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Ash told senior Navy officials in mid-1972 that his company's cash flow was "already tenuous." A few weeks earlier, Litton had begun using company money to establish a $2 million dollar pool from which 25 top executives were authorized to borrow a sum "not to exceed their annual salary rate." Interest on the borrowed money was set at 4%, "at least 2 per cent below the rate company itself paid to borrow funds," according to the Securities and Exchange Commission. Then there additional pricing changes. Litton's new amphibious assault ships were to cost $133 million apiece under a 1968 contract. By early 1973, the cost had risen to an estimated $237 million each. The General Accounting Office long ago reported the first amphibious craft, the TARAWA, to be 23 months behind schedule. The last of the five vessels was said to be more than 32 months behind. Representative Les Aspin, D-Wis., a member of the House Armed Services Committee, has charged Litton with "continuing to botch-up the management of its so called shipyard of the future Pascagoula." Aspin referred in particular to Litton's performance with this SPRUANCE-class ships. On hearing that Litton hopes to deliver the SPRUANCE next month, one of the waiting crewmen exclaimed, "that's what they say." |