Rohr Inc – ‘10-K’ for 7/31/96

As of:  Tuesday, 9/24/96   ·   For:  7/31/96   ·   Accession #:  1017062-96-230   ·   File #:  1-06101

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        10-K Dated 07-31-96                                   30    156K 
 2: EX-10.2.31  Thirty-First Amen. to Supp. Retirement Plan           16     50K 
 3: EX-10.2.32  Thirty-Second Amen. to Supp. Retirement Plan           1      7K 
 4: EX-10.4.1   Sixteenth Amen. to Mgmt Incentive Plan / 6-7-96        6     23K 
 5: EX-10.4.2   Seventeenth Amen. to Mgmt Incentive Plan / 09-13-9     2±     7K 
 6: EX-10.7.1   First Amen. to Employment Agreement - Robert Rau       2     11K 
 7: EX-11.1     Calculation of Primary Earnings Per Share              2±     9K 
 8: EX-11.2     Calculation of Fully Diluted Earnings Per Share        2±    11K 
 9: EX-13       Annual Report to Shareholders                         44    196K 
10: EX-23       Consent - Deloitte & Touche                            1      7K 
11: EX-27       Article 5 Financial Data Schedule                      2      9K 

10-K   —   10-K Dated 07-31-96
Document Table of Contents

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1996  
=============================================================================== 
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  

FORM 10-K 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934

[FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JULY 31, 1996            COMMISSION FILE NUMBER 1-6101

ROHR, INC.  
(Exact name of registrant as specified in its charter)  

DELAWARE                                      95-1607455    
(State or other jurisdiction of                     (I.R.S. Employer          
incorporation or organization)                   Identification Number)       

850 LAGOON DRIVE, CHULA VISTA, CALIFORNIA 91910 
(Address of principal executive offices)

(619) 691-4111  
(Telephone No.) 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: 

   TITLE OF EACH CLASS                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
   -------------------                 -----------------------------------------
COMMON STOCK, $1 PAR VALUE                       NEW YORK STOCK EXCHANGE        
                                        PACIFIC STOCK EXCHANGE
                                            THE STOCK EXCHANGE, LONDON

7% CONVERTIBLE SUBORDINATED                      NEW YORK STOCK EXCHANGE        
DEBENTURES DUE 2012                              PACIFIC STOCK EXCHANGE         
                                            THE STOCK EXCHANGE, LONDON

7-3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004   NEW YORK STOCK EXCHANGE        

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE   

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was     
required to file such reports), and (2) has been subject to such filing         
requirements for the past 90 days.                                              
Yes  X  No                                                                      
---    ---                                                              
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive     
proxy or information statements incorporated by reference in Part III of this   
Form 10-K or any amendment to this Form 10-K.  [  ]                             

AT SEPTEMBER 11, 1996, THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY   
NONAFFILIATES OF THE REGISTRANT, BASED ON MARKET QUOTATIONS AS OF THAT DATE, WAS
APPROXIMATELY $488,836,132.                                                     

AS OF SEPTEMBER 11, 1996, THERE WERE 22,673,290 SHARES OF THE REGISTRANT'S      
COMMON STOCK OUTSTANDING.                                                       

DOCUMENTS INCORPORATED BY REFERENCE:  
------------------------------------  

Portions of the following documents are incorporated into this report by        
reference:                                                                      
 1. Part II   Registrant's Annual Report to Shareholders for fiscal year ended
July 31, 1996.                                    
2. Part III  Registrant's definitive Proxy Statement to be filed with the   
          Securities and Exchange Commission within 120 days after the
close of the fiscal year.                         

================================================================================

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TABLE OF CONTENTS 
----------------- 

PART I                

                                                                [Download Table]

                                                 PAGE 
                                                 ---- 
                                                      
Item 1.         Business.........................    1
                  General........................    1
                  Products.......................    2
                  Contracts......................    4
                  Subcontractors.................    5
                  Program Funding................    6
                  Principal Customers............    6
                  Backlog........................    6
                  Competition....................    7
                  Raw Materials and Suppliers....    8
                  Employees......................    8
                  Environmental Matters..........    8
                  Research and Development.......    9
                  Patents and Proprietary             
                  Information....................    9
                  Manufacturing..................   10
                  Overhaul and Repair Facilities.   10
                  Miscellaneous..................   10

Item 2.         Properties.......................   10

Item 3.         Legal Proceedings................   12

Item 4.         Submission of Matters to a Vote       
                 of Security Holders.............   15

Additional      Executive Officers of the             
Item             Registrant......................   15

                           PART II.                   

Item 5.         Market for Registrant's Common        
                 Equity and Related                   
                 Stockholder Matters.............   17

Item 6.         Selected Financial Data..........   17

Item 7.         Management's Discussion and           
                 Analysis of Financial                
                 Condition and Results of             
                 Operations......................   17

Item 8.         Financial Statements and              
                 Supplementary Data..............   17

Item 9.         Changes in and Disagreements          
                 with Accountants on                  
                 Accounting and Financial             
                 Disclosure......................   17

                           PART III.                  

Item 10.        Directors and Executive               
                 Officers of the Registrant......   18
                  Compliance with                     
                  Section 16(a) of the                
                  Securities Exchange                 
                  Act of 1934....................   18

Item 11.        Executive Compensation...........   18

Item 12.        Security Ownership of Certain         
                 Beneficial Owners and                
                 Management......................   18

Item 13.        Certain Relationships and             
                 Related Transactions............   19

                            PART IV.                  

Item 14.        Exhibits, Financial Statement         
                Schedules, and Reports                
                on Form 8-K......................   19

                           SIGNATURES                 

                Signature Page...................   27

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PART 1  

ITEM 1.  BUSINESS                                                               
-----------------                                                               

GENERAL                                                                         

Rohr, Inc., (the "Company"), incorporated in Delaware in 1969, is the 
successor to a business originally established in 1940 under the name of Rohr   
Aircraft Corporation.  The Company, a leading aerospace supplier, provides      
nacelle and pylon systems integration, design, development, manufacturing, and  
support services to the aerospace industry worldwide.  The Company focuses its  
efforts on the market for commercial aircraft which seat 100 or more passengers.
Its principal products include nacelles, which are the aerodynamic structures or
pods that surround an aircraft's engines; thrust reversers, which are part of   
the nacelle system and assist in the deceleration of jet aircraft after landing;
pylons (sometimes referred to as struts) which are the structures that attach   
the jet engines or the propulsion system to the aircraft; noise suppression     
systems; engine components; and structures for high-temperature environments. In
addition, the Company conducts product research and development in advanced     
composites and metals, high-temperature materials, acoustics, and manufacturing 
processes for existing and future applications.                                 

The Company sells products and services to the three major commercial 
airframe manufacturers (Boeing, Airbus, and McDonnell Douglas) and to the five  
major jet engine manufacturers (General Electric, Pratt & Whitney, Rolls-Royce, 
CFM International, and International Aero Engines). In addition, the Company has
the right on certain programs to provide customer and product support directly  
to airline operators and service centers around the world, including on-site    
field services and the sale of spare parts. The Company's commercial and        
government (military and space) products represented 92% and 8%, respectively,  
of its sales in the fiscal year ended July 31, 1996.                            

The Company has over 50 years of experience in the aerospace industry.
Originally, the Company operated as a subcontractor to the airframe             
manufacturers, building parts to the customer's design.  Later, it began to     
build to its own designs based on customer specifications.  Eventually, the     
Company also began operating as a subcontractor to the engine manufacturers who 
then provided the engine with nacelle to the airframe manufacturers.  In the    
1980s, the Company significantly expanded its role in many newer programs by    
becoming a systems integrator for nacelle systems with responsibility for the   
integration and management of the design, tooling, manufacture, and delivery of 
complete nacelle systems, directing the efforts of international consortia in   
some cases.  As a result of this range of experience, the Company can provide   
many different levels of service to its customers depending upon their needs.   
The Company can build to the customer's design, assist in that design, or assume
total responsibility for design, manufacture, integration and product support.  
In addition, over the last several years, the Company has expanded its services 
to the airlines through the direct sale of spare parts, the provision of        
technical support and training, and the operation of repair and overhaul        
facilities.                                                                     

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Products                                                                        

 General.  The Company designs and manufactures nacelle systems, nacelle
-------                                                               
components, pylons or struts, non-rotating components for jet engines, and other
components for commercial and military aircraft.  A nacelle system generally    
includes the nose cowl or inlet, fan cowl, nozzle systems and thrust reverser.  
The nacelle houses electrical, mechanical, fluid, and pneumatic systems together
with various panels, firewalls, and supporting structures; the aircraft engine  
(which is provided by the customer); and purchased or customer-furnished engine 
equipment such as electrical generators, starters, fuel pumps and oil coolers.  
The Company also performs engine build-ups ("EBU") by assembling nacelle systems
and the related electrical, mechanical, fluid and pneumatic systems onto core   
aircraft engines.                                                               

Commercial.  The Company has become a systems integrator, with        
----------                                                            
responsibility for the integration and management of the design, tooling,       
manufacture, and delivery of the complete nacelle or pylon system, including in 
some cases sale of spare parts directly to the aircraft operator.               

