DALLAS -- Even if Thomson-CSF can restructure its bid to buy LTV Corp.'s missile business, the French defense manufacturer
likely can't win political approval for the controversial acquisition, according to several defense analysts, congressional aides and members of Congress.
Since withdrawing its proposal Monday to buy the LTV Missiles Division for $300 million, Thomson-CSF officials have feverishly worked to refashion the deal with a U.S. partner. Thomson is talking with Northrop Corp., Loral Corp. and Raytheon Co., sources said.
Northrop officials visited the LTV Missiles Division headquarters in Grand Prairie, Texas, on Thursday. Tony Cantafio, Northrop's vice president for public information, described the visit as "part of the exploration process." A Thomson official said discussions were continuing with potential partners.
Some Capitol Hill aides said the French company -- 60 percent owned by the French government -- might as well not bother.
"If I were Thomson, I'd bag it -- unless they're masochists," said an aide to a Democratic senator who has expressed reservations about the deal. "I don't see how they think they will wind up owning LTV. It's pretty clear that the political opposition is strong."
The debate has focused on what the United States stands to lose by approving the deal. But some analysts warn that Congress should consider the costs of not doing the deal.
There is almost unanimous agreement on one point: The ultimate success or failure of a restructured Thomson proposal will depend on the proposal's fine print.
"This is another hot potato for [President] Bush, but there will be costs for not doing it -- mistrust among foreign companies and potential foreign investors, and bad will with foreign governments," said Gordon Adams, director of the Defense Budget Project, a Washington study group. "We could set up a train of bad will that we will pay for."
A senior European Community official recently wrote Secretary of State James Baker to express concern about "arguments irrelevant" to national security considerations that have dominated the LTV debate.
Mr. Adams offered a slightly less pessimistic assessment of Thomson's chances of winning approval for a restructured deal.
"The deal has to be restructured to survive at all," Mr. Adams said. "But my reading is that if Thomson comes in at 10 percent ownership or even a little above it, the deal may survive yet."