Can you make those margins stick?
I think we can. We have four businesses, and going back 10-12 years, we've tailored a strategy for each one. There was a 3-5-year run where information technology was a white-hot market growing at double digits, and now it is not. Our aeronautics business wasn't growing because the F-16 was declining, but now the F-35 is going to ramp up. Missile defense is growing. International used to be 13% [of sales] a couple of years back and now we're at 17% and we want to be at 20%. When you look at what threats are out there and what capabilities are needed—missile defense, situational awareness, cargo aircraft, tactical fighter aircraft—our portfolio differentiates us. I look at our portfolio in totality. The individual pieces will be up and down.
Many of our readers may point out that the Joint Strike Fighter is costing much more than originally projected and is behind schedule. How does that square with your affordability imperative?
This is a big, complicated program, with the U.S. Navy, Marines and Air Force, all the international customers, our suppliers and teammates. By all accounts, people have seen an improvement since we did a rebaselining in 2010. We've exceeded our flight-test schedule. We are doing the best we can to manage the underlying infrastructure and the cost it takes to build the aircraft.
I get a report every night between 10 and 11 p.m. that gives me the status of the program, relative to flight test, test points and other challenges. Probably the last thing I do every night before I go to bed is read my F-35 report. Most nights I go to sleep [immediately afterward]. Occasionally, I make a few phone calls first. We watch this seven days a week. There is not a person in this company that is not aware of the importance of this program.
In hindsight, is it possible that Lockheed Martin came in with too low a bid, given the complexity of the program and the customers' expectations?
I don't see that. Like every program, there have been changes in funding and requirements, and you discover things as you're pushing the envelope and the state of the art. The volume of any product is going to drive the cost down more than any single cost-reduction initiative. That's why I've been so focused on international [sales]. That's the key that is going to make a big difference.
Lockheed Martin is on the hook to deliver the JSF low-rate initial production III and IV aircraft by the end of the year. Will you meet that deadline?
It's close. We experienced a 10-week strike in Fort Worth that just ended a month ago, and that could drive some challenges as to whether some aircraft get delivered late this year or early in 2013. We're in dialogue with our customer, and they know the challenges.