In London on Tuesday (11 May), Lockheed chairman Dan Haughton signed a new contract with Rolls Royce for the supply of RB-211 engines for their Tristar airliner.
In London on Tuesday (11 May), Lockheed chairman Dan Haughton signed a new contract with Rolls Royce for the supply of RB-211 engines for their Tristar airliner. The signing of the contract by Mr. Haughton and Rolls Royce chairman, Lord Cole, ends three months of transatlantic negotiations. The contract is conditional upon the United States government agreeing to guarantee the 250 million dollars in bank loans that Lockheed needs.
Negotiations to ensure financial backing for the RB-211 have gone on since the financial collapse of Rolls Royce in February. Representatives of four airlines have also been meeting with Rolls Royce to discuss how long Rolls Royce could guarantee to maintain engine production. The airlines want to be sure the company will not be hit by any more collapses, before they go ahead with the purchase of Tristar. Without airline willingness to buy, it would be even more difficult to obtain U.S. government backing for the bank loans Lockheed needs. In turn, without U.S. government backing, the British government has said it could not spend the additional money it has agreed to contribute towards Rolls Royce development of the RB-211 engine.