Word: tristar
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Dates: during 1970-1979
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Deputy Defense Secretary David Packard went before the Senate Banking Committee last week to testify in favor of the Nixon Administration plan for the Government to guarantee $250 million in loans for Lockheed Aircraft Corp., a sum that would allow Lockheed to complete development of the huge L-1011 TriStar commercial jet and, indeed, could save the whole company. Though Packard dutifully endorsed the idea, his testimony badly damaged its chances in Congress. Fully mindful that other money-losing defense contractors might seek similar Government aid, he warned the Senate Banking Committee against setting the "precedent" of helping "any company...
Expensive Burial. Haughton and other Lockheed chiefs argue that failure to back the loan for the three-engine L-1011 TriStar would be an economic disaster. Without this support, they say, most of the $1.49 billion already invested in the plane will be lost. Subcontractors have already spent $350 million on it, and the airlines have advanced $240 million in progress payments. Lockheed has poured in $900 million, including $400 million in loans from a consortium of 24 banks led by California's Bank of America and Manhattan's Bankers Trust...
...lost on Government contracts, Lockheed has taken more than its share of tumbles. Over the years, it rolled up $480 million in losses on four military projects. In February, already cash-starved, it ran into even more trouble on its biggest venture into commercial aircraft: the L-1011 TriStar airbus. Rolls-Royce, supplier of engines for the TriStar, went into receivership and the British government refused to finance production of the engines unless the U.S. Government assured it that Lockheed could pay for them...
...provided Congress is amenable, Lockheed and its chairman, Daniel Haughton, may have that assurance. Treasury Secretary John Connally announced that the Administration this week will ask Congress for $250 million in a loan guarantee to keep the TriStar project going. The new loans would come from private banks, but would have Government backing and would be as secure as Federal Reserve notes. If Congress goes along, the British are expected to let Rolls-Royce proceed full speed ahead on the RB-211 engines, which were designed specifically for the TriStar air frame. Then 10,000 Lockheed employees working...
...Administration bill is defeated in Congress-or even stalled past the Labor Day recess-the TriStar project may well be doomed. And if TriStar dies, Lockheed executives fear, the company itself has no chance of survival...