  The Company has full systems integration responsibility for the complete
nacelle with thrust reverser, and performs substantial manufacturing for the    
McDonnell Douglas MD-80, the Pratt & Whitney PW4000 series engine option for the
McDonnell Douglas MD-11 and the Airbus A310 and A300-600.  In some cases, while 
retaining full systems integration responsibility for the nacelle and thrust    
reverser, the company has subcontracted certain major components. These programs
include the CFM International CFM56-5 nacelle program and the International Aero
Engines (an international consortium) nacelle program (excluding inlet and fan  
cowl), both of which engines are being competitively marketed for the Airbus    
A319, A320 and A321; the CFM International-powered Airbus A340; and the         
McDonnell Douglas MD-90 aircraft. The company also has responsibility for the   
wing and tail pylon program for the McDonnell Douglas MD-11 aircraft, and has   
subcontracted the wing pylon manufacture and assembly.                          

   The Company manufactures the thrust reverser, nozzle, pylons and fan cowl
for Rolls-Royce engine options for the Boeing 757; the pylon for the Pratt      
engine option for the Boeing 757; the nacelle without thrust reverser for the   
CF6-80C2, which is the General Electric engine option for the Airbus A310 and   
A300-600 and McDonnell Douglas MD-11; the nacelle without thrust reverser for   
the CF6-80E1, which is the General Electric engine option for the A330; nacelle 
components, including the nose cowl, fan cowl, and extension ring, for the      
Boeing 737; and the aft fan case nozzle and plug for the General Electric GE 90 
engine option for the Boeing 777. Major components produced by the Company for  
the General Electric CF6-80C2 nacelle are also used on the Boeing 747 and 767.  

 The role of systems integrator, while broadening the Company's business
base in the commercial aerospace industry, typically requires a substantial     
investment in working capital and subjects the Company to increased market risk 
relative to the ultimate success of such programs. In those cases where the     
Company has in turn, subcontracted the design and production of major components
(CFM56-5, V2500, MD-90, A340 and the wing pylon for the MD-11) to foreign and   
domestic companies, some of the risks associated with such programs have been   
passed on to those subcontractors. However, the Company's performance and       
ultimate profitability on these programs is dependent on the performance of its 
subcontractors, including the timeliness and quality of their work, as well as  
the ability of the Company to monitor and manage its subcontractors. See        
"Subcontractors".                                                               

 In June 1995, the Company finalized an agreement with Boeing to design,
tool and manufacture the inlet and fan cowls for the Boeing 737-700 aircraft. In
July 1996, the Company delivered the first inlets and fan cowls for the         
aircraft.                                                                       

   In February 1996, BMW Rolls-Royce Aero Engines selected the Company to be
the nacelle system integrator for the new MD-95 aircraft. Delivery of           
development hardware is scheduled to start in fiscal 1997.                      

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In September 1996, the Company announced that it will manufacture     
modification kits for the re-engining of existing Boeing 727 aircraft with new  
Pratt & Whitney JT8D-217C/219 engines. The program, designated the "Super 27,"  
consists of new nacelles, struts, engine mounts and thrust reversers.           

Government (Military and Space).  For military aircraft, the Company  
-------------------------------                                       
manufactures nacelles for the Lockheed C-130 propjet transport aircraft on which
final deliveries of production hardware were completed in fiscal year 1996 and  
nacelle components for re-engining of existing Boeing KC-135 military aerial    
refueling tankers.  For the U.S. space program, the Company substantially       
completed deliveries in fiscal year 1996 of solid fuel rocket motor nozzles and 
insulated casings which are used on the Titan Space Launch Vehicle.  The Company
is providing technical support in designing the engine bay doors for the U.S.   
Air Force F-22 tactical fighter aircraft.  As a member of the Lockheed Martin   
team which was selected in July 1996 by NASA to build and fly a sub-scale       
demonstrator X-33 Single-Stage-to-Orbit ("SSTO") reusable launch vehicle, the   
Company will be responsible for the SSTO's thermal protection system design,    
fabrication and operability improvements.  The Company will employ its          
proprietary thermal protection system on the entire exterior of the X-33 except 
for the rockets, control jets and vertical tails.                               

The Company's government business has declined in recent years and the
Company expects the percentage of its revenues attributable to government sales 
to decline further in future years. The extent of future sales under military   
programs is dependent, among other things, upon continued government funding.   

Spare Parts.  The Company sells spare parts for both military and     
-----------                                                           
commercial aircraft, including those for aircraft in use but no longer in       
production. Such sales from continuing operations were approximately $178.5     
million in fiscal 1996, $142.5 million in fiscal 1995, and $148.9 million in    
fiscal 1994.                                                                    

   Historically, the Company has sold spare parts for commercial programs to
airframe or engine manufacturers which then resold them to the end user.        
However, under several major programs, the Company now has the right to sell    
spare parts directly to airlines (although on certain programs royalty payments 
to its customers are required).  The contracts that grant these rights to the   
Company generally require that the Company provide technical and product support
directly to the airlines.  Thus, on certain programs, the Company has the right 
to provide customer and product support directly to approximately 150 airline   
operators and service centers worldwide.  The Company's direct sales of spare   
parts to the airlines are expected to increase in the future as nacelle programs
on which the Company sells spare parts directly to the airlines mature and as   
the aircraft using those nacelles age.  Generally, the Company earns a higher   
margin on the direct sale of spare parts to airlines than it does on the sale of
spare parts to prime contractors (for resale to the airlines).  Prices for      
direct spare part sales are higher than prices for spare parts sold to prime    
contractors, in part, because of additional costs related to the technical and  
customer support activities provided to the airlines.                           

Other Activities.  The Company also manufactures other components for 
----------------                                                      
military and commercial jet aircraft, including the nozzle and plug used on the 
Rolls-Royce-powered versions of the Boeing 747 and 767 and the Airbus A330, and 
the acoustical ducts and/or acoustic panels for the Pratt & Whitney engine used 
on the McDonnell Douglas MD-80 and the Boeing 757.                              

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The Company has been performing nacelle modification and integration      
services for Pratt & Whitney, installing Boeing 757 nacelles under a Pratt &    
Whitney license, on the PW2000 series engine for use on the former Soviet       
Union's IL-96M/T transport aircraft. Pratt & Whitney has entered into a contract
with Boeing for additional nacelles and is negotiating final arrangements with  
the Company for additional modification and integration services.               

CONTRACTS                                                                   

 Most of the Company's major commercial contracts establish a firm unit price,
subject to cost escalation, over a number of years or, in certain cases, over   
the life of the related program.  Life-of-program agreements generally entitle  
the Company to work as a subcontractor in the program during the entire period  
the customer produces its aircraft or engine.  While the customer retains the   
right to terminate these long-term and life-of-program arrangements, there are  
generally significant costs for doing so.  The Company has experienced pressures
from customers to reduce prices.  In response, the Company has incorporated or  
is in the process of incorporating design changes on certain programs, allowing 
for a more cost effective manufacture of certain products, and is exerting      
pressure on its own suppliers to reduce prices.                                 

The Company's long-term contracts generally contain escalation clauses for  
revising prices based on published indices which reflect increases in material  
and labor costs.  Furthermore, in almost all cases, when a customer orders      
production schedule revisions (outside of a range provided in the contract) or  
design changes, the contract price is subject to adjustment.  These long-term   
contracts provide the Company with an opportunity to obtain increased profits if
the Company can perform more efficiently than it assumed at the time of pricing.
Conversely, there is the potential for significant losses if it cannot produce  
the product for the agreed upon price.                                          

  The Company's other commercial contracts generally provide a fixed price for a
specified number of units which, in many cases, are to be delivered over a      
specified period of time.  Under these contracts, prices are re-negotiated for  
each new order.  As a result, the Company has the opportunity to negotiate price
increases for subsequent units ordered if production costs are higher than      
expected.  The Company's customers, however, may seek price reductions from the 
Company in connection with any new orders they place.                           

On its longer-term contracts, the Company bases initial production prices on
estimates of the average cost for a block of the units which it believes will be
ordered.  Generally, production costs on initial units are substantially higher 
during the early years of a new contract or program, when the efficiencies      
resulting from learning are not yet fully realized, and decline as the program  
matures.  Learning typically occurs on a program as tasks and production        
techniques become more efficient through repetition of the same manufacturing   
operation and as management implements actions to simplify product design and   
improve tooling and manufacturing techniques.  If the customer orders fewer than
the expected number of units within a specified time period, certain of the     
Company's contracts have repricing clauses which increase the prices for units  
that have already been delivered.  However, other contracts do not include such 
repricing provisions and force the Company to bear certain market risks.  The   
Company analyzes the potential market for the products under such contracts and 
agrees to prices based on its estimate of the average estimated costs for the   
units it expects to deliver under the program.                                  

