Corporations: Successful Flights of Fancy

The hopes of California’s Lockheed Aircraft Corp. seemed to crash in 1959 with its ill-starred Electra turboprop airliners, which eventually cost $25 million to modify and were largely responsible for driving the company $43 million into the red in 1960. Many wrote Lockheed off after this debacle, but the company had some ideas of its own. In an industry made cautious by military cutbacks, huge development costs and quick obsolescence, it has moved ahead with such exotic projects as the U2, the 2,000-m.p.h. A11 interceptor, and the still-secret RS-71 world-spanning reconnaissance plane. Lockheed has not only earned a reputation as the most imaginative of the aerospace firms, but has translated its flights of fancy into highly successful products. Result: it has surged to the top of the aerospace industry, with sales of $1.93 billion in 1963.

Flair Under the Sea. Last week, giving further evidence of its imagination, Lockheed revealed plans for a bullet-shaped, delta-winged rocket plane that by 1975 may be carrying ten passengers and a crew of two on regular trips between earth and an orbiting space station. Like the U2, the A11 and the RS-71, the rocket plane is being developed in Lockheed’s famous “Skunk Works,” presided over by Clarence (“Kelly”) Johnson, the company’s engineering genius.

To demonstrate that it is already well beyond the dream stage, Lockheed conscientiously came up with a projected round-trip fare of $11,700 per passenger. This figure is based on anticipated development, hardware and maintenance costs, the number of passengers to be carried and amortization over the 500-trip life of the craft—but does not include any inflation between now and 1975.

Not confined to the air, Lockheed’s flair is currently being applied to projects on land and under the sea. Pushed to spread out and diversify by Chairman Courtlandt Gross, company engineers are building a $12 million dam in Wyoming, have developed a monorail system to relieve weary pedestrians at large airports and shopping centers, and are designing shipping containers that can be used interchangeably in truck, rail, sea and air transport. Lockheed is also working on a 300-ton hydrofoil vessel for the Navy, designing a shell-shaped undersea workboat that will carry a crew around the ocean floor in search of oil and minerals, and perfecting an emergency system that will use solid-propellant gas generators to expel water from a disabled submarine’s ballast tanks, enabling it to surface rapidly.

Old Standbys. Despite this wide diversification, more than half of Lockheed’s revenues and most of its best prospects still come from aircraft. The C-141 Star Lifter, a big new military jet-cargo plane, is now being delivered, should haul back a handsome return. Lockheed is competing with Boeing for the supersonic transport contract, which could mean as much as $8 billion to the winner over a 20-year period, and has interested the Army in a compound helicopter that uses rotors for vertical movement, jets for horizontal flight. Meanwhile Lockheed is enjoying continuing profits from such old standbys as the Polaris missile and the F-104 Starfighter. It has even converted its greatest liability into an asset: deliveries to the Navy of the P-3A patrol plane, actually a redesigned Electra, are bringing Lockheed an estimated $100 million a year.