Cost Savings on Maverick Wins Achievement Award : Pentagon Praises Hughes Missile It Criticized
When Hughes Aircraft executives were called to Washington during 1984, it was often to explain to angry government officials and members of Congress why the Hughes Maverick missile contained serious quality defects.
But recently, Hughes President Don White was warmly welcomed at the Pentagon to receive an achievement award from Deputy Under Secretary of Defense Mary Ann Gilleece for product improvements on the same Maverick missile.
The unusual twist of fate for Hughes is just the latest development in a 12-month saga that has seen the Pentagon stop all deliveries of Maverick missiles and halt millions of dollars in progress payments to the program. Yet, the award cited Hughes for improvements in the Air Force’s air-to-ground missile that will save an estimated $173 million over the life of the program.
“I can see there is irony in this, but it is about time the government recognized that we do something right,” said Dean Voegtlen, Hughes director of product-cost effectiveness. “This really shows we are not schlock contractors. Couldn’t we get some recognition for that?”
Defense Department officials Friday were unable to explain why they spent so much time last year publicly lambasting Hughes for poor product quality if the company deserved to be honored for public service on the very same program.
“I don’t recall what the problems were, I don’t know what the solution was, and I can’t say what that has to do with this award,” said Gordon Frank, the Defense Department official who headed the committee that selected Hughes for the national award.
Frank said that his committee selected winners of the award from a list of contractors that were submitted by each of the military services. “I didn’t nominate Hughes. The Air Force nominated Hughes,” Frank added.
An Air Force spokesman, however, replied, “It was a Department of Defense award. The people who handled that award are in the Pentagon. I am in no position to discuss this award.”
Even as Hughes officials were receiving the award late last month, the Air Force had still not restored 100% of contract payments on the Maverick missile program. The company apparently is still encountering difficulties in correcting all of the alleged quality-control problems at its Tucson missile factory.
The achievement award that Hughes received was for so-called value engineering--that is, a product improvement that reduces manufacturing costs.
Hughes’ engineers were able to eliminate 223 electronic components from the Maverick by substituting large-scale integrated circuits for older-generation electronic components in modules.
The change will save about $2,847 on each Maverick missile, of which 80% will go to the Pentagon for the first three years and 100% after three years.
Hughes also received the Navy’s value engineering award for 1984 for saving $101.5 million on a data-display system for surface ships, produced at the firm’s ground systems group in Fullerton.
During the past 20 years, Hughes has been the leading defense contractor in saving money for the Pentagon through product improvements. Since 1964, Hughes has suggested, and the Pentagon has accepted, product changes that saved $886 million, representing 3% of all Hughes defense sales. Of that amount, the Defense Department kept $719 million, and the balance was awarded to Hughes.
