eberly said is underserved. Northrop Grumman had been looking to replace the Antares entirely because the current Russian-dependent configuration prohibited the company from bidding on Pentagon launch contracts, Eberly said. It also wasn't priced competitively in the commercial market, he said.

Schumacher said Firefly has been working on the deal with Northrop Grumman for about at year. Eberly added that Russia's invasion accelerated the partnership and "gave us additional impetus to proceed."

For Firefly, the company's near-term challenge is reaching orbit with the second launch of its Alpha rocket, after the debut last year failed mid-flight. Schumacher said Firefly completed a fueling milestone for the second Alpha launch on Monday, known as a wet dress rehearsal – with a hot fire engine test scheduled for later this week.

"We are planning on our first launch window for that second flight, [which opens] on Sept. 11," Schumacher said.