Shuttle Shutdown's Affect on Thiokol Unknown

Shuttle Shutdown's Affect on Thiokol Unknown

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Shares of three companies involved in the construction and maintenance of the nation's space shuttle fleet fell Monday on the New York Stock Exchange.

Alliant Techsystems Inc. shares sank nearly 12 percent on concerns the halt of shuttle flights in the wake of the Columbia disaster will heavily affect the aerospace and defense company. Shares of Boeing Co. and Lockheed Martin Corp. also lost ground.

Alliant division Thiokol provides the two rockets astride the huge fuel tank that shoots the shuttles into space. Thiokol's previous incarnation was Morton Thiokol, which was blamed for the O-ring seals that failed and led to the Challenger explosion in 1986.

"As of today, we have not been directed to change any of the activity on the program," said Alliant spokesman Rod Bitz. "We have had an initial discussion with NASA on the Columbia mishap. We are supporting their investigative effort."

Alliant's contract with NASA runs through May 2007 and calls for 74 motors, Bitz said. The shuttle business provides about $380 million of the Minneapolis-based company's $2.1 billion in revenues.

Just how the shuttle program shutdown will affect Alliant's Thiokol Propulsion operations in Utah, which include a rocket testing site at Promontory and aerospace and solid-fuel development at the former Hercules site near Magna, remained uncertain.

"It is just too early to assess possible business activity related to this," spokesman Dave Nicponski told The Salt Lake Tribune. "Right now we are busy responding to and supporting NASA" in investigating the destruction of Columbia during re-entry Saturday.

In trading on the NYSE, Alliant shares fell $6.34, or 11.6 percent, to close Monday at $48.02. The shares dropped another 52 cents in extended trading.

Boeing and Lockheed Martin have major stakes in the future of the U.S. manned space program. Each company has a 50 percent stake in United Space Alliance, the prime contractor to NASA on the shuttle program.

Formed in 1995, United Space Alliance trains astronauts and controllers, service the shuttle's engines and communications and does repairs and rebuilds its parts as needed.

Chicago-based Boeing generates about 4 percent of its $54 billion in annual revenue from work on NASA operations, including the shuttle and the International Space Station.

Boeing shares fell 48 cents, or 1.5 percent, to close at $31.11 on the NYSE. They lost 2 cents in extended trading.

Lockheed of Bethesda, Md. provides the external fuel tank and manages the data collected by NASA from its space mission. It gets about $700 million a year of its $26.2 billion from its shuttle business.

Investigators are looking at the possibility that Columbia's thermal tiles may have been damaged during launch by a loose piece of foam insulation from the shuttle's external fuel tank.

Lockheed shares fell $1.50, or 2.9 percent, to close at $49.55 on the NYSE. The shares rose 20 cents in the after-hours session.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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