Lockheed CEO Says Talks With Trump Administration Are ‘Constructive’

March 21, 2017, 11:47 PM UTC
A Lockheed Martin Corp. F-35A jet flies during a training mission in Hill Air Force Base, Utah, U.S., on Friday, Oct. 21, 2016.
George Frey—Bloomberg/Getty Images
George Frey—Bloomberg/Getty Images

Lockheed Martin’s chief executive said on Tuesday she is “more optimistic than ever” about growth prospects because refocusing the company on its core defense business has helped make weaponry more affordable for cost-conscious governments, including the Trump administration.

The F-35 jet fighter, Lockheed’s largest program, which constitutes 20% of the company’s revenue, has drawn fire from U.S. President Donald Trump, who made lowering prices for military equipment a pillar of his transition into office.

CEO Marillyn Hewson told reporters that Lockheed’s sale of its services business and purchase of helicopter maker Sikorsky from United Technologies helped reshape the company. Its growth will now come, she said, through a combination of core defense products like the F-35, continued high demand from international customers and innovations in next-generation weapons including lasers.

Lockheed sold the bulk of its government services businesses last year to Leidos Holdings.

Hewson said Lockheed has held “constructive dialogs over the past few months” with the Trump administration, which has driven home the point that the U.S. government is a “smart buyer” focused on value.

“Lockheed Martin is fully aligned with this effort,” she said, adding, “nowhere has this commitment to affordability been more visible than on the F-35 program.”

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She made the remarks at the company’s media day in Arlington, Va.

The stealthy F-35 Joint Strike Fighter costs $95 million to $123 million per plane, depending on the model. Despite $728 million in savings after Trump complained about its “tremendous cost and cost overruns,” it remains the most expensive weapons system ever built.

Lockheed and its suppliers have been working to reduce the cost of the jet through creating a more efficient supply chain for components.

Hewson said the F-35 will also be “the largest driver” of Lockheed’s international growth. She expects that 50 percent of F-35 orders will come from international customers in the next five years.

Lockheed has previously said it is aiming for 30 percent of total sales to come from international customers in the next few years.

Hewson said other growth drivers for Lockheed include ongoing programs to develop lasers and other weapons that use directed energy to destroy a target.

In 2016, Lockheed invested $988 million to research and develop new technologies including directed energy, autonomy, hypersonics and advanced materials.

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