Beleaguered Giant

Having endured a nationwide public scolding since last January's Apollo disaster, North American Aviation Inc. last week did some private scolding within its own corporate offices. Chief victim was Harrison A. ("Stormy") Storms Jr., 51, who was replaced as head of the company's Apollo-building space division by Vice President William B. Bergen, 52, former president of the Martin Co. and a North American newcomer. After the front-office shakeup, North American President J. Leland Atwood, testifying before the Senate space committee, expressed confidence that "we can effectively accomplish the lunar mission in this decade."

That kind of assurance was what North American needed after last month's review-board report on the troubled Apollo program found "many deficiencies in design and engineering, manufacture and quality control." For Apollo's prime contractor, an aerospace giant relying on Government contracts for some 95% of its $2 billion-a-year sales, nothing could have been more damaging than such an indictment.

Shared Blame. Tapped in 1961 to build the spacecraft's command and service modules, North American was in trouble with the National Aeronautics and Space Administration almost from the start. Unhappy about costs and sloppy workmanship, the space agency eventually forced the Los Angeles-based company to lop off 3,000 workers, sent in extra quality-control inspectors, changed contracting procedures to combat what it considered North American's "time clock" approach to the job.

Though talk persists that part of North American's Apollo work may go to other companies, there is little chance that its $2.8 billion contract will be canceled. For one thing, the point of no return has long since been reached. More important, the company has demonstrated over the years--in such successes as its F-86 fighter--that it has the know-how to get the job done.

Indeed, much of the blame for Apollo's shortcomings must be shared by NASA itself. Says an executive of Northrop Corp., which builds Apollo's earth-landing and intercommunications systems: "NASA inspects, reinspects and inspects again. NASA lives with us. You can't separate NASA from the contractor." Declining to ascribe blame at all, another aerospace official points out that in projects "on the forefront of technology, there just isn't any perfection." As if to prove that point, a General Electric Co. study made public last week itemized more than 1,300 flaws in an Apollo spacecraft being readied for an unmanned test flight later this year; most of the bugs were the kind that crop up routinely in early stage development of any complex technical project.

More Shuffles. In his Capitol Hill appearance, Lee Atwood said that many of his company's troubles resulted from the "rapid buildup in manpower" required for the mammoth Apollo undertaking. By general agreement, the on-the-ground fire that killed three U.S. astronauts was caused by defective wiring; the astronauts were trapped inside because their escape hatch required at least 90 seconds to open. In the works, said Atwood, are improved wiring techniques and a space hatch that opens in less than five seconds.

Beyond that, North American plans more management shuffles in hopes of overcoming its problems. For the moment, Wall Street seems to be hedging its bets on the chances of success. After dropping from a 1967 high of 53 3/8 before the Apollo disaster to a low of 42 3/8 on May 1, North American's stock closed last week at 45 3/8.

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