Lockheed Martin | Wikipedia audio article
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Lockheed Martin | Wikipedia audio article

August 16, 2019


Lockheed Martin Corporation is an American
global aerospace, defense, security and advanced technologies company with worldwide interests. It was formed by the merger of Lockheed Corporation
with Martin Marietta in March 1995. It is headquartered in North Bethesda, Maryland,
in the Washington, DC, area. Lockheed Martin employs approximately 100,000
people worldwide as of December 2017.Lockheed Martin is one of the largest companies in
the aerospace, defense, security, and technologies industry. It is the world’s largest defense contractor
based on revenue for fiscal year 2014. In 2013, 78% of Lockheed Martin’s revenues
came from military sales; it topped the list of US federal government contractors and received
nearly 10% of the funds paid out by the Pentagon. In 2009 US government contracts accounted
for $38.4 billion (85%), foreign government contracts $5.8 billion (13%), and commercial
and other contracts for $900 million (2%).Lockheed Martin operates in four business segments:
Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space Systems. The company has received the Collier Trophy
six times, including in 2001 for being part of developing the X-35/F-35B LiftFan Propulsion
System, and most recently in 2006 for leading the team that developed the F-22 Raptor fighter
jet. Lockheed Martin is currently developing the
F-35 Lightning II and leads the international supply chain, leads the team for the development
and implementation of technology solutions for the new USAF Space Fence (AFSSS replacement),
and is the primary contractor for the development of the Orion command module. The company also invests in healthcare systems,
renewable energy systems, intelligent energy distribution and compact nuclear fusion.==History=====1990s===
Merger talks between Lockheed Corporation and Martin Marietta began in March 1994, with
the companies announcing their $10 billion planned merger on August 30, 1994. The headquarters for the combined companies
would be at Martin Marietta headquarters in North Bethesda, Maryland. The deal was finalized on March 15, 1995,
when the two companies’ shareholders approved the merger. The segments of the two companies not retained
by the new company formed the basis for the present L-3 Communications, a mid-size defense
contractor in its own right. Lockheed Martin also later spun off the materials
company Martin Marietta Materials. Both companies contributed important products
to the new portfolio. Lockheed products included the Trident missile,
P-3 Orion maritime patrol aircraft, U-2 and SR-71 reconnaissance airplanes, F-117 Stealth
Nighthawk, F-16 Fighting Falcon, F-22 Raptor, C-130 Hercules, A-4AR Fightinghawk and the
DSCS-3 satellite. Martin Marietta products included Titan rockets,
Sandia National Laboratories (management contract acquired in 1993), Space Shuttle External
Tank, Viking 1 and Viking 2 landers, the Transfer Orbit Stage (under subcontract to Orbital
Sciences Corporation) and various satellite models. On April 22, 1996, Lockheed Martin completed
the acquisition of Loral Corporation’s defense electronics and system integration businesses
for $9.1 billion, the deal having been announced in January. The remainder of Loral became Loral Space
& Communications. Lockheed Martin abandoned plans for a $8.3
billion merger with Northrop Grumman on July 16, 1998, due to government concerns over
the potential strength of the new group; Lockheed/Northrop would have had control of 25% of the Department
of Defense’s procurement budget.For the Mars Climate Orbiter, Lockheed Martin incorrectly
provided NASA with software using measurements in US Customary force units when metric was
expected; this resulted in the loss of the Orbiter at a cost of $125 million. The development of the spacecraft cost $193.1
million.In addition to their military products, in the 1990s Lockheed Martin developed the
texture mapping chip for the Sega Model 2 arcade system board and the entire graphics
system for the Sega Model 3, which were used to power some of the most popular arcade games
of the time.===2000s===In May 2001, Lockheed Martin sold Lockheed
Martin Control Systems to BAE Systems. On November 27, 2000, Lockheed completed the
sale of its Aerospace Electronic Systems business to BAE Systems for $1.67 billion, a deal announced
in July 2000. This group encompassed Sanders Associates,
Fairchild Systems, and Lockheed Martin Space Electronics & Communications. In 2001, Lockheed Martin won the contract
to build the F-35 Lightning II; this was the largest fighter aircraft procurement project
since the F-16, with an initial order of 3,000 aircraft. In 2001, Lockheed Martin settled a nine–year
investigation conducted by NASA’s Office of Inspector General with the assistance of the
Defense Contract Audit Agency. The company paid the United States government
$7.1 million based on allegations that its predecessor, Lockheed Engineering Science
Corporation, submitted false lease costs claims to NASA.On May 12, 2006, The Washington Post
reported that when Robert Stevens took control of Lockheed Martin in 2004, he faced the dilemma
that within 10 years, 100,000 of the about 130,000 Lockheed Martin employees – more
