Hughes Will Undertake Massive Torpedo Project

Hughes Aircraft Co. announced Thursday that it has received the first installment of what it expects will become a $500-million torpedo production project for the U.S. Navy.

The first phase of the multiyear project is a $24.4-million contract for advanced planning and equipment purchases for the submarine-launched Advanced Capability (ADCAP) torpedoes.

To accommodate the enormous project, Hughes said it would begin construction this summer on a 100,000-square-foot facility at its anti-submarine production facility in Buena Park. A company spokesman estimated full production of the deep-diving torpedo would demand the work of 600 employees.

However, he cautioned that most workers would come from Hughes’ existing 16,000 work force in Orange County, with fewer than 200 to be hired for the torpedo project.

Although the first phase is relatively small, the contract announced Thursday offers Hughes an important and potentially large project. It also represents the culmination of nearly six years of development work for which Hughes was already paid about $400 million by the Navy.

The torpedo, designed to attack both submarines and surface floating ships, is still shrouded in secrecy and few details were released. However, it is known that the torpedo, which is able to penetrate deeper waters than its predecessors, was developed specifically to attack the Soviet Union’s deep-diving Alpha submarine.

The initial contract covers the purchase of manufacturing and testing equipment and advanced planning costs. But the company said it expects the Navy to exercise options in the contract calling for building, testing and delivery of several torpedoes and training systems, as well as spare parts. Full value of those options would increase the contract to $175 million by the end of the year.

Furthermore, the company spokesman said, the Navy is expected to award Hughes another $300-million torpedo production contract by next March.

Hughes’ responsibilities in the project include the building of the torpedo’s electronic guidance system as well as assembling the final product with components supplied by other military contractors. The company said the Navy would add the explosives once the torpedoes are shipped to its bases.