ROLLS-ROYCE REQVEST U.S. refuses a guarantee

Press, Volume CXI, Issue 32563, 24 March 1971, Page 21

ROLLS-ROYCE REQVEST U.S. refuses a guarantee

(N.Z. Preu Assn—Copyright) NEW YORK, March 23. The Secretary of the Treasury (Mr John Connally) was reported to have turned down a British request for a guarantee to repay British outlays for a Rolls-Royce jet engine if the Lockheed LlOll air bus fell by the wayside, according to reliable industry sources. Mr Connally, delegated by President Nixon some time ago to monitor the delicate talks on the threatened airliner project, was said to have assured two British officials that the Government was very much concerned that Lockheed remain a healthy company.

But he added, these sources said, that there was no way the United States Administration could provide the guarantees the British were seeking if the Lockheed project collapsed. The two British delegates were Sir William Nield, permanent Secretary of the British Cabinet, and Sir William Cook, a former scientific adviser of the Ministry of Defence and now a Rolls director, who were members of a team that flew from London on Thursday to Los Angeles to pursue negotiations with Lockheed officials on a formula that might save the

Rolls-Royce engine developed for the Lockheed plane. The two sides had been miles apart in their earlier positions, but both modified their stands somewhat in two days of talks at Lockheed’s Burbank, California, headquarters. A Lockheed official said today: “We believe some progress has been made.” No-one involved in the negotiations would say how wide the gap was. And even if the British manage to work out a tentative agreement with Lockheed, it will have to win support from Lockheed’s airline customers and from the banks that will have to advance the considerably increased sums now needed to allow the delayed tri-jet airliner project to succeed.

N.Z.P.A.-Reuter said that Lockheed and the British Government are seeking a compromise to continue the RB2II engine for the TriStar, despite increased costs which sent Rolls-Royce into receivership. Britain has offered to put up SUSI 44 million to keep the project in being if Lockheed will pay any extra costs above that

Lockheed, however, has been holding out for a bigger British contribution. The talks are being conducted on Lockheed’s side by Mr Daniel Haughton, chairman of the board, and Mr A. Carl Kotchian, the company president.