A Northrop executive Thursday termed as "unadulterated nonsense" allegations made by three of his own engineers last week that the MX missile guidance system is so poorly built that the missile would be just as likely to hit Washington as Moscow.
David N. Ferguson, a Northrop group vice president, told the House Armed Services Committee during a special hearing that the Northrop guidance system is exceeding the reliability and performance requirements set by the Air Force.
But Ferguson said he could not explain allegations made in testimony last week that the company had thrown thousands of MX parts into a garbage dumpster to avoid Air Force scrutiny of the firm's poor management practices.
In a separate development Thursday, a grand jury in Los Angeles took possession of 80 boxes of those MX missile parts, allegedly found in the garbage dumpster at the Northrop Electronics Division plant in Hawthorne by a company manager, David Peterson.
The grand jury subpoenaed the parts from Peterson, according to his attorneys, Herbert Hafif and Robert Kilborne, who last week filed a civil suit against Northrop on the basis of Peterson's allegations.
Federal agents have referred three investigations of alleged civil and criminal misconduct by Northrop to the U.S. attorney for possible prosecution. The new involvement of a grand jury appears to deepen Northrop's legal problem.
When asked how the parts ended up in the dumpster, Ferguson told the House committee, "I don't how things got into the dumpster. I don't even know if things did get into the dumpster. I don't know.
"Allegations are allegations; I don't know," Ferguson said, adding that he has not been able to see the parts in question. He said he had gone personally to the factory floor to look for such a dumpster and was unable to find it.
The hearings Thursday were called by committee Chairman Rep. Les Aspin (D-Wis.) to look into a broad range of problems and allegations surrounding the Northrop Electronic Division's work on the MX. The committee has held three hearings and plans to hold at least one more.
Under tough questioning by Rep. John G. Rowland (R-Conn.), Ferguson acknowledged that Northrop had falsified some guidance system test results, had set up fictitious businesses with petty cash to buy parts, had billed the government for false time cards and had attempted to charge the Air Force for fixing deficient parts that were delivered by a subcontractor.
Northrop has been cited in government audits for having excess inventory at the Hawthorne plant, allegedly because it was ordering unauthorized duplicate parts through the fictitious businesses. Peterson has said that at least some of the parts were discarded in the dumpster in an effort to hide the problem from the Air Force.
Ferguson told the committee Thursday that the fictitious businesses were set up because the company's regular purchasing department could not respond quickly enough to the MX program's needs. But he gave no ground on the issue of the MX guidance system's reliability and integrity. He said it is exceeding by 34% the Air Force's reliability standards.
"Readiness is being proven--tested and retested--every day of the year, 24 hours a day. Readiness is what the Peacekeeper (MX) is all about," he said.
He said former Northrop engineer Brian Hyatt, who has charged that the MX contains a number of technical flaws and deficiencies, was fired for incompetence, even though Hyatt had received favorable job evaluations and pay raises before he spoke up.
Kilborne and Hafif, who also represent Hyatt, have said that they will show in court that the missile guidance system is less reliable and more prone to breakdown than Northrop and Air Force officials are saying.
Air Force officials testified last week that one-third of the MX missiles in silos at F.E. Warren Air Force Base in Wyoming do not have guidance sets in them because of problems Northrop has had in producing them. The Air Force has withheld $72.6 million because of late deliveries.
Ferguson said Northrop's delivery rate is improving and that this month the company expects to ship six of the guidance sets, called inertial measurement units (IMUs). He said the company would be back on schedule by early 1988.
"There have been difficulties in material control and management, property accounting, inventory control, subcontract management and acquisition oversight," Ferguson acknowledged. He said the company was addressing its problems by putting many new managers in key positions.
Another effort, he said, is to teach employees how to properly fill out time cards. The effort includes the use of videos, posters and an 18-page pamphlet.