C'Est Non!

The decision hardly came as a surprise to executives of the French defense contractor Thomson-CSF. For months the U.S. defense community had been debating the wisdom of allowing the company, 60% owned by the French government, to buy Dallas-based LTV Corp.'s missile business. The issue was resolved by the Treasury Department's interagency Committee on Foreign Investment in the United States, which responded on the eve of the Fourth of July with a resounding "Non!" The panel voted to recommend to President Bush this week a rejection of Thomson-CSF's $300 million offer, based on widespread concern that the sale would compromise LTV's considerable top-secret high technology and threaten national security interests. The action was taken on the same day that votes in both the House Appropriations Committee and the Senate expressed disapproval of the sale. Anticipating rejection, Thomson-CSF officials have been scrambling for some time to put together a new offer -- with American partners, including Raytheon, Northrop or Loral. One hitch is that Thomson-CSF placed a $20 million guarantee with LTV for a completed sale by July 31. A new arrangement would depend on the readiness of LTV's creditors to let this deadline slide while a new U.S. review process took place.