Lockheed Closing Facilities, Cutting 4,000 Jobs

By Jefferson Morris jeff.morris@aviationweek.com
Source: AWIN First
November 14, 2013
Credit: Lockheed Martin

Lockheed Martin is closing and consolidating several U.S. facilities and laying off 4,000 employees in what the company calls an effort “to increase the efficiency of its operations and improve the affordability of its products and services” in light of continued reductions in U.S. government spending.

The cuts will leave the company with 112,000 employees. The company’s workforce has been reduced 23% since 2008, when it employed 146,000.

Lockheed Martin plans to close its operations in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; and Horizon City, Texas; along with four buildings on its Sunnyvale, Calif., campus, by mid-2015. The closures will cut 2,000 jobs, with another 2,000 to be culled from the Information Systems & Global Solutions, Mission System and Training, and Space Systems divisions by the end of 2014.

“For the past several years we have taken proactive actions to address our customers’ challenges and remain competitive in the marketplace,” President and CEO Marillyn Hewson says in a memo to employees. “While we have made significant progress, there is more work we must do to help our customers achieve their missions and prepare for the continued reductions in U.S. government spending.”

With these new cuts, Lockheed Martin continues to be “one step ahead of the DOD budget, which has seen the base budget in actual terms decline by 17% since FY09,” Sterne Agee analyst Peter Arment says. “The additional cost cuts at [the company] should aid stable margin performance during this period of weak domestic volumes through 2015.”

Lockheed expects net sales to decline slightly in 2014, but operating margins to remain above 11.5%, Arment says. “If sequestration does not get modified in 2014 the modernization (procurement and RDT&E) budget will come under much steeper pressure in 2015 which could cause further cuts in [Lockheed Martin] and industry-wide employment levels.”

The Newtown facility will transfer most of its commercial and military satellite work to Lockheed’s facilities in Denver in a “phased process” expected to take 12-18 months. All manufacturing, assembly and test operations should be fully up and running in the new location by the end of 2015.

The building closures at the company’s Space Systems facilities in Sunnyvale will result in the loss of 200 jobs and the removal of 600,000 sq. ft. of facility space.

Work at the company’s Akron site may be transitioned to Owego, N.Y., or Orlando, Fla. All Akron facilities will be closed by early 2015 except for the Akron Air Dock.


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