than three-quarters – would be retiring. On August 31, 2006, Lockheed Martin won a
$3.9 billion contract from NASA to design and build the CEV capsule, later named Orion
for the Ares I rocket in the Constellation Program. In 2009, NASA reduced the capsule crew requirements
from the initial six seats to four for transport to the International Space Station.On August
13, 2008, Lockheed Martin acquired the government business unit of Nantero, Inc., a company
that had developed methods and processes for incorporating carbon nanotubes in next-generation
electronic devices. In 2009, Lockheed Martin bought Unitech.===2010s===
On November 18, 2010, Lockheed Martin announced that it would be closing its Eagan, Minnesota
location by 2013 to reduce costs and optimize capacity at its locations nationwide. In January 2011, Lockheed Martin agreed to
pay the US Government $2 million to settle allegations that the company submitted false
claims on a U.S. government contract for that amount. The allegations came from a contract with
the Naval Oceanographic Office Major Shared Resource Center in Mississippi. On May 25, 2011 Lockheed Martin bought the
first Quantum Computing System from D-Wave Systems. Lockheed Martin and D-Wave will collaborate
to realize the benefits of a computing platform based upon a quantum annealing processor,
as applied to some of Lockheed Martin’s most challenging computation problems. Lockheed Martin established a multi-year contract
that includes one system, maintenance and services. Potentially an important milestone for both
companies.On May 28, 2011 it was reported that a cyberattack using previously stolen
EMC files had broken through to sensitive materials at the contractor. It is unclear if the Lockheed incident is
the specific prompt whereby on June 1, 2011, the new United States military strategy, makes
explicit that a cyberattack is casus belli for a traditional act of war.On July 10, 2012,
Lockheed Martin announced it was cutting its workforce by 740 workers to reduce costs and
remain competitive as necessary for future growth. On August 2, 2012, the Vice President for
Business Development, George Standridge stated that his company has offered 6 more C-130J
aircraft to the Indian Air Force, for which discussions are underway with the Indian Government. On November 27, 2012, Lockheed Martin announced
that Marillyn Hewson will become the corporation’s chief executive officer on January 1, 2013.On
January 7, 2013, Lockheed Martin Canada announced that it will be acquiring the engine maintenance,
repair and overhaul assets from Aveos Fleet Performance in Montreal, Quebec, Canada. On July 3, 2013, Lockheed Martin announced
that it was partnering with DreamHammer to use the company’s software for integrated
command and control of its unmanned aerial vehicles. Lockheed Martin teamed up with Bell Helicopter
to propose the V-280 Valor tiltrotor for the Future Vertical Lift (FVL) program. In September 2013, Lockheed Martin acquired
the Scotland-based tech firm, Amor Group, saying the deal would aid its plans to expand
internationally and into non-defence markets. On November 14, 2013, Lockheed announced they
would be closing their Akron, Ohio facility laying off 500 employees and transferring
other employees to other locations. In March 2014, Lockheed Martin acquired Beontra
AG, a provider of integrated planning and demand forecasting tools for airport, planning
to expand their business in commercial airport information technology solutions. Also in March 2014, Lockheed Martin announced
its acquisition of Industrial Defender Inc. On June 2, 2014, Lockheed Martin received
a Pentagon contract to build a space fence that would track debris, keeping it from damaging
satellites and spacecrafts. In September 2014, Lockheed agreed a deal
to sell 40 F-35 fighters to South Korea for delivery between 2018 and 2021, for a fee
in the range of $7.06 billion.On July 20, 2015, Lockheed Martin announced plans to purchase
Sikorsky Aircraft from United Technologies Corporation at a cost of $7.1 billion. The Pentagon has criticized the acquisition
as causing a reduction in competition. In November 2015, the acquisition received
final approval from the Chinese government, with a total cost of $9 billion. Dan Schulz was named the president of Lockheed
Martin’s Sikorsky company. Lockheed Martin has shown sketches for a twin-engine,
blended wing body strategic airlifter similar in size to the C-5. On March 31, 2015, the US Navy awarded Lockheed
Martin a contract worth $362 million for construction of Freedom-class ship LCS 21 and $79 million
for advanced procurement for LCS 23. The Freedom-class ships are built by Fincantieri
Marinette Marine in Marinette, Wisconsin. In December 2015, Lockheed won a $867 million
seven-year contract to train Australia’s next generation of military pilots. There is also an option in the deal to extend
this contract across 26 years which would greatly increase the deal’s value.In August
2016, Canadian Forces Maritime tested an integrated submarine combat system developed by Lockheed
Martin. The test marked Canada’s first use of the
combat system with the MK 48 heavyweight torpedo, variant 7AT.In May 2017, during a visit to
