ABSTRACT
Lockheed’s defense contracting and commercial business problems have been the repeated subject of headlines through the 1970s. The company has remained a top ranking Defense Department contractor, though it experienced losses in its commercial business during the decade. Lockheed began the 1970s in a state of crisis. Its giant C-5A Galaxy transport plane for the Air Force increased nearly 100% in unit costs, from an original price of $3.4 b. to $4.5 b. According to Lockheed Chairman Dan Haughton, “the cumulative impact of the disagreements on four programs creates a critical financial problem which cannot be supported out of our current and projected assets and income.” In the fall of 1976, Lockheed’s bank credit was restructured, with the approval of the banks, the Federal Government, and Lockheed’s stockholders. Several banks had urged Lockheed to write off its sizeable R&D investment in the L-1011.