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 Many of the Company's contracts have provided for the recovery of a specified
amount of nonrecurring, pre-production costs, consisting primarily of design and
tooling costs.  In some cases, a significant portion of such pre-production     
costs have been advanced by the customer.  However, in negotiating some         
contracts, the Company has agreed to defer recovery of pre-production costs and 
instead to recover a certain amount of such costs with the sale of each         
production unit over an agreed number of production units plus spares           
equivalents.  In addition, on some of these contracts, based on its analysis of 
the potential market for the products covered by such contracts, the Company    
agreed to amortize pre-production costs over a number of units which was larger 
than the anticipated initial fabrication orders without the protection of a     
repricing clause or guaranteed quantities of orders.  On other commercial       
contracts, the Company receives advance payments with orders, or other progress 
or advance payments, which assist the Company in meeting its working capital    
requirements for inventories.  To reduce such funding requirements and market   
risks, the Company has subcontracted substantial portions of several of its     
programs.  See "Subcontractors".                                                

In accordance with practices in the aircraft industry, most of the Company's
commercial orders and contracts are subject to termination at the convenience of
the customer and on many programs the tooling and design prepared by the Company
are either owned by the customer or may be purchased by it at a nominal cost.   
The contracts generally provide, upon termination of firm orders, for           
reimbursement of costs incurred by the Company, plus a reasonable profit on the 
work performed.  The costs of terminating an entire contract or program can be  
significantly greater for the customer than the costs of terminating specific   
firm orders.  All of the Company's government contracts are subject to          
termination at the convenience of the government.  In such a situation, the     
Company is entitled to recover the costs it incurred prior to termination, plus 
a reasonable profit on the work performed.                                      

Under all contracts, the Company may encounter, and on several programs from
time to time has encountered, preproduction and/or production cost overruns     
caused by increased material, labor or overhead costs, design or production     
difficulties, increased quality requirements, redefined acceptance criteria on  
government programs, and various other factors such as technical and            
manufacturing complexity.  The Company seeks recovery of such cost overruns from
the customer if they are caused by the action or inaction of the customer;      
otherwise, such cost overruns will be, and in many cases have been, borne by the
Company.                                                                        

Incident to the manufacture and sale by the Company of its products, the    
Company is subject to possible liability by reason of (i) warranties against    
defects in design, material and workmanship; (ii) potential product liability   
responsibility arising out of the use of its products; and (iii) strict         
liability arising from the disposal of certain wastes covered by environmental  
protection laws.  The Company also has varying contractual obligations to       
maintain the ability to produce and service spare parts as long as there are    
specified numbers of aircraft still in operation. Many of the Company's         
contracts provide remedies ranging from actual damages to specified daily       
penalties for late deliveries of products.                                      

SUBCONTRACTORS                                                                  

 The competitive market has required the Company to make substantial financial
investments in programs on which it participates.  Both to reduce the burden and
risk of such financial investments, and also in some cases to participate in    
foreign programs, the Company has further subcontracted the design, development 
and production of substantial portions of several of its major components to    
other foreign and domestic corporations.  In return, those                      

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companies provided a portion of the investment and assumed a portion of the risk
associated with various of the Company's programs. The Company's performance and
ultimate profitability on these programs is dependent on the performance of its 
subcontractors, including the timeliness and quality of their work, as well as  
the ability of the Company to monitor and manage its subcontractors.            

PROGRAM FUNDING                                                                 

  The highly competitive nature of the aerospace market has required the Company
to commit substantial financial resources, largely for working capital, to      
participate with its customers on certain long-term programs.  Those working    
capital requirements consist primarily of nonrecurring pre-production costs such
as design and tooling, recurring costs for inventories and accounts receivables.

In some cases, a significant portion of the pre-production costs have been  
advanced by the customer.  However, in negotiating some contracts, the Company  
has agreed to defer recovery of pre-production costs and instead to recover a   
certain amount of such costs with the sale of each production unit over an      
agreed number of production units plus spares equivalents.  On some commercial  
contracts, the Company receives advance payments with orders, or other progress 
or advance payments, which assist the Company in meeting its working capital    
requirements for inventories.  On government contracts, the Company receives    
progress payments for both pre-production and inventory costs.  To reduce both  
its pre-production funding requirements and the build-up of program inventories,
the Company has entered into agreements with subcontractors to provide a portion
of the program funding needs and has subcontracted to these entities substantial
portions of many of its programs.  See "Subcontractors." Advances and progress  
payments have varied in the past and are subject to change in the future based  
on changes in both commercial and government procurement practices and          
governmental regulations.  Any future change could affect the Company's need for
program funding.                                                                

  Accounts receivable balances vary in accordance with various payment terms and
other factors including the periodic receipt of large payments from customers   
for reimbursement of non-recurring costs or for amounts which had been deferred 
pending aircraft certification.                                                 

The Company's primary sources of program funding have been funds generated  
from operations and borrowings.  See "Management's Discussion and Analysis of   
Financial Condition and Results of Operations--Liquidity and Capital Resources" 
in the Company's 1996 Annual Report to Shareholders.  With respect to new       
programs which are developed, the Company anticipates that it may team with     
partners, or obtain financial commitments from one or more qualified            
subcontractors, prior to entering bids for work.                                

PRINCIPAL CUSTOMERS                                                             

  For a discussion of the Company's sales to its principal customers, see "Notes
to the Consolidated Financial Statements" in the Company's 1996 Annual Report to
Shareholders, Note 3--"Accounts Receivable--Sales."                             

BACKLOG                                                                         

  The Company's backlog is significant to its business because the production of
most Company products involves a long lead time from order to shipment date.    
Firm backlog                                                                    

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represents the sales price of all undelivered units covered by customer orders. 
Firm backlog includes units ordered by a customer although the Company and the  
customer have not yet agreed upon a sales price. In such cases, the Company     
records in backlog an amount it believes (based upon all available information) 
is a reasonable price estimate.                                                 

The Company's firm backlog at July 31, 1996, was approximately $1.2 billion,
compared to $1.0 billion at July 31, 1995.  Of such backlog, approximately $700 
million is scheduled for delivery on or before July 31, 1997, with the balance  
to be delivered in subsequent periods.  A portion of the Company's expected     
sales for fiscal 1997 is not included in firm backlog.                          

  All of the Company's firm backlog is subject to termination or rescheduling at
the customer's convenience.  The Company's contracts generally provide for      
reimbursement of costs incurred, plus a reasonable profit on such costs, with   
respect to any firm orders that are terminated.  Historically, it has been rare 
for a customer to cancel units in firm backlog because of its obligations to the
Company with respect to such units and its obligations to suppliers of          
components other than nacelles and pylons, who frequently are producing         
concurrently components for use with the units ordered from the Company.        

COMPETITION                                                                     

The Company's principal competition is Boeing (which in addition to being a 
Company customer also manufactures nacelle systems and pylons for its own       
aircraft), other significant aerospace corporations who have development and    
production experience with respect to portions of the nacelle system, and the   
companies to whom the Company has subcontracted various components and who could
(and have) bid on contracts in competition with the Company.  Military aerospace
contractors are also potential competitors, as excess capacity created by       
reductions in defense spending could cause some of these contractors to look to 
expand in commercial markets.                                                   

  Because of recent reductions in demand in the aircraft manufacturing industry,
excess production capacity exists in the market for a number of the Company's   
principal products, which may result in increasingly intense price competition  
for orders.  While the Company believes it competes effectively, there can be no
assurance that the Company can maintain its share of the market for these       
products.                                                                       

The Company believes that its capabilities and technology, which range from 
research and development through component design and testing, flight           
certification assistance, component production and integration and airframe     
production line assistance, contribute significantly to its market position.    
The Company also believes that its contractual rights to participate on programs
for long periods of time or, in some cases, over the life of programs also      
contribute to the maintenance of its market position.                           

