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5. IT SHOULD BE REMEMBERED HOW SLIM THE COMPANY'S RESOURCES ARE.
THEY COULD NOT POSSIBLY ABSORB THE LOSS THAT THE IMPLICATIONS OF PARA. 2(A) COULD INVOLVE, HOWEVER UNLIKELY THIRD PARTIES MIGHT CLAIM THESE TO BE.
6.
INCIDENTALLY, THEY SAID THAT THE PURCHASE OF DC 10'S ALSO
INVOLVED THE PURCHASE OF A FLIGHT SIMULATOR WHICH WOULD BE OF BRITISH MANUFACTURE AND WORTH ABOUT POUNDS 2 MILLION.
7. I DO NOT WISH TO PUT MYSELF IN THE POSITION OF ADVOCATE FOR
CATHAY PACIFIC AS CLEARLY I CANNOT EVALUATE THE COMPLEX TECHNICAL
AND FINANCIAL DETAILS, BUT I DO STRONGLY URGE THAT MR. HESSELTINE SHOULD SEND FOR ADRIAN SWIRE SOON AFTER THE LATTER'S RETURN TO THE
U.K. ABOUT 14TH FEBRUARY SO THAT HE CAN HEAR THE LATTER'S
OWN REASONS FOR THE DECISION DIRECT. CONCEIVABLY THERE IS SOMETHING
THAT H.M.G. COULD OFFER THAT WOULD TIP THE SCALES THE OTHER WAY,
THOUGH FROM WHAT SWIRE SAID THIS SEEMS UNLIKELY SINCE THE DECISION
TURNS NOT ONLY ON THE PERFORMANCE AND RELATIVE STATE OF DEVELOPMENT
OF THE TWO AIRCRAFT, BUT ALSO ON A JUDGEMENT OF THE RELATIVE
STABILITY AND PROSPECTS OF THE COMMERCIAL DIVISIONS
OF DOUGLAS AND LOCKHEED AT THIS TIME.
B*
I REALISE THE EMBARRASSMENT THAT WILL BE CAUSED BY A FURTHER
SIGNIFICANT HONG KONG CONTRACT BEING WITHOUT U.K. CONTENT, BUT
! DO NOT SEE IN WHAT WAY WE CAN PUSH THE FIRM AGAINST ITS
COMMERCIAL JUDGEMENT OR OFFER IT ANY GUARANTEE AGAINST THE RISKS
WHICH IT FORESEES IN THE PURCHASE OF THE LOCKHEED. THOUGH HONG KONG'S DESIGNATED CARRIER, IT IS A PRIVATE COMPANY AND THERE
COULD BE NO QUESTION OF SUPPORT FROM PUBLIC FUNDS IF IT WERE IN
DIFFICULTIES.
9. THE FIRM THEMSELVES ARE VERY CONSCIOUS OF THE DISAPPOINTMENT
THEY ARE CAUSING AND ARE PARTICULARLY DISTRESSED SINCE IT IS OF
COURSE NOT THE BRITISH ENGINE BUT OTHER CONSIDERATIONS THAT
TIPPED THE SCALES. THEY WOULD GLADLY CONSULT YOU ABOUT WHETHER
THERE WAS ANYTHING THEY COULD SAY WHEN THE LETTER OF INTENT IS
SIGNED THAT WOULD BE HELPFUL, EITHER IN A PUBLIC STATEMENT OR PRIVATELY (E.G. TO THE CHINESE).
MACLEHOSE
ALLOT DISTRIBUTION
M & TD HKIOD
[ADVANCED TO DTI (CAD)]
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