RB211 Engine (Hansard, 20 July 1971)

§ Mr. Corfield

With due regard for the need to preserve an ordinary degree of commercial confidence, I have kept the House fully informed about the process of negotiations on the RB211 engine for the Lockheed TriStar. As the House is already aware, it is not my intention to give any information to Congress which has not been given to the House.

Some information which had, I understand, been tabled in confidence by the U.S. Administration and Lockheed has recently been published in the "Congressional Record". Of this material the item which directly concerns the United Kingdom is the text of Article 40 of the new contract negotiated between Rolls Royce (1971) Ltd. and Lockheed to give effect to the arrangements which I announced to the House on 10th May. The text of this Article is reproduced below.

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As I informed the House on 5th July, the Chairman of the Banking and Currency Committee of the U.S. House of Representatives was told that the United Kingdom Government is prepared to provide a further written statement. I am transmitting to the Chairman of the Banking Committee the answers to certain questions which the Committee recently asked, and the text of these answers is also reproduced below.—[Vol. 817, c. 32–3; Vol. 820, c. 247–8.]

Article 40 of Rolls-Royce/Lockheed contract on supply of RB211 engines

A. The obligations of ROLLS-ROYCE and LOCKHEED under the preceding provisions of this Basic Agreement shall take effect only if and when : (1) the United States Government gives notice to the United Kingdom Government that

(a) the United States Government, having obtained the authority of Congress, is prepared to give guarantees for the benefit of LOCKHEED in an amount of up to dollars 250 million, which amount, together with the funds available to LOCKHEED from private sources without Government guarantee, the United States Government considers sufficient to enable LOCKHEED to carry out the L-1011 project; and
(b) before seeking the authority of Congress referred to above, the United States Government satisfies itself, having regard to the orders for L-1011 aircraft placed with LOCKHEED and the orders for L-1011 aircraft that might reasonably be expected to be placed with LOCKHEED, that LOCKHEED will be able to carry out the L-1011 project.

(2) Mutual signature and delivery takes place of amendments to the respective existing Airplane Sales Contracts for Model

ANSWERS TO QUESTIONS FROM BANKING AND CURRENCY COMMITTEE OF UNITED STATES HOUSE OF REPRESENTATIVES
Question	Answer
(1) What was the original contract price of the RB.211?	$2,446,340 per ship set of three engines.
(2) What was the date of that contract?	28th March, 1968.
(3) What is the history of price changes from that date to the present?	The original price was subject to escalation. Customer demanded modifications have added $101,476 per ship set to the original price.
(4) What is the price that has finally been agreed to for the production engines if the RB.211 and L.1011 programmes continue?	$2,995,116 per ship set of three engines.
(5) There have been press and other reports in this country indicating that the RB.211 scheduled to be used in flight certification (estimated by Lockheed to take place on April, 1972) is below initial specifications. At sea level and 84°F what is the rated take-off thrust of that engine?	The original thrust was 40,600 lb. (84°Fday). In June, 1970, Lockheed requested an increase in thrust. This was achieved by reducing the hot day performance of early engines to 38,750 lb. (84°Fday) and offering the full 42,000 lb. (84°Fday) about one year after initial introduction into service. Thus April, 1972, engines will give 42,000 lb. (standard day) and 38,750 lb. (84°Fday).

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L-1011 airplanes between LOCKHEED and Eastern, T.W.A., Delta, Air Canada, Air Jamaica P.S.A. and Haas/Turner which affirm their intention to continue their participation in the L-1011 program. (3) Assignments to ROLLS-ROYCE of the existing spare engine contracts with Eastern, TWA, Delta, Air Canada and Air Jamaica, including the granting of general releases in respect thereof in favour of Rolls-Royce Limited and the Receiver of Rolls-Royce Limited, are mutually signed and delivered and amendments to those contracts reflecting changes in specification, delivery, price and parts costs guarantees are also mutually signed and delivered. (4) A contract between ROLLS-ROYCE and the United Kingdom Government covering the total funding of the RB.211 development and production programme is mutually signed and delivered or ROLLS-ROYCE receives from the United Kingdom Government assurances satisfactory to ROLLS-ROYCE relating to such total funding. (5) LOCKHEED is notified in writing by the United Kingdom Government that the United Kingdom Government has satisfied itself that the contract or the assurances referred to in sub-paragraph (4) of this Paragraph A will provide total funding which might be reasonably expected to enable ROLLS-ROYCE to carry out the RB.211 development and production programme. B. If the conditions specified in Paragraph A above shall not all have been satisfied before 8th August 1971 the obligations of ROLLS-ROYCE and LOCKHEED under this Basic Agreement shall not take effect at all and the Basic Agreement shall on that date cease to be binding in any respect. C. Lockheed shall promptly notify ROLLS ROYCE in writing if and when the conditions described in sub-paragraphs (2) and (5) of Paragraph A above have been satisfied; and ROLLS-ROYCE shall promptly notify LOCKHEED in writing if and when the conditions described in sub-paragraphs (3) and (4) of Paragraph A above have been satisfied.

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Question	Answer
(6) Is this below the engine performance as specified in the original contract or guarantee for the aircraft originally scheduled to be flown in November, 1971, or thereabouts?	Yes, for reasons stated.
(7) Is it correct that Rolls-Royce has now undertaken to produce an engine with 42,000 lb. of thrust at sea level and 84°F?	Yes.
(8) Is it also true that the target date for that engine if April, 1973?	Yes.
(9) What are the reasons for going from the original specification of 40,600 lb. for the November, 1971 aeroplane to the 42,000 lb. scheduled for April, 1973 (assuming the information as reported is substantially correct)?	Due to the customer's request as indicated.
(10) If there are essential errors in these date as they have been reported, would you indicate what the correct data are and provide us the correct information as to the original and subsequent commitments, accomplishments and expectations as to the thrust of the RB.211?	See above.
(11) What is the original weight of the RB.211 as guaranteed in or about April, 1968?	The original weight, agreed between April, 1968 and early 1969, was 34,333 lb. per ship. set.
(12) What will be the weight of the engine delivered for the April, 1972 aeroplanes?	38,500 lb.
(13) What will be the weight of the 42,000 lb. thrust engine targeted for April, 1973 delivery (again assuming the reports are approximately correct)?	38,500 lb.
(14) Has Rolls-Royce or Her Majesty's Government made any commitment, or does it intend to make any commitment to indemnify Lockheed or Lockheed's customers for any delay beyond the new scheduled delay dates which we understand have been tentatively agreed to between Lockheed and Rolls-Royce?	The new conditional contract provides at article 10 that in the event of inexcusable delay in delivery, Lockheed will be reimbursed against damages suffered up to the limits specified in the contract. Provisions for liquidated damages are also included in all direct contracts with the airlines in relation to spare engines.