Even with respect to its shorter term contracts, the Company is likely to   
continue working as a subcontractor for the prime contractors well beyond the   
end of the existing shorter term contracts.  The Company has long standing      
relationships with all of its significant customers.  The Company's continued   
participation on existing programs provides cost advantages to the prime        
contractors because it avoids the cost of disassembling, moving, reassembling   
and recalibrating the customized tooling used to manufacture aerospace products 
which would be necessary if a program were transferred to a new subcontractor at
the end of a short-term contract.  In addition, the delays inherent in such a   
transfer are likely to disrupt the prime contractor's own production schedule as
the flow of deliveries from the subcontractor is                                

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interrupted during the transfer. It is also generally more expensive for a new  
subcontractor to begin producing products in the middle of an existing program  
than it is for the Company to continue producing the required products. A new   
subcontractor's employees must learn program specific tasks with which the      
Company's employees will already be familiar. As a result of all of these       
factors, it is unusual for a prime contractor to shift a major aerospace        
subcontract from one manufacturer to another at the end of a short-term         
contract.                                                                       

 Competitive factors include price, quality of product, design and development
capability combined with the ability to quickly bring a product to market,      
ability to consistently achieve scheduled delivery dates, manufacturing         
capabilities and capacity, technical expertise of employees, the desire or lack 
thereof of airframe and engine manufacturers to produce certain components in-  
house, and the willingness, and increasingly the ability, of the Company and    
other nacelle manufacturers to accept financial and other risks in connection   
with new programs.                                                              

RAW MATERIALS AND SUPPLIERS                                                     

The principal raw materials used by the Company are sheet, plate, rod, bar, 
tubing, and extrusions made of aluminum, steel, Inconel and titanium; electrical
wire; rubber; adhesives; and advanced composite products.  The principal        
purchased components are aircraft engine equipment, custom machined parts, sheet
metal details, and castings and forgings.  All of these items are procured from 
commercial sources.  Supplies of raw materials and purchased parts historically 
have been adequate to meet the requirements of the Company.  However, from time 
to time, shortages have been encountered, particularly during high industry     
production and demand.  While the Company endeavors to assure the availability  
of multiple sources of supply, there are many instances in which, either because
of a customer requirement or the complexity of the item, the Company may rely on
a single source.  The failure of any of these single source suppliers or        
subcontractors to meet the Company's needs could seriously delay production on a
program.  The Company monitors the delivery performance, product quality and    
financial health of its critical suppliers, including all of its single source  
suppliers.  Over the last ten years, which includes the period from 1987 through
1991 when the Company's sales grew rapidly, there have been occasions of        
periodic, short-term delays from suppliers, but none of these delays has had a  
material adverse effect on the Company or its ability to deliver products to its
customers.                                                                      

EMPLOYEES                                                                       

 At July 31, 1996, the Company had approximately 3,800 full-time employees, of
whom approximately 1,016 were represented by the International Association of   
Machinists and Aerospace Workers under agreements which expire on February 15,  
2000; approximately 110 were represented by the International Union, United     
Automobile, Aerospace and Agricultural Implement Workers of America under an    
agreement which expires on October 29, 2000; and approximately 15 were          
represented by the International Union of Operating Engineers under an agreement
which expires on June 25, 2000.  The Company considers its relationship with its
employees generally to be satisfactory.                                         

ENVIRONMENTAL MATTERS                                                           

As an international aerospace manufacturing corporation, the Company is     
subject to foreign, federal, state and local laws and regulations that limit the
discharge of pollutants into the air, soil and water and establish standards for
the treatment, storage and disposal of                                          

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hazardous wastes. If the Company were to violate or otherwise to have liability 
pursuant to any of these laws or regulations, it could be subject to judicial or
administrative enforcement proceedings requiring the Company to investigate the 
nature and extent of any pollution it caused, to remediate such pollution, to   
install control devices in its manufacturing facilities to reduce the amount of 
pollutants entering the environment and to otherwise respond to orders and      
requests of the courts and the various regulatory agencies. These proceedings   
could result in the Company expending additional funds to satisfy judicial or   
regulatory decisions. The Company does not believe that its environmental risks 
are materially different from those of comparable manufacturing companies.      
Nevertheless, the Company cannot provide assurances that environmental laws will
not adversely affect the Company's operations and financial condition in the    
future. Environmental risks are generally excluded from coverage under the      
company's current insurance policies. See "Management's Discussion and Analysis 
of Financial Condition and Results of Operations--Environmental Matters" and    
"Notes to the Consolidated Financial Statements, Note 8, Commitments and        
Contingencies," in the Company's 1996 annual report to shareholders. See, also, 
Item 3, "Legal Proceedings," in this report.                                    

The Company is involved in several proceedings and investigations related to
waste disposal sites and other environmental matters.  See Item 3, "Legal       
Proceedings," for a discussion of these matters, and additional suits and       
matters that are pending or have been threatened against the Company.           

Based upon presently available information, the Company believes that       
aggregate costs in relation to all environmental matters of the Company will not
have a material adverse effect on the Company's financial condition, liquidity, 
results of operations or capital expenditures.                                  

RESEARCH AND DEVELOPMENT                                                        

 The Company's research and development activities are designed to improve its
existing products and manufacturing processes, to enhance the competitiveness of
its new products, and to broaden the Company's aerospace product base.          

  Most of its product development is funded through regular production contracts
and other agreements, several of which are funded by the U.S. government.  The  
Company developed the world's first all composite nacelle and its large cascade 
thrust reverser under such contracts.  The Company also performs self-funded    
research and development through which it developed proprietary products which  
control noise and prevent ice formation on nacelles.                            

 The Company seeks research and development contracts from the U.S. government
and from commercial customers in targeted areas of interest such as composite   
materials and advanced low-cost processing and joining of new materials.  From  
time to time, the Company also enters into joint research and development       
programs with its customers.                                                    

PATENTS AND PROPRIETARY INFORMATION                                             

The Company has obtained patents and developed proprietary information which
it believes provide it with a competitive advantage.  For example, the Company  
holds patents on the DynaRohr family of honeycomb sound attenuation structures, 
the state-of-the-art RohrSwirl system which prevents ice formation on the       
leading edges of nacelles, and bonding processes for titanium and other metals. 
In addition, the Company has developed proprietary information covering such    
matters as nacelle design, sound attenuation, bonding of metallic and advanced  

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composite structures, material specifications and manufacturing processes.  The 
Company protects this information through invention agreements with its         
employees and confidentiality agreements with third parties.  Although the      
Company believes that its patents and proprietary information allow it to       
produce superior products, it also believes that the loss of any such patent or 
disclosure of any item of proprietary information would not have a material     
adverse effect on the Company.                                                  

MANUFACTURING                                                                   

  The Company's products are manufactured and assembled at its facilities in the
United States and Europe by an experienced work force.  The Company considers   
its facilities and equipment generally to be in good operating condition and    
adequate for the purpose for which they are being used.   In addition, it has a 
substantial number of raw material suppliers and numerous subcontractors to     
produce components, and in some cases, major assemblies.                        

  The Company's European final assembly sites, which are located adjacent to the
Company's major European customer, Airbus, allow the Company to respond quickly 
to  customer needs.  The Company believes that these European sites provide it  
with advantages in obtaining certain contracts with Airbus because they allow   
the Company to perform a portion of the required work in Europe.                

OVERHAUL AND REPAIR FACILITIES                                                  

The Company has three overhaul and repair facilities which have been        
officially certified by the Federal Aviation Administration ("FAA") of the U. S.
Department of Transportation to operate as FAA-approved repair stations.  The   
facilities are located in Fairhope, Alabama; Toulouse, France; and Loyang,      
Singapore.  The Singapore facility is jointly owned by the Company and Singapore
Aerospace Manufacturing Pte., Ltd.  With the recent authorization of the        
Singapore facility by the Civil Aviation Authority of Singapore to perform      
overhaul and repair work, the Company has the full capability to overhaul and   
repair nacelles and thrust reversers for airlines operating virtually anywhere  
in the world.                                                                   

In September 1996 the Company announced plans to expand its current European
overhaul and repair presence by opening an overhaul and repair facility in      
Prestwick, Scotland in December 1996.                                           

MISCELLANEOUS                                                                   

No material portion of the Company's business is considered to be seasonal. 

ITEM 2.  PROPERTIES                                                             
-------------------                                                             

 All owned and leased properties of the Company are generally well maintained,
in good operating condition, and are generally adequate and sufficient for the  
Company's business.  The Company's properties are substantially utilized;       
however, due to the downturn in the aerospace industry, the Company has  excess 
manufacturing capacity.  All significant leases (except for leases associated   
with industrial revenue bond financings) are renewable at the                   

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Company's option on substantially similar terms, except for increases of rent   
which must be negotiated in some cases.                                         

The following table sets forth the location, principal use, approximate size
and acreage of the Company's major production facilities.  Those which are owned
by the Company and its subsidiaries are owned free of material encumbrances,    
except as noted below:                                                          

                                                        [Enlarge/Download Table]


                                                       Owned                              Leased             
                                            -----------------------------  ----------------------------------
                                            Approximate                    Approximate                       
                                            Square Feet                    Square Feet                       
                               Type of      of Facility       Approximate  of Facility          Approximate  
     Location                  Facility(1)     (000)            Acreage       (000)               Acreage    
-----------------------------  -----------  -----------      ------------  -----------          ------------ 
                                                                                                             
ALABAMA                                                                                                      
  Fairhope(2)................  A,B              123                 70.6        --                   --      
  Foley(2)...................  A,B              343                163.7        --                   --      
ARKANSAS                                                                                                     
  Arkadelphia(3).............  A,B              224                 65.2        --                   --      
  Heber Springs(2)...........  A,B              153                 70.5        --                   --      
  Sheridan(2)................  A,B              149                 78.0        --                   --      
CALIFORNIA                                                                                                   
  Chula Vista................  A,B,C,D        2,743                 97.5      11.8                 57.5      
  Moreno Valley(4)...........  A,B,C             82                  8.9        --                   --      
  Riverside..................  A,B,C,D        1,162                 75.3        --                   --      
FRANCE                                                                                                       
  Toulouse/St. Martin........  A,B,C            132                  7.0        18                  3.2      
  Toulouse/Gramont(2)........  A,B              170                 23.0        --                   --      
GERMANY                                                                                                      
  Hamburg....................  A,B               28                  5.3        --                   --      
MARYLAND                                                                                                     
  Hagerstown.................  A,B              423                 55.7        --                   --      
TEXAS                                                                                                        
  San Marcos.................  A,B              172                 55.0        --                   --      
                                            -----------      ------------  -----------          ------------ 
  Approximate Totals.........                 5,904                775.7      29.8                 60.7      
-------------                                                                                                

                                                        [Enlarge/Download Table]

                                                                                                                                   
(1)  The letters indicated for each location describe the principal  (2)  Subject to a capital lease.                              
      activities conducted at that location:                                                                                       
          A-Office                                                   (3)  The completion of construction of this facility has      
          B-Manufacturing                                                 been deferred.  The Company has taken an impairment write
          C-Warehouse                                                     down on the facility and anticipates listing it for sale 
          D-Research and Testing                                          in the near future.                                      

                                                                     (4)  This facility has been vacated and listed for sale.      

