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ANNUAL MEETINGS : MX Delivery Is Back on Track, Northrop Reassures Investors

May 21, 1987|JESUS SANCHEZ

Northrop, apparently making some headway in clearing up delivery delays of key components of the MX missile's guidance system to the Air Force, said Wednesday that it expects to begin meeting the Air Force's monthly delivery requirements sometime this summer.

Speaking at the company's annual shareholders meeting in Hawthorne, Chairman Thomas V. Jones said: "We did have problems with vendor parts that slowed down our delivery." But, he continued, "we expect . . . sometime this summer to meet the requirements of the Air Force."

Delays and shortages of the guidance devices--basketball-sized instruments called inertial measuring units--had slowed down the MX missile program. The Pentagon suspended payments to Northrop in February because it had not met delivery schedules.

Jones said the suspension of payments--about $40 million worth, as of last month--has affected Northrop's cash flow, but not by a significant amount.

The company is not out of the woods yet, however. It had delivered only 33 of the 50 guidance mechanisms it was supposed to have delivered by the end of April, according to the Air Force's Ballistic Missile Office in San Bernardino. And Northrop does not expect to be able to clear up that backlog any time soon.

Jones, in his speech to shareholders, also took aim at congressional efforts to require competition on the the multibillion-dollar Stealth bomber program, which is now under contract to Northrop. "It's not quite clear how duplicate production would improve a program planned for 132 aircraft," he said. "The Air Force is going to look at it, as they look at all possible alternatives for all programs all the time."

Lower-than-expected profit margins on the Stealth bomber project were believed to have been behind a $90-million, third-quarter writeoff on a secret government contract.

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