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LEADING DEFENSE INDUSTRY CEOS SAY FOREIGN GOVERNMENTS' OWNERSHIP OF AMERICA'S PRIME DEFENSE CONTRACTORS THREATENS NATIONAL SECURITY

LEADING DEFENSE INDUSTRY CEOS SAY FOREIGN GOVERNMENTS' OWNERSHIP OF AMERICA'S PRIME DEFENSE CONTRACTORS THREATENS NATIONAL SECURITY
 WASHINGTON, May 14 /PRNewswire/ -- The proposed purchase of LTV Corporation's (NYSE: QLTV) missile business by Thomson-CSF, a French government-controlled firm would threaten national security and lead to foreign nationalization of critical U.S. defense assets, according to the chairmen and chief executive officers of the Lockheed (NYSE: LK) and Martin Marietta (NYSE: ML) Corporations, Daniel M. Tellep and Norman R. Augustine, respectively.
 "The proposed French foreign government control of LTV, a U.S. defense contractor responsible for numerous highly sensitive U.S. defense programs, is without precedent," the CEOs told both the House Armed Services Committee and the Senate Committee on Commerce, Science, and Transportation today. The two chairmen said the public policy issue at stake "is whether critical American defense companies and technology may be sold off to foreign governments."
 Addressing the long-term implications, they pointed out that "This transaction threatens our national security by placing critical defense assets under the control of a foreign government, by threatening technology transfers and the future viability of critical U.S. defense contractors and subcontractors, and by reducing LTV's capacity to participate in highly-classified defense programs."
 Augustine and Tellep told the two panels that "approval of this transaction would send a signal to foreign governments all over the world that our defense industry, internationally recognized for its state-of-the-art technology, is for sale. Who is the next government buyer after the French? Which other foreign governments may use their deep pockets to raid our critical defense resources as the industry goes through a painful restructuring," they asked.
 The two dismissed suggestions that it is possible to devise effective schemes to protect classified information. "Because LTV's technologically advanced work and the personnel involved, are currently diffused throughout the missile division, and because of the highly sensitive nature of the programs involved and the proposed French government involvement, standard arrangements for mitigating foreign ownership, control, or influence would be inadequate," they said. "Even a formal voting trust cannot protect the vital, classified technology and know-how at stake in this case."
 Augustine and Tellep told the congressional panels that the Thomson bid is subsidized by the French government and that there is ample evidence that Thomson-CSF is "a company controlled by a foreign government that subsidizes its domestic industry and makes centralized research, development and planning decisions."
 "If foreign governments with deep pockets are permitted to back purchases of defense contractors," Augustine and Tellep said, "U.S. bidders are going to be outbid again and again. ... Subsidiaries would give a foreign government-owned competitor an unfair advantage in the U.S. market and would ultimately weaken U.S. defense companies and threaten our long-term ability to maintain military superiority."
 In February, Martin Marietta and Lockheed announced that a new jointly-owned company, the Vought Corporation, had signed a definitive agreement to acquire substantially all of LTV's aircraft and missiles businesses for $355 million. But in April, a U.S. Bankruptcy Court judge awarded LTV's missile business to Thomson-CSF, a French firm 60 percent owned by the French government. The ruling also approved the sale of LTV's aircraft business to the Carlyle Group, a Washington investment banking firm.
 "We oppose foreign government nationalization of the U.S. defense industry," Augustine and Tellep concluded. "It has long been our nation's policy to reject the nationalization of the U.S. defense industry through U.S. government ownership. This is a policy that has served us well, and we can think of no rationale whatever for permitting foreign governments to acquire these same crucial U.S. defense assets."
 -0- 5/14/92
 /CONTACT: Chip Manor of Martin Marietta, 301-897-6258, or Hugh Burns of Lockheed, 703-413-5603/
 (ML LK QLTV) CO: Martin Marietta Corporation; Lockheed Corporation;
 Thomson-CSF; LTV Corporation ST: District of Columbia IN: ARO SU:


IH -- DC016 -- 0279 05/14/92 13:23 EDT
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Date:May 14, 1992
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