The above table does not include a 44,000 square foot service center located in 
Singapore which is owned jointly by the Company and Singapore Aerospace         
Manufacturing Pte. Ltd.                                                         

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ITEM 3.  LEGAL PROCEEDINGS                                                      
--------------------------                                                      

A. Accounts receivable and inventories include estimated recoveries on      
constructive change claims that the Company has asserted with respect to costs  
it incurred as a result of government imposed redefined acceptance criteria on  
several government subcontracts.  In connection with the Grumman F-14           
subcontract, the Company filed Appeal No. 47139 (filed February 7, 1994) before 
the Armed Service Board of Contract Appeals ("ASBCA").  In connection with the  
Boeing E3/E6 subcontract, the Company filed Appeal No. 47430, (filed April 11,  
1994) before the ASBCA.  In the above appeals, the Company's customers are      
sponsors of the claims, the U.S. Navy is the defendant, and the Company is      
claiming monetary damages.  Management believes that the amounts reflected in   
the financial statements are within the range of estimates of the amounts for   
which these matters will be resolved.  The resolution of these matters may take 
several years.  See "Notes to the Consolidated Financial Statements, Note 3",   
contained in the Company's 1996 Annual Report to Shareholders.                  

B. In June 1987, the U.S. District Court of Los Angeles, in U.S. et al. vs. 
Stringfellow (United States District Court for the Central District of          
California, Civil Action No. 83-2501 (JMI)), granted partial summary judgment   
against the Company and 14 other defendants on the issue of liability under the 
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").
This suit, along with related lawsuits, alleges that the defendants are jointly 
and severally liable for all damage in connection with the Stringfellow         
hazardous waste disposal site in Riverside County, California. In June 1989, a  
federal jury and a special master appointed by the federal court found the State
of California also liable for the cleanup costs. On November 30, 1993, the      
special master released his "Findings of Fact, Conclusion of Law and Reporting  
Recommendations of the Special Master Regarding the State Share Fact Finding    
Hearing". In it, he allocated liability between the State of California and     
other parties. As this hearing did not involve the valuation of future tasks and
responsibilities, the order did not specify dollar amounts of liability. The    
order, phrased in percentages of liability, recommended allocating liability on 
the CERCLA claims as follows: 65% to the State of California and 10% to the     
Stringfellow entities, leaving 25% to the generator/counterclaimants (including 
the Company) and other users of the site (or a maximum of up to 28% depending on
the allocation of any Stringfellow entity orphan share). On the state law       
claims, the special master recommended a 95% share for the State of California, 
and 5% for the Stringfellow entities, leaving 0% for the                        
generator/counterclaimants. The special master's recommendation is subject to a 
final decision and appeal. The Company and other generators of wastes disposed  
at the Stringfellow site, which include numerous companies with assets and      
equity significantly greater than the Company, are jointly and severally liable 
for the share of cleanup costs for which the generators, as a group, ultimately 
are found to be responsible. Notwithstanding, CERCLA liability is sometimes     
allocated among hazardous waste generators who used a waste disposal site based 
on the volume of hazardous waste they disposed of at the site. The Company is   
the second largest generator of wastes disposed at the site by volume, although 
it and certain other generators have argued the final allocation among          
generators of their shares of cleanup costs should not be determined solely by  
volume. The largest generator of                                                

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wastes disposed at the Stringfellow site, by volume, has indicated it is        
significantly dependent on insurance to fund its share of any cleanup costs, and
that it is in litigation with certain of its insurers. The Company intends to   
continue to defend vigorously these matters and believes, based on currently    
available information, that the ultimate resolutions of these matters will not  
have a material adverse effect on the financial position or results of          
operations of the Company.                                                      

 The Company filed claims against its comprehensive general liability insurers
for reimbursement of its cleanup costs at the Stringfellow site.  These claims  
are the subject of separate litigation, United Pacific Insurance Co., et al. vs.
Rohr Industries, Inc., et al., No. C634195 in the Los Angeles Superior Court.   
The Company has reached settlements with its primary comprehensive general      
liability insurance carriers and has retained the right to file future claims   
against its excess carriers.                                                    

C.  In December 1989, the Maryland Department of the Environment ("MDE")    
served the Company with a Letter and Consent Order No.  CO-90-093.  The Consent 
Order calls for investigation and remediation of chemicals detected in soil and 
ground water at the Company's bonding facility in Hagerstown, Maryland.  The    
Company and MDE subsequently negotiated a mutually acceptable Consent Order     
under which the Company has developed a work plan to determine the nature and   
extent of the pollution at the bonding plant.  The Company had acquired the     
bonding plant from Fairchild Industries, Inc. ("Fairchild"), in September 1987  
and Fairchild had agreed to retain responsibility for and to indemnify the      
Company against any claims and fees in connection with any hazardous materials  
or pollutants released into the environment at or near the bonding plant or any 
other property before the closing date of the sale.  On March 11, 1993, the     
Company and Fairchild executed a settlement agreement pursuant to which         
Fairchild substantially reimbursed the Company for past costs relating to       
environmental investigations at the bonding plant.  The parties also agreed on a
procedure to perform the work required under the MDE Consent Order.  Based on   
currently available information, the Company believes that the resolution of    
this matter will not have a material adverse effect on the financial position or
results of operations of the Company.                                           

D. In July 1994, the Department of Toxic Substances Control of the State of 
California Environmental Protection Agency ("DTSC") filed an action against  the
Company and other individuals and companies in the U. S. District Court for the 
Eastern District of California, Case No. CV-F-94-5683-GEB DLB, seeking, among   
other things, recovery of response costs approximating $1.3 million plus        
interest and attorney fees.  The demand for payment, which is joint and several,
is for expenses allegedly incurred by DTSC personnel in the oversight of the    
cleanup of the Rio Bravo deep injection well disposal site in Shafter,          
California.  The cleanup is currently being conducted by a group of cooperating 
potentially responsible parties ("PRPs"), including the Company ("the           
Cooperating PRPs").  In January 1996, the DTSC and the Cooperating PRPs settled 
the monetary claim for a reduced amount.  In addition, the Cooperating PRPs have
agreed to plug and abandon the deep injection well which will resolve the last  
remaining cleanup issues.  Based on currently available information,            

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the Company believes that the resolution of this matter will not have a material
adverse effect on the financial position or results of operations of the        
Company.                                                                        

E.  During fiscal 1993, Region IX of the United States Environmental  
Protection Agency ("EPA") named the Company as a generator of hazardous wastes  
that were transported to the Casmalia Resources Hazardous Waste Management      
Facility (the "Casmalia Site") in Casmalia, California.  In July 1996 the       
Company and approximately 50 other cooperating generators executed a Consent    
Decree and an Administrative Order on Consent which obligated the cooperating   
generators to perform, jointly and severally, certain responsive actions at the 
Casmalia Site prior to the entry of the Consent Decree.  The Company does not   
yet know the ability of all other PRPs at this site, which include companies of 
substantial assets and equity, to fund their allocable share.  Some PRPs have   
made preliminary estimates of cleanup costs at this site of approximately $60 to
$70 million and the Company's share (based on estimated, respective volumes of  
discharge into such site by all generators, all of which cannot now be known    
with certainty) could approximate $1.8 million.  Based on currently available   
information, the Company believes that the resolution of this matter will not   
have a material adverse effect on the financial position or results of          
operations of the Company.                                                      

     F.  By letter dated July 14, 1994, the Company was notified by the State of
Washington's Department of Ecology that the Department believes the Company to  
be a "potentially liable person" ("PLP") under the Model Toxics Control Act of  
the Revised Code of Washington.  The Company is alleged to have arranged for the
disposal or treatment of a hazardous substance or arranged with a transporter   
for disposal or treatment of a hazardous substance at a facility in Washington  
known as the Yakima Railroad Area.  The Department has made a written           
determination that the Company is a PLP.  In June 1996, the Department advised  
the Company that it has been drafting a uniform settlement offer to be extended 
individually to the PLPs, specifically, those who, like the Company, allegedly  
shipped carbon to the site.  The settlement will be based on pounds of PCE-     
containing carbon shipped to the site.  The Department anticipates that the     
settlement program will be ready to implement in or about September 1996.  Based
on currently available information, the Company believes that the resolution of 
this matter will not have a material adverse effect on the financial position or
results of operations of the Company.                                           

    G.  In July 1996 the United States Environmental Protection Agency ('EPA")
advised the Company that it was working under the Superfund program to          
investigate and clean up contamination from hazardous substances, particularly  
polychlorinated biphenyls (PCBs), volatile organic compounds (VOCs), and waste  
oils from the Hayford Bridge Groundwater Superfund Site located in St. Charles, 
Missouri.  The EPA further advised the Company that business records from the   
site operator indicated that the Company sent materials to the facility for     
services which may have included recycling, reclamation, generation, disposal,  
treatment, storage, chemical processing, manufacture or other handling.  The EPA
further requested the Company to respond to an information request concerning   
the Company's use of the facility between 1963 and 1989.  The Company is        
currently researching its records in order to respond to the                    

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information request. Based on currently available information, the Company      
believes that the resolution of this matter will not have a material adverse    
effect on the financial position or results of operations of the Company.       

