Tim Ripley

Squeezing that extra pound, dollar or franc of profit from static or declining defence businesses is the new challenge for the aerospace industry, say senior Lockheed Martin executives at Farnborough.

With new aircraft projects thin on the ground and the pool of potential merger partners getting smaller, aerospace companies are looking to reduce their internal costs to stretch profits or make the jump into new emerging technologies.

Lockheed Martin in the 21st Century, or LM21, is the US giant's project to "-identify and migrate best practice throughout the business," says Pete Teets, president and chief operating officer.

In the company's Aeronautics Sector 'lean' production is the watch word of Micky Blackwell, who has declared war on waste. Company-wide, information technology has been revamped to save on time and money.

"These savings will not come free; they take some investment and we propose to make it for the large savings at the end of the rainbow."

Teets says Lockheed Martin has also created a new revenue stream to maintain and boost the company's annual $28 billion revenue by moving into new high growth markets.

He says the company hopes to generate $1 billion a year by 2000 from its new Global Telecommunications venture, combining satellite and commercial communications businesses to provide high band width data links.

This is aimed primarily at business users rather than heralding the entry of Lockheed Martin into the mobile phone market.

There is unlikely to be a major rise in defence spending in the near future, says Teets. "We are close to the bottom of the defence spending cycle in the US, but it is difficult to see an increase in defence spending.

"As a business we are not counting on it. It is too soon to see new aircraft programmes beyond the Joint Strike Fighter and F-22 Raptor - we have our plate full right now."

Source: Flight Daily News