Hughes faces a suspension of contract payments.
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The Air Force is discussing with Hughes Aircraft officials a possible suspension of $9 million in payments for failure to deliver the first lot of 28 Phoenix missiles on schedule. The firm confirmed that the Air Force has asked it to respond by Friday. A Hughes spokeswoman said the firm has fallen behind schedule in its production recovery plan instituted two years ago, when the Pentagon suspended deliveries of all Hughes missiles because of manufacturing defects.
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