Background: In the 1960s, Lockheed was trying to expand its operations from defense aircraft to commercial aircraft. The result was the L-1011, which proved to be a financial albatross. Lockheed had a double-whammy: the slowing economy and the failure of its principle partner, Rolls Royce. The airplane engine manufacturer went into receivership with the British government in January 1971.
The argument for bailout rested on jobs (60,000 in California) and competition in defense aircraft (Lockheed, Boeing and McDonald-Douglas).
In August 1971, Congress passed the Emergency Loan Guarantee Act, clearing the way for $250 million [approximately $1.33B in 2008 dollars] in loan guarantees (think of it as co-signing a note). Lockheed paid the U.S. Treasury $5.4 million in fees in fiscal 1972 and 1973. Total fees paid: $112 million.
Learn more about the Lockheed bailout