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Loral Corporation

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Loral Corporation
Native name
Loral Electronics Corporation[1]
IndustryDefense contracting
Founded1948 (1948) in New York, New York
FoundersWilliam Lorenz and Leon Alpert
Defunct1996 (1996)
Area served
USA
ProductsRadar, sonar and infrared detection equipment; satellite communications;

Loral Corporation was a defense contractor founded in 1948 in New York by William Lorenz and Leon Alpert as Loral Electronics Corporation. The company's name was taken from the first letters of each founder's surname.[2]

History

Loral Corporation originally worked on developing radar and sonar detection methods for the U.S. Navy. In 1959 it went public with an initial offering of 250,000 shares at $12 each.[3] Part of the proceeds from this offering were used to build a new headquarters on its 10-acre (40,000 m2) site at 825 Bronx River Avenue, in the Soundview section of The Bronx, New York.[4]

In 1959 it began to diversify, buying several smaller companies, through which it won more military contracts. Some purchased companies included Willor Manufacturing Corp., American Beryllium Co., Inc., of Sarasota, Florida, Arco Electronics, and several plastics companies.

In 1961, it formed a division for developing communications, telemetry, and space navigation systems for satellites.

As its expansion and buying other companies increased, it borrowed $15 million from the Massachusetts Mutual Life Insurance Company in 1965.

In the late 1960s, it was awarded many military contracts, including a $3.9 million U.S. Navy contract for Doppler navigation radar in 1965, a $14 million contract from General Dynamics for advanced electronics for the U.S. Air Force F-111 airplane in 1969, and a $3.9 million contract for airborne countermeasures for the Phantom RF-4C reconnaissance plane. By the late 1960s, Loral specialized in radar receivers, which identified signatures of enemy radar systems on missiles and anti-aircraft guns.

However, by the late 1960s, Loral's corporate purchases were causing problems for the company. By 1971 it had lost $3 million and was sometimes unable to meet its loan payments. Many acquisitions were not profitable and also not in Loral's primary business. The founders, Lorenz and Alpert, were prepared to sell half their interest in the company.

Loral was on the verge of bankruptcy in 1972 before it was acquired by Bernard L. Schwartz, who over the course of the next two decades built it into a major player in the global aerospace and defense industry, acquiring 16 other defense and aerospace companies. In 1995, Loral had $5.5 billion in revenue. In 1996 Loral sold its defense electronics and system integration businesses to Lockheed Martin; its remaining units became Loral Space & Communications. The following year, several of those former Loral units were spun off by Lockheed Martin to become the core of L-3 Communications.

Loral was accused of transferring technology to China in 1996. The incident arose as a result of an investigation into the launch failure of Intelsat 708, a Space Systems/Loral–built satellite. In a 2002 agreement with the State Department and Department of Justice the company agreed to pay $20 million in fines to settle the matter and to improve its compliance procedures. In the agreement Loral officials neither admitted nor denied the government's charges, but Loral executives acknowledged "the nature and seriousness of the offenses alleged by the department in the draft charging letter, including the risk of harm to the security and foreign policy interests of the United States", and stated that they wished to make amends through the payment of restitution. Schwartz subsequently released a statement accepting "full responsibility for the matter" and portrayed the incident as an error by a single Loral employee.[5]

Timeline

  • 1948. Loral Electronics Corporation founded
  • 1959. Loral makes a public stock offering and becomes a public corporation
  • 1972. Loral is on the verge of bankruptcy, Bernard L. Schwartz acquires it.
  • 1987. Goodyear Tire and Rubber Company sold Goodyear Aerospace Corporation (GAC) to Loral, which became Loral Defense Systems.[6]
  • October 1990. Loral acquires Ford Aerospace, the divisions of which become Space Systems/Loral and Loral Western Development Labs.
  • 1991. With Qualcomm, Loral begins the Globalstar project, and at the peak owns a 42% share in the company.
  • 1994. Loral acquires IBM's Federal Systems Division, which becomes Loral Federal Systems.
  • May 5, 1995. Loral acquires Paramax, the defense unit of Unisys, for $862 million in cash.
  • January 8, 1996. Lockheed Martin agreed to purchase the defense electronics and system integration businesses of Loral for $9.1 billion.[7] Loral becomes Loral Space and Communications.[8]
  • October 5, 2007 Loral Space & Communications Inc. and the Public Pension Investment Board of Canada received the final regulatory approval necessary to complete the acquisition of Telesat from BCE Inc. for CAD $3.25 billion. The acquisition closed on October 31, 2007, with Loral owning 64 percent of Telesat.

Other acquisitions

Other past units

References

  1. ^ "Loral Space & Communications Ltd". Stocklobster. Retrieved 20 May 2015.
  2. ^ "Loral Corporation". Encyclopedia.com. Retrieved 20 May 2015.
  3. ^ Securities and Exchange Commission News Digest, April 2, 1959. Cf. p.3 on Loral's IPO.
  4. ^ "Powell Focuses the Spotlight on a Guarded Military Plant", New York Times, Tuesday, April 16, 1991.
  5. ^ "Satellite Maker Fined $20 Million in China Trade Secrets Case", New York Times, Thursday, January 10, 2002.
  6. ^ "MARX v. LORAL CORPORATION". case.aw.findlaw.com. 24 June 1996. Retrieved 20 May 2015. Goodyear sold GAC to Loral Corporation ("Loral") in March 1987, after which Loral became the Plan administrator and fiduciary.
  7. ^ Peltz, Jeff F. (9 January 1996). "Lockheed Will Buy Loral Corp. for $9 Billion". Los Angeles Times. Retrieved 20 May 2015. Lockheed Martin Corp., seeking to dramatically alter the landscape of the defense industry for the second time in less than a year, said Monday that it has agreed to buy the defense electronics business of Loral Corp. in a deal valued at more than $9 billion.
  8. ^ Sterngold, James (8 January 1996). "Lockheed to Acquire Loral In a Deal Worth $10 Billion". New York Times. Retrieved 20 May 2015. In addition, the deal will result in the creation of a new company, to be called the Loral Space and Communications Corporation.
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