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Liquid-booster plans aren't hurting Thiokol much

If a new "liquid flyback booster" technology for the space shuttle program is a serious threat to Thiokol Corp.'s solid rocket booster, it wasn't evident Thursday at the aerospace contractor's annual meeting in Salt Lake City.

Thiokol chairman and CEO James R. Wilson acknowledged in his remarks that the company was having to "fend off liquid flyback schemes" but assured those gathered for the meeting in the Marriott Hotel that he expects Thiokol's solid boosters to be launching the shuttle into space "for the next 10 to 15 years."The shuttle program's life span is not expected to run any more than another 15 years unless a decision is made to keep it going longer than planned.

On Oct. 1, Rep. Merrill Cook, R-Utah, attacked NASA's plans to research a new kind of booster that uses liquid propellant and could be flown back to earth by remote control, rather than jettisoned for a pickup at sea as are the solid boosters.

Cook said he had been told by Thiokol officials that a switch to the liquid flyback boosters "threatens the future of the company." About 85 percent of Thiokol's Utah employees - 2,900 out of 3,400 - work on the solid boosters, a payroll of some $160 million per year.

Following his prepared remarks at the annual meeting, Wilson was asked if he was dismissing the new technology as no threat to the company's solid booster work.

"I don't view it as a significant threat, but we take it seriously," said Wilson. "It's (the solid rocket booster) a large program for us."

Whatever the future holds for Thiokol's solid booster program, Wilson had too much good news to worry much about it now.

As annual meetings go for major corporations, this one had a surprisingly low turnout - the Thiokol board of directors seated on the front row outnumbered the shareholders.

Blame the good news. A packed house usually means the shareholders are not happy and want to let the head guy know it. But what's a Thiokol shareholder going to complain about? Consider:

- Net income in fiscal 1997 was up 40 percent to a record $82.4 million on sales of $890.1 million.

- Earnings per share were also up 40 percent to $4.41.

- Thiokol's stock price increased a whopping 77 percent during the fiscal year.

- The company increased its annual dividend from 68 cents to 80 cents per share and began buying back its shares.

There's not much there for a shareholder to gripe about except possibly how to find the money to buy more shares.

Thiokol's management has been working hard in recent years to diversify the company away from its former dependency on government contracts for its existence. And for the first time in its history, the propulsion division now represents a minority of the business - 45 percent.

The company's 49 percent ownership of Howmet Corp. (soon to become as much as 64 percent and in two years 100 percent, said Wilson) accounted for 38 percent of profits and its Huck International subsidiary kicked in 17 percent. Howmet makes proprietary fastening systems for aerospace and industrial markets and Huck builds high-tech castings for aircraft and industrial turbine engines.

Wilson concluded that Thiokol's management's strategy for the company is to continue growing shareholder value, optimize performance in its solid booster program, develop spinoff technologies, increase ownership of Howmet and consider other acquisitions.

He said the company is on track to move its corporate headquarters from Ogden to Salt Lake City next June 1. Thiokol will lease space in the new Gateway Tower West under construction on the southwest corner of Main and South Temple.