NEWLY MERGED Lockheed Martin will decide by the end of June how and where to consolidate the former Lockheed and Martin Marietta operations. The company, with annual sales of around $23 billion and 170,000 staff, was formed on 15 March, after Lockheed and Martin Marietta shareholders voted for the merger.
Chairman Daniel Tellep says that Lockheed Martin expects significant cost savings to customers through consolidation and "the aggressive elimination of duplication". Integrated management and procedures are already in place and Lockheed Martin has begun operating immediately as one company, says President Norman Augustine.
Tellep, former Lockheed chairman, and Augustine, former Martin Marietta chief executive, describe the deal as "a merger of equals" and stress that senior management is drawn 50:50 from both firms. There are four sectors: Space and Strategic Missiles, Electronics, Aeronautics, and Information and Technology Services.
Eight consolidation options are being examined now that anti-trust barriers to sharing detailed financial information are down, says Tellep, emphasising that there would have been workforce reductions had the two companies continued as separate entities.
"We honestly do not yet know the impact [of the merger] on jobs. There will be downsizing...but the long-term goal is to create more jobs together than we would have done separately," Augustine says.
The merged company is diversified, with only 52% of its business tied to the US Department of Defense, Tellep says. Lockheed and Martin Marietta had similar strategies to leverage defence skills into technologically related commercial businesses, he says. Tellep highlights Lockheed's commercial-space business, which has built a backlog exceeding $1.5 billion in the two years since its creation.
The merger was approved by 98% of the shareholders of both companies, with Lockheed shareholders receiving 1.63 Lockheed Martin shares for each Lockheed share and Marietta shareholders receiving one for one.
Source: Flight International