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Boeing Signs Contract to Complete 10 Satellites for Wireless Venture

August 25, 2003|From Times Staff and Wire Services

Boeing Co., in what could be a big boost for its battered satellite operation, said Sunday that it has signed a contract to complete construction of 10 partly built satellites for ICO Global Telecommunications.

Boeing, a leading military and space contractor, could get hundreds of millions of dollars in revenue from resuming work on the project.

ICO is a venture backed by cellular telephone pioneer Craig McCaw and, like Boeing, has been hit hard by the declining demand for commercial satellites.

"In a very depressed commercial satellite market, any kind of development like this is very good news," Boeing spokesman Dan Beck said.

An ICO representative was not available for comment.

Boeing's satellite unit is based in El Segundo.

Under the agreement, Boeing will dust off 10 unfinished satellites and deliver them to ICO beginning in 2005, Boeing officials said.

ICO is planning to build a global network of wireless voice, Internet and other data services for personal devices. McCaw led a group of international investors to provide $1.2 billion to acquire the ICO business in May 2000. In April, ICO took control of satellite phone provider Globalstar in a $55-million deal after Globalstar filed for Chapter 11 protection.

But Boeing has had quality control problems at its El Segundo unit.

It was one of three Boeing units suspended by the Air Force last month after an investigation showed Boeing illegally acquired thousands of documents from rival Lockheed Martin Corp.

In fact, Boeing today will try to persuade the Air Force to reinstate the units as government contractors by detailing the company's efforts to upgrade its ethics policies and training.

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