Help for Grumman?

Shah Mohammed Reza Pahlavi of Iran has such an appetite for American military hardware that some wags have wondered whether he might be willing to use some of his oil revenues to pay for the cost overruns that U.S. defense contractors often experience. Last week it appeared that he really might. The Shah's government offered a loan of undisclosed size to Grumman Corp. of Long Island to help it keep building the cost-plagued F-14A Tomcat fighter. Iran has ordered 80 of the planes, which cost $17.8 million each.

The offer came after the U.S. Senate voted down, 53 to 35, a proposal to have the Navy, which has ordered 374 Tomcats, lend Grumman $100 million. Grumman had claimed that it needed the money immediately to meet its payrolls. But Senators angrily noted that Grumman had reinvested an earlier Navy loan in high-yield, short-term securities and made a net profit of nearly $3 million. Some Senators also were annoyed that Grumman had paid dividends of 15-c- a share to stockholders in the last two quarters; Grumman last week postponed until next month action on another dividend, but conceded that it has the money to pay one.

The U.S. Government, of course, could well refuse to let Grumman take a loan from the Shah (whose government recently bought a fourth of the shares of West Germany's giant Krupp combine at a cost of about $100 million). Democratic Representative Otis Pike and Republican Senator Jacob Javits of New York are pressing the State Department to approve. But it scarcely seems in the U.S.'s interest to let an important defense contractor become financially dependent on a foreign government. The Pentagon is urging Grumman to seek financing from U.S. banks instead. There also is a serious political question of how much the U.S. wants to assist the Shah in expanding Iran's sphere of military influence. Though it can operate from land bases, the F-14 is designed to be flown primarily off aircraft carriers, and Iran does not now have any--but high Pentagon officials confirm privately that the Shah is in the market for two carriers. If he can buy them, they probably would be deployed not in the waters of the Persian Gulf but in the Indian Ocean, extending the Shah's power outside the Middle East.

A loud quarrel also appears to be developing over Pentagon purchases of an other important weapon, the Trident atomic-powered submarine. In July, the Navy ordered the first of the mammoth subs from General Dynamics' Electric Boat Division for $285.4 million, the highest price the Defense Department has ever paid for a single item. Last week Defense confirmed that it had acted over the objections of the Navy's director of procurement, Gordon W. Rule.

The contract is for a so-called "firm price." Such contracts often cause trouble in the case of new weapons whose cost is hard to estimate; manufacturers find that they cannot deliver for the agreed price and ask for more money. Rule contends that the Navy should have signed a "milestone" contract, under which the manufacturer is paid legitimate costs plus a set fee. Democratic Representative Les Aspin of Wisconsin, a former Defense Department economic analyst, agrees and is demanding a full congressional investigation.

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