Saudi Arabia by President Donald Trump, Saudi Arabia signed business deals worth tens of
billions of dollars with U.S. companies, including Lockheed Martin. (See: 2017 United States–Saudi Arabia arms
deal) On November 29, 2018, Lockheed Martin was
awarded a Commercial Lunar Payload Services contract by NASA, which makes it eligible
to bid on delivering science and technology payloads to the Moon for NASA, worth $2.6
billion. Lockheed Martin plans to formally propose
a lander called McCandless Lunar Lander, named after the late astronaut and former Lockheed
Martin employee Bruce McCandless II, who in 1984 performed the first free-flying spacewalk
without a lifeline to the orbiting shuttle, using a jetpack built by the company. This lander would be based on the successful
design of the Phoenix and InSight Mars landers.==Finances==
For the fiscal year 2017, Lockheed Martin reported earnings of US$2.002 billion, with
an annual revenue of US$51.048 billion, an increase of 8.0% over the previous fiscal
cycle. Lockheed Martin’s shares traded at over $280
per share, and its market capitalization was valued at over US$86.8 billion in September
2018. Lockheed Martin ranked No. 59 in the 2018
Fortune 500 list of the largest United States corporations by total revenue.==Government contracts==
Lockheed Martin received $36 billion in government contracts in 2008 alone, more than any company
in history. It does work for more than two dozen government
agencies from the Department of Defense and the Department of Energy to the Department
of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information
processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security
Agency (NSA), The Pentagon, the Census Bureau and the Postal Service.In October 2013, Lockheed
announced it expected to finalise a $2.2 billion contract with the United States Air Force
for two advanced military communications satellites.Lockheed Martin has already begun to help the military
transition to renewable energy sources with solar photovoltaic powered microgrids and
as the military aims to reach 25% renewable energy by 2025 in order to improve national
security.==Corruption investigations==
On March 3, 2012, the U.S. Justice Department said that Lockheed Martin had agreed to settle
allegations that the defense contractor had sold overpriced perishable tools used on many
contracts. The DoJ said the allegations were based specifically
on the subsidiary Tools & Metals Inc’s inflation of costs between 1998 and 2005, which Lockheed
Martin then passed on to the U.S. government under its contracts. Further, in March 2006, Todd B. Loftis, a
former TMI president, was sentenced to 87 months in prison and ordered to pay a fine
of $20 million following his guilty plea.On February 20, 2013, Lockheed Martin Corp complied
with the U.S. District Court in New York, agreeing to pay a $19.5 million lawsuit to
conclude a securities fraud class-action legal battle that had accused the company of deceiving
shareholders in regards to expectations for the company’s information technology division.On
December 20, 2014, Lockheed Martin Integrated Systems agreed to settle a False Claims Act
lawsuit paying $27.5 million to finalize allegations that it had knowingly overbilled the taxpayer
for work performed by company staff who did not hold the relevant, essential qualifications
for the contract.==Organization=====Advanced design and development division
===Skunk Works===
Aeronautics===Lockheed Martin Aeronautics===
Missiles and Fire Control===Lockheed Martin Missiles and Fire Control===Rotary and Mission Systems===
Lockheed Martin Rotary and Mission Systems (formerly Mission Systems and Sensors, and
then Mission Systems & Training) Sikorsky Aircraft===
Space===Lockheed Martin Space Systems===Others===
Lockheed Martin Canada Lockheed Martin Australia
Lockheed Martin Advanced Technology Laboratories LMC Properties
Lockheed Martin Enterprise Business Services Lockheed Martin Finance Corporation
Lockheed Martin U.K. SIM Industries – a Lockheed Martin company===Joint ventures===
International Launch Services (with Khrunichev, RSC Energia)
Lockheed Martin Alenia Tactical Transport Systems (with Alenia Aeronautica), now folded
MEADS International (with EADS and MBDA) Space Imaging (46%, remainder public)
United Launch Alliance (with Boeing) Javelin Joint Venture (with Raytheon)
Longbow LLC (with Northrop Grumman) United Space Alliance (with Boeing)
Kelly Aviation Center (with GE and Rolls-Royce) Protector USV – an unmanned surface vehicle
(with Rafael Advanced Defense Systems and BAE Systems)
Defense Support Services (DS2) with Day & Zimmermann Tata Lockheed Martin Aerostructures Limited
(with Indian company Tata Advanced Systems Limited)
Advanced Military Maintenance Repair and Overhaul Center (AMMROC) (with Mubadala Development
Company)===Divested===
PAE (Pacific Architects and Engineers) Holding, Inc==Corporate governance=====
Board of directors===The board of directors consists of 14 members. As of February 2016, members include:
Daniel Akerson (since 2014) Nolan Archibald (since 2002)
Rosalind Brewer (since 2011) David Burritt (since 2008)
Bruce Carlson (since 2015) James Ellis (since 2004)
Thomas Falk (since 2010) Marilyn Hewson
Gwendolyn King (since 1995) James Loy (since 2005)
Joseph Ralston (since 2003) Anne Stevens (since 2002)===Chief executive officer===
