Talks in U.S. on Rolls engine

Press, Volume CXI, Issue 32562, 23 March 1971, Page 13

Talks in U.S. on Rolls engine

(N.Z.P.A.-Reuter—Copyright) WASHINGTON, March 22. Three representatives of the British Government and the chairman of the Lockheed Aircraft Corporation (Mr Daniel Haughton) arrived in Washington today to discuss the fate of the Rolls-Royce RB 211 airbus engine with airline and United States Government officials.

The three members of the British team and Mr Haughton had had two days of meetings at the aircraft company’s headquarters in Burbank, California. Two other members of the team returned to Britain on Saturday to report to Mr Heath’s Government.

Informed sources say that the Washington talks will be with Lockheed’s TriStar customers, and representatives of banks, the Treasury and the Defence Department. The United States Government has already made it clear that it will not contribute funds to Lockheed’s commercial project; but observers say that the Government may be asked to guarantee that Lockheed will not go into liquidation if the project fails. The British Government asked Lockheed to accept a deal in which Britain would put up SUSI44m for the further development of the RB2II engine. If Lockheed would find whatever more was required. Lockheed and the airbus customers refused, and the British team was sent to renegotiate the agreement. Lockheed is already in deep financial difficulties because of over-spending on several defence contracts. The firm was helped out by the Defence Department because it is the largest defence contractor, but the Government’s attitude is that the TriStar project is a commercial one. Lockheed had been counting on the TriStar to save jjself. So far, 178 orders have

been received, but that is far short of what is needed to make a profit.