Just over three decades ago, a young industrial engineer walked into a factory in Marietta, Georgia, for a job interview.
“What really seized my imagination was going out onto the shop floor and seeing a huge line of C-130 aircraft,” says Marillyn Hewson. “Back then, we were starting up a new programme, and it seemed to me like an exciting environment.”
The firm to which Hewson had applied for work was no ordinary one. Lockheed Corporation (as it was then) was America’s largest defence contractor. Its scientists had already come up with impressive feats of aeronautical engineering, including the U-2 spy plane and the Hercules C-130, both of which are still in operation today, more than half a century since they first flew. Lockheed had also developed the SR-71 Blackbird – the first ‘stealth’ jet - which still holds the record for the planet’s fastest aircraft (Mach 3.3, or 3,529 km/h), a marker that it laid down in 1976.
As it turned out, of course, Hewson was no ordinary interviewee either. During her 31-year career at what is now Lockheed Martin, she has served in four of the manufacturing giant’s five main business areas (including aeronautics, systems integration and electronic systems). At the beginning of January 2013, she took over as Lockheed Martin’s president and chief executive officer, and was additionally appointed chairman at the beginning of this year. But while Forbes magazine may have rated her the 36th most powerful woman in the world, she is both warm and candid in person.
Although the company has changed a great deal during her career – not least as a result of the merger between Lockheed and Martin Marietta in 1995 - the essentials remain the same. It is now the world’s largest defence equipment seller, with a market cap of just over $50bn. It still sells more of its kit to the Pentagon than any other contractor (around 60 percent of its sales come from the Department of Defense), making it a crucial partner to the US armed forces. And it is still churning out some extraordinarily complex military platforms, like the F-35 Lightning II, America’s latest next-generation fighter, which will cost more than $1 trillion to develop and operate over its lifecycle.
But Hewson has also taken over at a particularly difficult time for the US defence industry. With the conclusion of two lengthy wars overseas, plus tough economic times at home, the Pentagon is slicing its budget to the tune of $75bn over the next two years. Secretary of Defense Chuck Hagel has warned that the cuts mean that the US army will be reduced to its smallest size since the end of World War II. Needless to say, Hewson argues the effects of these short-term cuts could prove critical to America’s long-term military future.
“We have to be careful when we are in a down cycle in the defence industry not to eat our seed corn, so to speak,” she says. “The US government and others have got to continue to invest in that technology because if you get a gap there, you can’t get it back, it’s very difficult.”
“The difference between today and what we saw back in the early 1980s with the peace dividend, and coming off the last drawdown is that we’d had the Reagan build-up and we had just recapitalised so we didn’t have this situation.
“Now, you have all these platforms that are just worn out from 12 years of war – aircraft, trucks and all that stuff, and frankly we need to recapitalise those and invest in technology so we can continue on that path despite the fact that the base is coming down and you’re not going to have the same growth.”
Lockheed Martin has spent the last few years preparing itself for leaner times. From an employee base of 146,000 in 2009, that number has now come down to 115,000. It has shrunk its footprint by 2.7 million square feet, and Hewson says that other facilities are also on the chopping block, to the tune of “probably another 1.5 million square feet in the near term”. She also points out that while there may be more redundancies as a result of a recent announcement to close three more facilities, and due to the cyclical nature of the project cycle, the large-scale cutbacks may be a thing of the past.
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