Huge money loss feared

Press, 30 January 1986, Page 4

Huge money loss feared

NZPA Chicago The shuttle loss could deal a serious blow to the entire aerospace industry because so many companies have a stake in the programme, industry analysts said. “This is a major setback for the entire aerospace industry because the success of the shuttle programme reflected well on so many companies,” said Christopher Demisch, of First Boston Corporation. “A setback of this nature is severe.”

Among the principal contractors for the shuttle vehicles and rocket boosters are Rockwell International Corporation, . Martin Marietta Corpora- ; tion and Morton-Thiokol i Corporation. The Lockheed Corpora- ; tion has the contract to ready the shuttle for flight. Stock prices of these companies fell after the explosion that destroyed the shuttle. Morton Thiokol, Inc., ; which built the twin re- . usable solid. rocket ■ boosters strapped astride . the shuttle Challenger, was down 2% dollars to ' SUS 34. It derives about 38 per cent of its profits from the aerospace sector and about half of that from the rocket boosters, : analysts estimated.

Rockwell built the four flying vehicles — Columbia, Challenger, Atlantis and Discovery — for SUS 3.3 billion ($6.27 billion). Its stock was down 1% dollars to 333/ 8 dollars.

Martin Marietta, which produces the towering liquid oxygen-hydrogen fuel tank that feeds the shuttle engines during launch and ascent, was down iy 8 dollars to 33 y 2 dollars. Lockheed’s contract was for SUS2.S billion. Its stock was off 1% dollars to SUS4S. Rockwell officials would not comment on the explosion.

A Morton-Thiokol spokesman, Carson Trenor, said there had been no suspicion of any problem with solid rocket motors it built for this flight He said the shuttle motors were reusable, but did not know if the ones on this Challenger had been used on previous flights.

Morton-Thiokol was also responsible for cleaning the motors after they have been retrieved from a flight. George Podrasky at Duff and Phelps said Lockheed might be the company affected most by the tragedy because it has the shuttle processing contract “If shuttle launches are held up, Lockheed will have fewer vehicles to turn around. That may « mean less income,” he i said. J

Mr Podrasky said • research on President J Reagan’s Strategic De- . fence Initiative depends i on a reliable shuttle ; launch schedule.

Delays in launches because of an investigation into the explosion may force the Defence Department to consider using expendable launch vehicles as alternatives, he said. “I think the Defence Department will press for continuing the expendable vehicle pro-, gramme.” .. w