Word: tristar
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...decision to diversify its business and compete with Boeing and McDonnell-Douglas in the manufacture and sale of commercial airliners. Lockheed had thus developed the L-1011 Tristan wide-bodied jumbo jet, but the program had misfired. Bankrolled by major U.S. banks to the tune of $650 million, the Tristar program threatened to drag the company into bankruptcy. By 1971, only a $250 million U.S. government guarantee of private bank loans enabled the company to survive. Lockheed's own projections showed that the company had to sell 300 of the jumbo jetliners in order for the program to break even...
...largely incorrect and based on false premises," struck again last week when he told the London Sunday Express of rumors that a Tory Cabinet minister had received a $ 1 million payoff three years ago to prevent Air Holdings Ltd. from backing out of its commitment to order 30 Lockheed TriStars (with options for 20 more). Since the TriStar was the one plane that could use Rolls-Royce RB-211 engines-and therefore the plane on which the Tory government's efforts to bail out bankrupt Rolls-Royce's aero-engine program depended-it seems unlikely that Lockheed would...
...contract is a compromise version of one that was aborted last May. Lockheed failed then to meet Canada's requirement that it come up with $375 million to finance initial tooling costs in Canada. Now, with a Saudi order for three TriStar jets also in hand, Lockheed has managed to borrow the $50 million needed to cover reduced startup costs. The Canadian government accepted a later delivery schedule (the first plane will arrive in May 1980) and less instrumentation on board the aircraft, which in Canada will be called the Aurora. Lockheed also agreed to place with Canadian firms...
Lockheed has partially made up for the potential loss of revenue from Canada by signing a $625 million contract for an air traffic control system for Saudi Arabia. It has also landed a Saudi order for three TriStar jumbo jets-the first of many orders that the company will need but that are not in sight, if it is to recoup the L-1011's huge development costs. Says Haack carefully: "I don't classify myself as being exuberant, but I'm beginning to get cautiously optimistic." On the confidence scale, this is surely a new note...
Nagging Concern. To survive, Lockheed needs to sell off marginal assets, like the Hollywood-Burbank Airport, and find more customers for its Tri-Star jumbo jet. Over the next ten years the company will write off as losses $500 million in TriStar development costs, and it needs more sales to cushion the blow. Defense business is encouraging: Lockheed should this year match the $2 billion in Government contracts that it booked in 1975. Modifications of the C-5 A and C-141 transports could lead over the next few years to an additional $1.5 billion in military orders...