Decreases in federal spending are prompting Lockheed Martin Corp. to close and consolidate several U.S. manufacturing plants, and reduce its workforce by 4,000. The aerospace and defense OEM said it aims to increase the efficiency of its operations and improve the affordability of its products and services.
Lockheed made clear the actions are a response to continued decreases in U.S. government spending. The “sequestration” policy that went into effect March 1 – across-the-board spending cuts to all federal military (8%) and domestic programs (5%) — has had a pronounced effect on military contractors like Lockheed.
However, Lockheed also noted the downsizing follows a strategic review of its capacity and future workload projections, and are part of a “continuing affordability initiative.”
The new cuts will impact four of its five business units, but do not include one of its highest-profile production programs, the F-35 Lightning II stealth fighter jet.
By mid-2015, Lockheed plans to close the Newtown, Pa. Space Systems operation; the Akron, Ohio, Mission Systems and Training operation; the Goodyear, Ariz., Information Systems & Global Solutions operation; and the Horizon City, Tex., Missiles and Fire Control operation. Most of the functions of these operations will be shifted to other Lockheed locations.
Lockheed also will close four buildings at its Sunnyvale, Calif., Space Systems campus. These closings will eliminate 2,000 positions.
“Operational efficiency initiatives” in Lockheed’s Information Systems & Global Solutions (IS&GS), Mission System and Training (MST), and Space Systems business areas will result in a further 2,000 job reductions by the end of 2014.
"Reducing our workforce of dedicated employees and closing facilities are among the most difficult decisions we make," stated CEO and president Marillyn Hewson.
"In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business and will position Lockheed Martin to better serve our customers," she concluded.