  H.  From time to time, various environmental regulatory agencies request
that the Company conduct certain investigations on the nature and extent of     
pollution, if any, at its various facilities. For example, such a request may   
follow the spill of a reportable quantity of certain chemicals. At other times, 
the request follows the removal, replacement or closure of an underground       
storage tank pursuant to applicable regulations. At present, the Company's Chula
Vista facility is conducting certain investigations pursuant to discussions with
the San Diego County Department of Health Services, Hazardous Materials         
Management Division and the San Diego Regional Water Quality Control Board. The 
Company intends to cooperate fully with the various regulatory agencies.        

  I.  In addition to the litigation discussed above, from time to time the
Company is a defendant in lawsuits involving (i) claims based on the Company's  
alleged negligence or strict liability as a manufacturer in the design or       
manufacture of various products; (ii) claims based upon environmental protection
laws; and (iii) claims based on the alleged wrongful termination of its         
employees due to, among other things, discrimination based on race, age, sex,   
national origin, handicap status, sexual preference, etc.  The Company believes 
that in those types of cases now pending, or in claims known by the Company to  
be asserted against it whether or not reduced to a legal proceeding, it either  
has no material liability or any such liability is adequately covered by its    
reserves or its liability insurance, subject to certain deductible amounts.  The
Company is aware that various of its insurers may assert, and in some such cases
have asserted, that their insurance coverage does not provide protection against
punitive damages in any specific lawsuit.  While there can be no assurances that
the Company will not ultimately be found liable for material punitive damages,  
the Company does not now believe that it has an exposure to any material        
liability for punitive damages.                                                 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    
------------------------------------------------------------                    

There is no information required to be submitted by the Company under this  
Item.                                                                           

ADDITIONAL ITEM.  EXECUTIVE OFFICERS OF THE COMPANY                             
---------------------------------------------------                             

As of September 11, 1996, the executive officers of the Company, in addition
to R. H. Rau, President and Chief Executive Officer, referred to at Item 10,    
Part III, were as follows:                                                      

     LAURENCE A. CHAPMAN, Senior Vice President and Chief Financial Officer, age
  47, joined the Company in May 1994.  Prior to that and since 1981, he worked
for Westinghouse Electric Company ("Westinghouse").  He had been the Vice 
President and Treasurer of Westinghouse since January 1992.  He was       
previously the Chief Financial Officer of Westinghouse Financial Services,
Inc., a wholly-                                                           

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owned subsidiary of Westinghouse. Prior to that, Mr. Chapman held positions in  
Corporate Finance and Corporate Planning with Westinghouse.                     

    JOHN R. JOHNSON, Senior Vice President, Programs, Technical Resources, and
 Quality Assurance, age 59, has served in his present position since January
  1994.  Prior to that and since September 1979, he has served in other senior
 management positions, including Senior Vice President, Programs and Support
from March 1993 to January 1994; Vice President, Government Business from 
February 1990 to February 1993; Vice President, Planning from May 1989 to 
February 1990; and Vice President, Manufacturing, Chula Vista, from April 
1986 to May 1989.  He joined the Company in September 1979.               

   RICHARD W. MADSEN, Vice President, General Counsel and Secretary, age 57,
   has served in his present position since December 5, 1987.  Prior to that and
   since August 1979, he served as Secretary and head of the legal function, and
has been an employee of the Company since 1974.                           

    ALVIN L. MAJORS, Vice President and Controller (Chief Accounting Officer),
   age 56, has served in his present position since May 1989.  Prior to that and
   since December 1987 he served as the Company's Controller.  Prior to that and
  since 1971, he has served in other senior management positions.  He has been
an employee of the Company since 1971.                                    

DAVID R. WATSON, Senior Vice President - Customer Support and Business
Development, age 45, has served in his present position since March 1994,   
assuming the title of Senior Vice President in June 1994.  Prior to that and
since May 1991, he served as Vice President, Commercial Programs.  In May   
1989, he assumed the position of Vice President and General Manager of the  
Company's Riverside facility.  He has been an employee since February 1988  
when he joined the Company as Vice President, Quality Assurance.            

   GRAYDON A. WETZLER, Senior Vice President, Operations, age 54, has served
in his present position since January 1994.  Prior to that and since July 
1993, he served as Vice President, Technical and Quality Assurance.  From 
November 1990 to July 1993, he served as Vice President Quality/Product   
 Assurance.  From April 1987 to November 1990, he served as Vice President -
Management Information Systems.  He has served in other senior management 
positions.  He has been an employee of the Company since 1979.            

 The terms of office of Messrs. Chapman and Madsen expire on December 7, 1996.
The initial three-year term of Mr. Rau's Employment Agreement terminated on July
31, 1996; however, the agreement is automatically extended for successive       
periods of one year each unless the Board of Directors gives one year's advance 
written notice of its intention to terminate the agreement. The other executive 
officers named above serve at the pleasure of the Chief Executive Officer.      

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PART II 

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  
------------------------------------------------------------------------------  

Although a cash dividend has not been paid since 1975, a 2-for-1 stock      
dividend was paid in December 1985.  Currently, under the terms of certain      
covenants in several of the Company's principal financing agreements, the       
Company may not pay cash dividends until after April 25, 1997.  Thereafter, the 
Company's ability to  pay cash dividends is restricted substantially.           

Other information required by this Item is set forth in the section headed  
"Rohr Profile" in the Registrant's Annual Report to Shareholders for the fiscal 
year ended July 31, 1996, and such information is incorporated herein by        
reference.                                                                      

ITEM 6.  SELECTED FINANCIAL DATA                                                
--------------------------------                                                

The information required by this Item is set forth in the section headed    
"Selected Financial Data" in the Company's Annual Report to Shareholders for the
fiscal year ended July 31, 1996, and such information is incorporated herein by 
reference.                                                                      

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS                                                                   
-------------                                                                   

The information required by this Item is set forth in the section headed    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" in the Company's Annual Report to Shareholders for the fiscal year  
ended July 31, 1996, and such information is incorporated herein by reference.  

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                            
-----------------------------------------------------                           

The information required by this Item is set forth in the section headed    
"Consolidated Balance Sheets," "Consolidated Statements of Operations,"         
"Consolidated Statements of Shareholders' Equity," "Consolidated Statements of  
Cash Flows," and "Notes to the Consolidated Financial Statements" in the        
Company's Annual Report to Shareholders for the fiscal year ended July 31, 1996,
and such information is incorporated herein by reference.                       

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
------------------------------------------------------------------------        
FINANCIAL DISCLOSURE                                                            
--------------------                                                            

There is no information required to be submitted by the Company under this  
Item.                                                                           

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PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    
------------------------------------------------------------                    

The information required under this Item is set forth in the section headed 
"Election of Directors" in the Company's Proxy Statement for the 1996 Annual    
Meeting of Shareholders for fiscal year ended July 31, 1996, and such           
information is incorporated herein by reference.  See also "Additional Item" at 
Part I of this report.                                                          

Compliance with Section 16(a) of The Securities Exchange Act of 1934            
--------------------------------------------------------------------            

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's 
officers and directors, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file reports of ownership and      
changes in ownership with the Securities and Exchange Commission ("SEC") and the
New York Stock Exchange.  Officers, directors and greater than 10-percent       
shareholders are required by SEC regulations to furnish the Company with copies 
of all Section 16(a) forms they file.  Based solely on its review of the copies 
of such forms received by it, or written representations from certain reporting 
persons that no such forms were required for those persons, the Company believes
that, during fiscal year 1996, all filing requirements applicable to its        
officers, directors, and greater than 10-percent beneficial owners were complied
with, except Mr. Rau, the Company's President and Chief Executive Officer, filed
a Form 4 in June 1996 reporting (i) the receipt of a grant of 40,000 shares of  
the Company's common stock in 1993 (previously disclosed in the Company's Proxy 
Statements since 1993) and (ii) the acquisition of 2,850 shares of the Company's
common stock by his wife in fiscal year 1995.                                   

