Avio’s stock climbed more than 5% after the company disclosed a strategic cooperation agreement with Lockheed Martin focused on increasing production of solid rocket motors (SRMs) in the United States. The announcement was made at the AUSA Annual Meeting 2026.
Under the arrangement, Avio and Lockheed Martin will cooperate to manufacture SRMs for the Extended Range Guided Multiple Launch Rocket System (GMLRS) and the Precision Strike Missile programs, subject to a qualification process. Production is slated to occur at Avio USA’s facility in Hurt, Virginia. As part of the agreement, Lockheed Martin will have access to a portion of Avio’s supply capacity for those programs.
Giulio Ranzo, Chief Executive Officer of Avio, stated that the company has committed in excess of $500 million to build new solid rocket motor production capacity in the United States. The investment is tied to expanding manufacturing capability at the new U.S. plant.
"A reliable and diverse supply chain for solid rocket motors is fundamental to our strategy for a stronger defense industrial base," said Tim Cahill, president of Lockheed Martin Missiles and Fire Control.
Analysts at Kepler Cheuvreux outlined how the qualification phase is expected to begin in Italy before moving toward production at the new Avio plant in Virginia. The analysts estimate that the agreement could utilize up to 50% of the U.S. plant’s new capacity. In their commentary they described the deal as a milestone aligned with Avio’s 2035 plan target.
Avio USA operates as a subsidiary of Avio S.p.A., with headquarters in Arlington, Virginia. The parent company is identified as an international aerospace group with more than 50 years of experience in space launchers and propulsion systems, and it employs over 1,500 people across Italy, France, the United States and French Guiana.
The cooperation and the capital commitment underscore efforts to expand SRM production capacity in the U.S. and to provide Lockheed Martin with access to Avio’s supply. The agreement remains contingent on completion of the qualification process, and the early stages of production are expected to follow qualification activity in Italy prior to full scale manufacturing at the new Virginia facility.
Market context: Avio shares reacted positively to the announcement, while Lockheed Martin’s quoted price movement shown in market data at the time reflected a modest decline.