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Lockheed's $70M comma
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June 18, 1999: 8:37 a.m. ET
Spelling error leaves defense giant in the red after military jet sale
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LONDON (CNNfn) - Bad punctuation left red-faced aerospace giant Lockheed Martin with a $70 million bill after a misplaced comma gifted a customer with overgenerous contract terms, according to a report published Friday.
The world's second-largest aerospace firm was hastened towards its second successive quarterly loss following the mistake in a sales contract for its giant C-130J military transport aircraft, according to the Financial Times.
Lockheed (LMT) aerospace president James Blackwell said the erroneous comma radically altered the inflation-adjustment formula in a contract to one of the giant aircraft's overseas customers.
When inflation rose less than expected, Lockheed was exposed to a $70 million loss when the customer insisted on the contract being honored in full, according to the report.
The C-130J, a revamped version of Lockheed's Hercules aircraft, had already been beset by a two-year delay in deliveries to its first overseas customer, Britain's Royal Air Force.
Blackwell did not identify the beneficiary of the wayward comma, but alongside Britain, only Australia and Italy have so far signed up for the new aircraft.
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Lockheed Martin
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