Lockheed Comes Back

For two years Lockheed Aircraft Corp. had known nothing but trouble. Its ill-starred Electra turboprop airliner tarnished the company's name and lost it millions. Its eight-seat JetStar executive plane landed on the market with a thud, and in 1960 Lockheed rode into the red by $43 million. Then last September cancer killed Chairman Robert Ellsworth Gross, 64. who had gambled $40,000 to take over the failing company in 1932. and subsequently gave it not only a place in the sun but also a Constellation. Left to mop up the problems was his shy and schoolmasterly brother. Courtlandt Sherrington Gross, 57. As Lockheed's longtime president. Court Gross had always stood in the long shadow of Brother Bob, and more than a few airmen wondered whether he was up to the bigger job.

Last week new Chairman Court Gross won his wings. He reported that Lockheed snapped back in 1961 to ring up record profits of $26 million on record sales of $1,440,000,000. Courage had a lot to do with the comeback. Lockheed bravely wrote off nearly $114 million in Electra and JetStar losses in a single year; that clobbered the company in 1960 but put it on solid financial footing thereafter.

More important, Lockheed made the decision to retreat from the up-and-down commercial-plane market, concentrate on defense production. That seemed like heresy in a day when most defense contractors are struggling to build more of their sales in civilian markets.

Money in the Payload. Much of the credit for the fact that Lockheed has become the nation's No. 3 defense contractor (behind General Dynamics and North American Aviation) belongs to the late Bob Gross. In 1946--long before Sputnik --he swung Lockheed into the missile-and-space work that now brings half of its sales. Three-quarters of the payload orbited by the U.S.--including the Discoverer, Midas. Samos--has been lifted by Lockheed's Agena space booster. Lockheed's Polaris missile is the Sunday punch of the nation's fastest-growing defense system, last year brought $372 million in sales for the company.

At the same time. Lockheed's manned birds were flying high. The Navy's lumbering antisubmarine P2r plane, the Hercules cargo transport and the F-104 all-weather jet interceptor brought 1961 sales of another $459 million. And Lockheed, the biggest beneficiary of the Pentagon's new emphasis on brush-fire mobility and military airlift, last March won a contract to build the big military transport plane of the future, the 158-ton. 550-m.p.h.

C-141. The award will be worth $1 billion during the 1960s.

Brains in the Computer. Court Gross generally follows the course charted by his brother, but he uses a compass of his own. Bob Gross was a creator; Court Gross is an administrator. Where his late brother loved fast sports cars, modern art and gay parties. Court Gross (Harvard '27) prefers to drive slowly in a Volkswagen, entertains only modestly, wears a homburg. Says he with a wry smile: 'T majored in English literature --fine preparation for the space age." At work. Court Gross is more of a team man than his brother was, gives subordinates more authority, but keeps a closer watch on nuts-and-bolts costs. Last fall he began coaxing Lockheed employees for suggestions, has got nearly 17,000 from them so far. says that the program will save the company $5,000,000 a year.

Reassurance in Research. With 73% of his sales in Government work. Gross might seem to be courting a dangerous dependency on the cold war. His rationale is that the defense business is a lot less risky than commercial-aircraft manufacturing. But to hedge his bets, Lockheed is building ships in Seattle, a three-mile monorail system near Tokyo, and the prototype of a vertical take-off plane that can speed up to 500 m.p.h. Gross plans to double his $47 million research budget by 1965, and is pressing ahead with work in nuclear-powered rocketry, electronics and oceanography research.

Always quicker with a blush than a boast, Gross still insists that all this is "nothing very glamorous and dramatic." But the hard fact is that while many of the more glamorous planemakers are still riding through turbulence, Lockheed's order backlog has grown from $1.2 billion to $1.6 billion in the past year, and modest Court Gross predicts that profits will climb almost 35% in 1962.

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