ITEM 11.  EXECUTIVE COMPENSATION                                                
--------------------------------                                                

The information required by this Item is set forth in the section headed    
"Executive Compensation and Other Information" and in the section headed        
"Directors' Beneficial Ownership and Compensation" in the Company's Proxy       
Statement for the 1996 Annual Meeting of Shareholders for fiscal year ended July
31, 1996, and such information is incorporated herein by reference.             

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        
------------------------------------------------------------------------        

The information required by this Item is set forth in the table headed      
"Beneficial Ownership of Shares" in the Company's Proxy Statement for the 1996  
Annual Meeting of Shareholders for fiscal year ended July 31, 1996, and such    
information is incorporated herein by reference.                                

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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        
--------------------------------------------------------                        

There is no information required to be submitted by the Company under this  
Item.                                                                           

PART IV 

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K      
--------------------------------------------------------------------------      

The following consolidated financial statements of the Company and          
consolidated subsidiaries, included in the Company's 1996 Annual Report to      
Shareholders, are incorporated by reference in Item 8:                          

(a)  1.  Financial Statements                                               
--------------------                                      

    Consolidated Balance Sheets at July 31, 1996, and 1995

    Consolidated Statements of  Operations for Years Ended
July 31, 1996, 1995, and 1994                     

 Consolidated Statements of Shareholders' Equity for
Years Ended July 31, 1996, 1995, and 1994         

Consolidated Statements of Cash Flows for Years   
Ended July 31, 1996, 1995, and 1994               

Notes to the Consolidated Financial Statements    

(a)  2.  Financial Statement Schedules                                      
-----------------------------                             

    The following consolidated financial statement schedule of the
     Company and subsidiaries is included in Part IV of this report.

Schedule II  -  Valuation and Qualifying Accounts 

          All other schedules are omitted because they are not applicable, not
           required under the instructions or the information is included in the
financial statements or notes thereto.                    

(a)  3. Index to Exhibits                                                 
-----------------                                         

        3.1      Restated Certificate of Incorporation of Rohr Industries, Inc.,
             dated December 7, 1985, incorporated herein by reference to
                 Exhibit 3.1 filed with Form 10-K for fiscal year ended July 31,
1986.                                         

     3.2      Certificate of Designations of Series C Junior Participating
                Cumulative Preferred Stock $1.00 Par Value of Rohr Industries,
Inc., dated August 15, 1986.                  

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             incorporated herein by reference to Exhibit 3.2 filed with Form
10-K for fiscal year ended July 31, 1986.         

3.3       Certificate of Amendment to Restated Certificate of         
           Incorporation, dated December 9, 1986, incorporated herein by
           reference to Exhibit 3.3 filed with Form 10-K for fiscal year
ended July 31, 1987.                              

3.4       Certificate of Amendment to Restated Certificate of         
            Incorporation, dated December 10, 1991, incorporated herein by
              reference to Exhibit II filed with Form 8-K dated as of December
7, 1991.                                          

3.5       Bylaws, as amended December 3, 1994, incorporated herein by 
            reference to Exhibit 3.8 filed with Form 10-Q for period ended
January 29, 1995.                                 

  4.1       Indenture, dated as of March 1, 1987, between Rohr Industries,
          Inc., and Bankers Trust Company, trustee, relating to 9 1/4%
          subordinated debentures, incorporated herein by reference to
            Exhibit 4.1 filed with Form 10-Q for period ended May 2, 1993.

     4.2       Indenture, dated as of October 15, 1987, between Rohr Industries,
      Inc., and Bankers Trust Company, trustee, relating to 7%
         convertible subordinated debentures, incorporated herein by
            reference to Exhibit 4.2 filed with Form 10-Q for period ended
May 2, 1993.                                      

    4.3       Indenture, dated as of May 15, 1994, between Rohr, Inc., and IBJ
           Schroder Bank and Trust Company, trustee, relating to 11 5/8%
           senior notes, incorporated herein by reference to Exhibit 4.5
filed with Form 10-Q for period ended May 1, 1994.

    4.4       Indenture, dated as of May 15, 1994, between Rohr, Inc., and The
       Bank of New York, trustee, relating to 7 3/4% convertible
             subordinated notes, incorporated herein by reference to Exhibit
    4.6 filed with Form 10-Q for period ended May 1, 1994.

     4.5       Amended and Restated Note Agreement, dated as of January 1, 1996,
               relating to the 9.35% Series A Senior Notes due January 29, 2000,
           the 9.35% Series B Senior Notes due January 29, 2000, and the
             9.33% Series C Senior Notes due December 15, 2001, incorporated
           herein by reference to Exhibit 4.5.2 filed with Form 10-Q for
period ended January 28, 1996.                    

     4.7       Amended and Restated Rights Agreement, dated as of April 6, 1990,
             incorporated herein by reference to Item 7 of Form 8-K dated as
of April 6, 1990.                                 

4.7.1     Amendment No. 1 to Amended and Restated Rights Agreement,   
              incorporated herein by reference to Exhibit 4.7, filed with Form
10-Q for period ended January 28, 1996.           

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10.1      Rohr Industries, Inc., Directors Retirement Plan, as amended
             through the Seventh Amendment, incorporated herein by reference
          to Exhibits 10.1 through 10.7, as set forth in Form 10-K for
fiscal year ended July 31, 1994.                  

 10.2      Rohr Industries, Inc., Supplemental Retirement Plan (Restated
     1983), as amended through the Twenty-seventh Amendment,
         incorporated herein by reference to Exhibits 10.2.1 through
               10.2.27, as set forth in Form 10-K for fiscal year ended July 31,
1994.                                             

 10.2.28    Twenty-eighth Amendment to Rohr Industries, Inc., Supplemental
   Retirement Plan (Restated 1983), dated April 7, 1995,
             incorporated herein by reference to Exhibit 10.2.28, filed with
Form 10-K for fiscal year ended July 31, 1995.    

10.2.29    Twenty-ninth Amendment to Rohr Industries, Inc., Supplemental
   Retirement Plan (Restated 1983), dated April 7, 1995,
             incorporated herein by reference to Exhibit 10.2.29, filed with
Form 10-K for fiscal year ended July 31, 1995.    

10.2.30    Thirtieth Amendment to Rohr Industries, Inc., Supplemental   
   Retirement Plan (Restated 1983), dated July 24, 1995,
             incorporated herein by reference to Exhibit 10.2.30, filed with
Form 10-K for fiscal year ended July 31, 1995.    

*10.2.31   Thirty-First Amendment to Rohr, Inc. Supplemental Retirement 
Plan, dated September 13, 1996.                   

*10.2.32   Thirty-Second Amendment to Rohr, Inc. Supplemental Retirement
Plan, dated September 13, 1996.                   

  10.3      Rohr, Inc. 1991 Stock Compensation for Non-Employee Directors,
            incorporated by reference to Exhibit 10.5 filed with Form 10-K
for fiscal year ended July 31, 1992.              

     10.4      Rohr Industries, Inc., Management Incentive Plan (Restated 1982),
             as amended through the Fifteenth Amendment, incorporated herein
              by reference to Exhibits 10.4.1 through 10.4.15, as set forth in
Form 10-K for fiscal year ended July 31, 1994.    

*10.4.1    Sixteenth Amendment to Rohr, Inc. Management Incentive Plan  
(Restated 1982), dated June 7, 1996.              

*10.4.2    Seventeenth Amendment to Rohr Industries, Inc. Management    
       Incentive Plan (Restated 1982), dated September 13, 1996.

  10.5      Rohr Industries, Inc., 1988 Non-Employee Director Stock Option
           Plan, incorporated herein by reference to Exhibit 10.17 filed
 with Form 10-K for fiscal year ended July 31, 1989.

10.6      Performance Unit Plan as amended through January 7, 1993,   
           incorporated herein by reference to Exhibit 10.13, filed with
Form 10-Q for period ended May 2, 1993.           

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   10.7      Employment Agreement with Robert H. Rau, incorporated herein by
               reference to Exhibit 10.12, filed with Form 10-Q for period ended
May 2, 1993.                                      

*10.7.1    First Amendment to Employment Agreement with Robert H. Rau.  

   10.8      Employment Agreement with L. A. Chapman, incorporated herein by
              reference to Exhibit 10.12, filed with Form 10-K for fiscal year
ended July 31, 1994.                              

10.13     Credit Agreement, dated as of April 26, 1989, among Rohr    
               Industries, Inc., as Borrower, and Citibank, N. A., Bankers Trust
               Company, The First National Bank of Chicago and Wells Fargo Bank,
         N. A., and Citibank, N.A., as Agent, as amended through the
             Seventh Amendment, incorporated herein by reference to Exhibits
             10.13 through 10.13.7, as set forth in Form 10-K for the fiscal
year ended July 31, 1994.                         

