BILLW@SRI-AI.ARPA (02/11/84)
From: William "Chops" Westfield <BILLW@SRI-AI.ARPA>
a541 10-Feb-84 02:56
BC-MORTON-02-10
By Daniel Rosenheim
(c) 1984 Chicago Sun-Times (Independent Press Service)
CHICAGO - Morton Thiokol Chairman Charles S. Locke said Thursday the
company is exploring all conceivable causes for this week's space
shuttle satellite failures, including the possibility of sabotage.
Following a presentation to the Investment Analysts Society of
Chicago, Locke told reporters he had no concrete basis to suspect
sabotage, but he added the company hasn't ruled out anything.
''It is just one of the things we're wondering about,'' said Locke,
whose company makes the rocket motors used to propel the satellites
into orbit. ''I have no specific reason for mentioning it, but what
happened sure is strange.''
A board of inquiry into the failure to launch successfully Westar 6
and Palapa B-2 has been assembled by McDonnell Douglas Corp. and
includes the National Aeronautics and Space Administration, the Air
Force, Hughes Aircraft Co. and Morton Thiokol.
While Locke stressed the investigation is in an early stage, he said
the most likely cause of the aborted satellite sendoff appears to
have been the failure of ''exit cones,'' which direct the thrust of
rockets used in the launch. The cones were built for Morton Thiokol
under a subcontracting arrangement with Hitco, a unit of Armco Inc.
''If an exit cone shatters, it weakens thrust,'' said Locke, noting
this week's twin fiascos followed 55 successful test launchings.
''So, we got a satellite in a 200- by 600-mile orbit instead of a
200- by 23,000-mile orbit.''
Locke said Morton Thiokol experienced a comparable problem last
summer, when a potentially dangerous weakness developed in a heat
shield protecting a shuttle booster-rocket nozzle. He said a probe
found the heat shield's construction formula had been changed by
another subcontractor, Beatrice Foods Co.'s Fiberite unit.
Although Locke said the ''entire space program rests on being able
to solve'' the satellite problem, he expressed confidence in the
outcome and added that he expects no negative repercussions for
Morton Thiokol.
''You are bound to have problems such as these,'' agreed William
Blair & Co. analyst Robert Bartels, who recalled the persistent
difficulties with heat-shield tiles slipping off earlier shuttles.
Locke said the cost of the failed satellites will be borne by
insurers, notably Lloyds of London, asserting there is no possibility
of recourse against the firm.
Noting that Morton Thiokol has 100 percent of the market for space
shuttle rocket booster motors, Locke said any NASA attempt to develop
a second supplier would cost a virtually prohibitive $200 million and
probably take five years. Indeed, Locke said he expects Morton
Thiokol's aerospace revenue to grow from $700 million in fiscal 1984
to $1 billion within ''the next couple years.''
A large portion of that increase will be derived from the company's
solid-rocket booster motors, which supply 80 percent of the thrust
needed to put space shuttles in orbit, and which gross Morton Thiokol
$18 million per launch.
Despite the possibility that persistent failures could cause delays,
NASA currently estimates the shuttle prorgam will grow from last
year's four launchings to nine this year to 24 by 1987.
Morton Thiokol - which has salt, specialty chemicals and household
products divisions, in addition to aerospace - has gone through an
extensive restructuring in the past seven years, culminating in the
1982 merger between MortonNorwich and Thiokol Corp. Locke expressed
satisfaction with the company's present composition and said he
expects neither major acquisitions nor divestitures in the
foreseeable future. Separately, Locke said he expects Morton
Thiokol's earnings per share to grow 20 percent to 26 percent to
between $6.20 and $6.50 for the fiscal year that ends June 30.
Locke also said the household product division has 15 new products
in various stages of development. Test-marketing of its Vivid liquid
bleach has been sufficiently promising that the product may be rolled
out nationally before the end of the year.
END
nyt-02-10-84 0541est
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