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Northrop Sues U.S. to Recoup Loss on Missile

December 03, 1996|Times Staff and Wire Reports

Northrop Grumman Corp. is suing the U.S. government to recover $764.7 million it says it's owed for a missile the Air Force canceled two years ago. The Los Angeles-based company said it wants its "uncompensated costs, investments and a reasonable profit" related to the Tri Service Standoff Attack Missile, which was canceled in December 1994 because of cost overruns and developmental problems. Northrop Grumman recorded more than $620 million in losses related to the missile's development. The laws regulating cancellation of government projects require the government to compensate Northrop Grumman for costs related to the missile's development. However, the Air Force and the company have been unable to agree on a total. Northrop Grumman stock fell 87.5 cents to close at $82.25 on the New York Stock Exchange.

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