Lockheed to cut 4,000 jobs

Lockheed Martin Corp, the world's largest defence contractor, said on Thursday it plans to slash 4,000 jobs and shutter plants in several states to reduce costs in the face of declining US defence spending. The Bethesda, Maryland, weapons maker will close the affected facilities by mid-2015 to achieve job cuts that amount to more than 3 percent of its global workforce.
"Our customers face an increasingly complex global security environment with rapidly shrinking budgets," Lockheed chief executive officer Marilyn Hewson said in a memo to employees entitled "Making Difficult Decisions to Secure Our Future." The plants being closed include operations in Akron, Ohio, that make parts for radar and surveillance systems; Newtown, Pennsylvania, which makes communications satellites; Goodyear, Arizona, which handles software development for sensors; and Horizon City, Texas, which performs final assembly of missiles.
The company said four buildings at its Sunnyvale, California, space systems operation will also be shut. The plant closures will eliminate 2,000 positions, Lockheed said, while "operational efficiency initiatives" will pare another 2,000 in the information systems and global solutions, mission system and training and space systems business segments by the end of 2014.
Certain work will be relocated to other Lockheed facilities such as Denver and Valley Forge, Pennsylvania. A number of defence companies have shed non-core divisions, consolidated facilities and cut jobs in recent years to cope with revenue declines as the United States, the world's largest weapons buyer, pares its military budget.
The Pentagon, Lockheed's biggest customer, is bracing for one trillion dollars in spending cuts over the next decade as part of the 2011 Budget Control Act and the US sequestration process. Last month, Britain's BAE Systems said it would close a Texas facility that builds combat vehicles and cut more than 300 jobs. "As sequestration goes forward in 2014, we do expect to see more layoff announcements, more consolidation as companies at the top of the supply chain are forced to restructure their business," said Dan Stohr, spokesman for the Aerospace Industries Association, an industry lobbying group.
Lockheed, which builds F-35 fighter jets, satellites, missile defence equipment and warships, among other things, said last month that uncertainty about future US budgets was limiting its ability to make needed investments. The downturn in government spending was holding back information technology sales, it said. Even so, the company managed a 16-percent jump in earnings per share in the latest quarter and its stock has reached all-time highs.