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Hughes Sues Lockmart


Washington - June 27, 1997

Washington - June 27, 1997 Satellite maker Hughes Electronics Corp. ponied up for five launches of the newly-restored to service Chinese Long March space booster. This week, the company decided to sue the largest U.S. launcher maker. Is Hughes just interested in the cheapest ride to orbit, or is there more to this tale of the best-booster-for-the-buck? The space business community is wondering.

In Beijing on June 21, Hughes announced it had agreed to buy "at least five launches" on Long March rocket configurations, with the first ride in late 1998, with future launches of Hughes spacecraft occuring about about one per year thereafter. The industry saw the move as continued proof that Hughes, the world's leading builder of telecommunications spacecraft, was determined to match its rhetoric with action in getting the best deal on space launch for its customers. The Long March had been omitted from recent Hughes launch vehicle purchases, in part because sources say the firm was leery about riding the accident-prone Long March, whose builder, the China Great Wall Industry Corp. had even blamed a Hughes satellite for a 1995 launch mishap.

The two organizations eventually reached an agreement in the incident that absolved Hughes of any role in the rocket explosion. Hughes in the meantime had played a major role in the development of the McDonnell Douglas Delta III, scheduled for its maiden flight next year, as well as bookings aboard the French Ariane 4 series, the U.S. Delta II, and with Japan's next generation H2.

But now it turns out Hughes was also planning launches aboard the Lockheed Martin Proton family - flights on which had been absent from recent Hughes order books. In a lawsuit filed in Los Angeles this week, the satellite maker charged that Lockheed Martin had backed off from pledges it secretly had made to Hughes in 1994 to provide four launches of the Proton and a related package deal of options of reduced prices on other Proton launches if exercised at certain times. The terms of the pricing arrangements were not made available in court papers. Hughes claims that LockMart instead sold its launch availability and options to other buyers. The company is suing LM for $550 million in damages.

Both Hughes and Lockheed Martin have declined to comment on the lawsuit. Recently, Hughes spokespersons have complained often and loudly that there is in fact a shortage of available rockets for their increasingly larger satellites. Some industry analysts have warned, however, that the push for cheaper-by-the-launch will create a glut of space boosters in the near term, which will have devastating consequences for the commercial space industry in the long run. Community
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