  10.13.8   Eighth Amendment to Credit Agreement, dated as of November 29,
              1994, incorporated herein by reference to Exhibit 10.13.8, filed
 with Form 10-K for fiscal year ended July 31, 1995.

   10.13.9   Ninth Amendment to Credit Agreement, dated as of June 30, 1995,
             incorporated herein by reference to Exhibit 10.13.9, filed with
Form 10-K for fiscal year ended July 31, 1995.    

 10.13.10  Tenth Amendment to Credit Agreement, dated as of November 17,
               1995, incorporated herein by reference to Exhibit 10.13.10, filed
with Form 10-Q for period ended January 28, 1996. 

   10.13.11  Eleventh Amendment to Credit Agreement, dated as of January 15,
               1996, incorporated herein by reference to Exhibit 10.13.11, filed
with Form 10-Q for period ended January 28, 1996. 

    10.14     Lease Agreements, dated as of September 14, 1992, by and between
               Rohr, Inc., as lessor, and State Street Bank and Trust Company of
               California, National Association and W. Jeffrey Kramer, Trustees,
          as lessee, incorporated herein by reference to Exhibit 10.22
       filed with Form 10-K for fiscal year ended July 31, 1992.

10.15     Sublease Agreements, dated as of September 14, 1992, by and 
        between State Street Bank and Trust Company of California,
      National Association and W. Jeffrey Kramer, Trustees, as
               sublessor, and Rohr, Inc., as sublessee, as amended, supplemented
        and modified through July 31, 1994, incorporated herein by
               reference to Exhibits 10.15 through 10.15.5, as set forth in Form
10-K for the fiscal year ended July 31, 1994.     

10.15.6   Third Amendment Agreement, dated as of November 29, 1994, to
              Sublease Agreement, dated as of September 14, 1992, incorporated
              herein by reference to Exhibit 10.15.6, filed with Form 10-K for
fiscal year ended July 31, 1995.                  

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10.15.7   Fourth Amendment Agreement, dated as of June 30, 1995, to   
              Sublease Agreement, dated as of September 14, 1992, incorporated
              herein by reference to Exhibit 10.15.7, filed with Form 10-K for
fiscal year ended July 31, 1995.                  

10.15.8   Fifth Amendment Agreement, dated as of November 17, 1995, to
              Sublease Agreement, dated as of September 14, 1992, incorporated
              herein by reference to Exhibit 10.15.8, filed with Form 10-Q for
period ended January 28, 1996.                    

10.15.9   Sixth Amendment Agreement, dated as of January 19, 1996, to 
              Sublease Agreement, dated as of September 14, 1992, incorporated
              herein by reference to Exhibit 10.15.9, filed with Form 10-Q for
period ended January 28, 1996.                    

   10.16     Pooling and Servicing Agreement, dated as of December 23, 1992,
       among Rohr, Inc., RI Receivables, Inc., and Bankers Trust
           Company, as Trustee, as amended through the Second Amendment,
         incorporated herein by reference to Exhibits 10.16, through
          10.16.2, as set forth in Form 10-K for the fiscal year ended
July 31, 1994.                                    

  10.17     Receivables Purchase Agreement, dated as of December 23, 1992,
             among Rohr, Inc., and RI Receivables, Inc., incorporated herein
            by reference to Exhibit 10.11, filed with Form 10-Q for period
ended May 2, 1993.                                

*11.1      Calculation of Primary Earnings per Share.                   

*11.2      Calculation of Fully Diluted Earnings per Share.             

*13        Annual Report to Shareholders for fiscal year ended July 31, 
              1996.  (The Annual Report, except for the portions thereof which
          are expressly incorporated by reference in the Form 10-K, is
              being furnished for the information of the Commission and is not
to be deemed "filed" as part of the Form 10-K.)   

*23.       Consent of Deloitte & Touche.                                

*27.       Financial Data Schedule.  (Filed with EDGAR filing only.)    

(b) Reports on Form 8-K for Fourth Quarter of Fiscal 1996                   
-----------------------------------------------------               

 There were no reports on Form 8-K filed by the Company for the fourth
quarter of fiscal 1996.                                             

(c) Exhibits required by Item 601 of Regulation S-K                         
-----------------------------------------------                     

See Subparagraph (a) above.                                         

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(d)  Financial Statements required by Regulation S-X                            
-----------------------------------------------                       

See Subparagraph (a) and (b) above.                                   

---------------                                                                 
* Exhibits filed with this report.                                              

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of Rohr, Inc.:                       

We have audited the consolidated financial statements of Rohr, Inc.,  as of July
31, 1996 and 1995, and for each of the three years in the period ended July 31, 
1996, and have issued our report thereon dated September 11, 1996; such         
consolidated financial statements and report are included in your 1996 Annual   
Report to Shareholders and are incorporated herein by reference.  Our audits    
also included the financial statement schedule of Rohr, Inc., listed in Item    
14(a)(2).  This financial statement schedule is the responsibility of the       
Company's management.  Our responsibility is to express an opinion based on our 
audits.  In our opinion, such financial statement schedule, when considered in  
relation to the basic consolidated financial statements taken as a whole,       
presents fairly in all material respects the information set forth therein.     

Deloitte & Touche L L P                                                         

San Diego, California                                                           
September 11, 1996                                                              

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ROHR, INC., AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS 
FOR THE YEARS ENDED JULY 31, 1996, 1995, AND 1994 
(dollars in thousands)

                                                                [Download Table]


                                    Charged                Balance 
                        Balance at  to Costs                  at   
                         beginning    and      Accounts     end of 
                         of period  Expenses  written off   period 
                         ________   ________    _______    _______ 
                                                                   

Reserve for bad debts:                                             

          1996            $12,922   $   128      $   --     $13,050

          1995             21,422                 (8,500)    12,922

          1994             11,122    10,300          --      21,422


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the Registrant has duly caused this report to be signed on its     
behalf by the undersigned, thereunto duly authorized.                           

ROHR, INC.    
(Registrant)  

   By: /s/ R. H. Rau
       -------------
   R. H. Rau
                               President and Chief Executive Officer

       By: /s/ L. A. Chapman
           -----------------
       L. A. Chapman
                         Senior Vice President and Chief
           Financial Officer

      By: /s/ A. L. Majors
          ----------------
      A. L. Majors
                       Vice President and Controller
                    (Chief Accounting Officer)

Date:  September 11, 1996                                                       

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and  
in the capacities and on the dates indicated.                                   

                                                                [Download Table]


       Signature                    Title             Date        
--------------------               ---------    ------------------
                                                                  
/s/ W. Barnes                      Director     SEPTEMBER 11, 1996
-------------                                                     
W. Barnes                                                         

/s/ E. E. Covert                   Director     SEPTEMBER 11, 1996
----------------                                                  
E. E. Covert                                                      

/s/ S. F. Iacobellis               Director     SEPTEMBER 11, 1996
--------------------                                              
S. F. Iacobellis                                                  

/s/ V. N. Marafino                 Director     SEPTEMBER 11, 1996
------------------                                                
V. N. Marafino                                                    

/s/ D. Larry Moore                 Director     SEPTEMBER 11, 1996
------------------                                                
D. Larry Moore                                                    

/s/ R. M. Price                    Director     SEPTEMBER 11, 1996
---------------                                                   
R. M. Price                                                       

/s/ R. H. Rau                      Director     SEPTEMBER 11, 1996
-------------                                                     
R. H. Rau                                                         

/s/ W. P. Sommers                  Director     SEPTEMBER 11, 1996
-----------------                                                 
W. P. Sommers                                                     

/s/ J. D. Steele                   Director     SEPTEMBER 11, 1996
----------------                                                  
J. D. Steele                                                      

/s/ J. R. Wilson                   Director     SEPTEMBER 11, 1996
----------------                                                  
J. R. Wilson                                                      


28

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		12/15/01		22
		10/29/00		10
		6/25/00		10
		2/15/00		10
		1/29/00		22
		7/31/97		9					10-K,  10-K/A,  11-K
		4/25/97		19
		12/7/96		18					DEF 14A
Filed on:		9/24/96
		9/13/96		23
		9/11/96		1		30
For Period End:		7/31/96		1		28			11-K
		6/7/96		23
		1/28/96		22		25			10-Q
		1/19/96		25
		1/15/96		24
		1/1/96		22
		11/17/95		24		25
		7/31/95		9		28			10-K,  11-K
		7/24/95		23
		6/30/95		24		25
		4/7/95		23
		1/29/95		22					10-Q
		12/3/94		22					DEF 14A
		11/29/94		24
		7/31/94		21		28			10-K,  11-K
		7/14/94		16
		5/15/94		22
		5/1/94		22					10-Q
		4/11/94		14
		2/7/94		14
		11/30/93		14
		5/2/93		22		25
		3/11/93		15
		1/7/93		23
		12/23/92		25
		9/14/92		24		25
		7/31/92		23		24
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