Norman Augustine (1995–1997) Vance Coffman (1997–2004)
Robert J. Stevens (2004–2012) Marillyn Hewson (2013–)===Chairman of the board===
Robert J. Stevens (2005–2013) Marillyn Hewson (2014–)===Ownership===
As of 2017 Lockheed Martin shares are mainly held by institutional investors (State Street
Corporation, Capital Group Companies, Vanguard group, BlackRock, and others)===Criticism===
Lockheed Martin is listed as the largest U.S. government contractor and “ranks third for
number of incidents, and twenty-first for size of settlements on the ‘contractor misconduct’
database maintained by the Project on Government Oversight, a Washington, D.C.-based watchdog
group.” Since 1995, the company has agreed to pay
$606 million to settle 59 instances of misconduct.In 2013, Lt. Gen. Christopher Bogdan criticized
the company’s F-35 fighter program. The general said: “I want them both to start
behaving like they want to be around for 40 years…I want them to take on some of the
risk of this program. I want them to invest in cost reductions. I want them to do the things that will build
a better relationship. I’m not getting all that love yet.” The criticism comes in the wake of previous
criticism from former Defense Secretary Robert Gates regarding the same program.===Lobbying===
According to the magazine Politico, Lockheed Martin has “a political network that is already
the envy of its competitors”, and its contracts enjoy wide bipartisan support in the U.S.
Congress thanks to it having “perfected the strategy of spreading jobs on weapons programs
in key states and congressional districts”. The company’s 2010 lobbying expenditure by
the third quarter was $9.9 million (2009 total: $13.7 million).Through its political action
committee (PAC), the company provides low levels of financial support to candidates
who advocate national defense and relevant business issues. It is “the top contributor to the incoming
House Armed Services Committee chairman, Republican Buck McKeon of California, giving more than
$50,000 in the most recent election cycle. It also topped the list of donors to Sen.
Daniel Inouye (D-HI), the chair of the Senate Appropriations Committee before his death
in 2012.”Lockheed Martin Employees Political Action Committee is one of the 50 largest
in the country, according to FEC data. With contributions from 3,000 employees, it
donates $500,000 a year to about 260 House and Senate candidates. For the 2004 election cycle, Lockheed’s PAC
contributed $350,279 to federal candidates, with about 62 percent going to Republicans,
according to the Center for Responsive Politics. That compares with $515,000 from General Dynamics’
political action committee and $122,850 from BAE Systems North America, the center’s data
showed.==Management==
Senior management consists of the CEO, COO and CFO, and Executive Vice Presidents (EVP)
of five business areas. The EVPs are responsible for managing major
programs. Employees in each program are organized into
four tiers: Tier1 –Program Manager/VP, Tier2-Functional Teams (Finance, Chief Engineer, Quality, Operations,
etc.), Tier3-Integrated Product Teams (IPTs) (Weapon System Development, Weapon System
Integration, etc.), and Tier4-detailed product development. Floor or touch workers belong to component
assembly teams. Lockheed Martin manages and maintains its
relationship with these touch workers through its supervisors and unions.Lockheed Martin
manages employees through its Full Spectrum Leadership and LM21 programs. The LM21 program relies on Six Sigma principles,
which are techniques to improve efficiency. Senior management constructs leadership councils
and assigns managers to facilitate Kaizen events, which target specific processes for
improvement. A manager facilitates teams and processes
stakeholders and suppliers to streamline process implementation.Tier2 Functional Leads and
Tier3 IPT Leads report to Tier1. IPT leads are responsible for entire systems
or products defined by the contract’s Statement of Work.To control quality, Lockheed Martin
trains and builds IPT teams. and ensures that work is executed correctly
through a Technical Performance Measure (TPM) system which emphasizes its Lean and 6 Sigma
processes. Middle management uses commitment mechanisms
that parallel high commitment and human relations theory.Floor employees assemble aircraft using
Flow-to-takt lean manufacturing process which uses properties from both division of labor
and scientific management. By separating tasks based on parts, Lockheed
Martin utilizes the division of labor theory, specialization on a specific area creates
efficiency.===Double Helix methodology===
The “Double Helix methodology” is a systems development methodology used by Lockheed Martin. It combines experimentation, technology, and
a warfighter’s concept of operations to create new tactics and weapons.==Controversy==
In August, 2018, a laser-guided Mark 82 bomb sold by the US and built by Lockheed Martin
was used in the Saudi-led coalition airstrike on a school bus in Yemen, which killed 51
people, including 40 children.==See also==Defense contractor – table of comparable
companies Lockheed Martin Maintenance Trophy
Top 100 US Federal Contractors – $38.5 billion in FY09

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