Industry Defense contracting Area served USA Parent organization Newell Brands | Defunct 1996 (1996) Ceased operations 1996 | |
Native name Loral Electronics Corporation Founded 1948 (1948) in New York, New York Founders William Lorenz and Leon Alpert Headquarters New York City, New York, United States | ||
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.
Contents
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. 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.
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.