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Historical snapshot that puts some things into perspective

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posted on Mar, 25 2020 @ 01:28 PM
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This was posted today, and I had to shake my head.


An unexpected problem plunges a promising new airliner program into crisis mode, potentially dragging the world’s largest aerospace company down along with it.

Billions of losses, meanwhile, pile up on another new aircraft created for the U.S. Air Force’s mobility fleet, thanks to the company’s risky strategy to bid low on a fixed-price development contract. In desperation, the firm’s executives come begging to Congress for a controversial loan guarantee, as whisperers on Wall Street wonder whether the company can survive.


Sounds exactly like what's been happening to Boeing lately doesn't it? Only this is talking about Lockheed in 1971. The L1011 program was due in 1971, but troubles with the engines put Rolls Royce into receivership and delayed the introduction. They had also gone $1.8B over on the C-5 program(almost $12B today). They went hat in hand to Washington, who agreed to a loan that they were able to pay back.

aviationweek.com...




posted on Mar, 25 2020 @ 01:44 PM
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a reply to: Zaphod58

They always bid low because they know they can make it up when the Government starts adding requirements. That's when the vendor sticks it to the Government. Almost all contracts are firm fixed these days. There are a few other contact methods...time and materials but rarely used. More difficult to manage. I'm not even sure what vendor could deliver right now. Materials have to be drying up and then the social distancing, shutting down...everybody is hurting.



posted on Mar, 25 2020 @ 01:50 PM
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a reply to: Stupidsecrets

That's the big difference between 1971 and now. Lockheed only had to deal with supplier and construction issues, where Boeing is dealing with the pandemic as well as their screwups.



 
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