Maintaining a focus on the F-35 Joint Strike Fighter program, continuing to emphasize international growth and helping the company’s customers avoid drastic budget cuts and cope with fiscal pressures amid an increasingly complex global security environment headline the top priorities for Lockheed Martin’s [LMT] next CEO.
Speaking with investors on Monday, Marillyn Hewson said that the F-35 is the “number one priority for us as a corporation,” as it continues the development of the program while also delivering the next-generation multi-role fighter to its customers.
The F-35, along with air and missile defense programs, and the company’s other fighter jet and air transport programs are all key parts of its international growth strategy, Hewson said.
Hewson, who on Friday was immediately tapped to be Lockheed Martin’s president and chief operating officer (COO) as well as CEO-in-waiting, said she has been diving deeper into the F-35 program the past eight months as part of a leadership transition that was announced earlier this year with the pending retirement of Bob Stevens as the company’s CEO in January 2013. Hewson, who runs the company’s largest operating segment, Electronic Systems, had been in line to become president and COO in January 2013, taking over for Chris Kubasik, who had been expected to become CEO of Lockheed Martin until he resigned last week after an investigation discovered that he had been having an inappropriate personal relationship with a subordinate employee that violated the company’s ethics rules.
Stevens said that Hewson has been meeting with the company’s Aeronautics segment team over the past nine months and becoming more familiar with the F-35 and other programs in the segment’s portfolio. Hewson said that she has become involved in the company’s negotiations with its DoD customer on F-35 low-rate production contracts.
Following Kubasik’s sudden departure last Friday, Stevens said that Lockheed Martin’s leadership was in contact with its DoD customers and that the response has been that they understand the situation and support Hewson’s rise to CEO but don’t want the company to lose focus on its commitments to the F-35 and other programs.
Hewson pointed out that the Electronic Systems segment is a key supplier to the F-35 program so the program itself isn’t new to her. Electronic Systems is providing the electro-optic targeting system, integrated core processor, logistics systems and related training to the F-35.
“We won’t miss a beat,” on the F-35 program, Hewson said.
Hewson also mentioned several other priorities for her, including working with Congress to help avoid sequestration and to help its customers meet their affordability challenges amid a more constrained fiscal environment while at the same time global security challenges continue to grow. Other priorities include the company’s focus on cyber security and energy-related business, its satellite programs and NASA’s replacement for the Space Shuttle, she said.
While Hewson had been preparing to become COO and focus on Lockheed Martin’s day-to-day operations, she said that the move to CEO will mean that instead of being as internally focused on operational activities, she will be more focused on strategy, customer relations, relations with other stakeholders, policy matters and continuing to develop talent within the company.
Stevens will remain with Lockheed Martin as executive vice chairman of its board all of 2013, working with Hewson and the rest of the company’s leadership team to effect a smooth transition. Stevens said the board wants him to assure “ continuity in the strategic, operational and financial dimensions of our business,” adding that he is available to help the company in “any role to ensure a successful transition.”
On policy matters, Stevens noted that he and Hewson will be visiting with the new Congress next year. In addition, together they will address the potential budget sequestration that is pending, as well as budget formation, figure out how the company can help its customers and evolve its technology and strategic capabilities.
“So it will be very carefully choreographed,” he said.