UPDATE 1-Lockheed buys some assets from Canada's Aveos Fleet

Mon Jan 7, 2013 9:05pm EST

* Lockheed aims to hire 100 workers by end of year

* CEO says deal moves Lockheed into attractive, adjacent market

* Union welcomes acquisition, rehiring of displaced workers

By Andrea Shalal-Esa

WASHINGTON, Jan 7 (Reuters) - Lockheed Martin Corp, the biggest U.S. weapons maker, said on Monday that it was buying some engine maintenance, repair and overhaul assets of Canada's insolvent Aveos Fleet Performance Inc.

The acquisition was the first big news from Lockheed since Marillyn Hewson succeeded Robert Stevens as the company's chief executive on Jan. 1. Hewson said the deal would expand Lockheed's corporate presence in Canada and allowed the company to move into an "attractive adjacent market."

Lockheed did not disclose the terms of the agreement with the former aircraft maintenance firm owned by Air Canada , but said they were not material to Lockheed.

Lockheed and other U.S. arms manufacturers are looking for ways to maintain revenues by branching out into commercial businesses and other areas as they gird for cuts in U.S. military spending after a decade of sharp growth.

Hewson said Lockheed expected to start engine maintenance, repair and overhaul (MRO) operations at the former Aveos facility in Montreal later this year.

A spokeswoman said Lockheed planned to hire 100 workers at the plant by the end of the year, where they will work on CF34 and CFM56 engines which power the regional Embraer and Canadian RJ jets, as well as Airbus A320 airliners.

Larry Lawson, who heads Lockheed's aeronautics division, said the acquisition would help the company leverage the commercial strengths of its Kelly Aviation Center in San Antonio, and build synergies to benefit its customers.

Lockheed Martin Canada has more than 700 employees at facilities in Ottawa, Montreal, Dartmouth and Calgary, as well as Canadian defense ministry sites, where it provides naval combat systems, radar platforms, avionics, electronic warfare, data fusion and performance-based logistics.

The International Association of Machinists and Aerospace Workers, which signed an agreement with Lockheed to represent the workers at the Montreal facility, said it was pleased that some of the skilled workers who lost their jobs when Aveos closed would get their jobs back.

"This is great news for our members, the province of Quebec and the aviation industry in Canada because we retain this vital component in Canada and the jobs that go with it," IAM District Lodge 140 President and General Chairperson Fred Hospes.

He told Reuters that Lockheed had agreed to hire about a third of the 300 workers who lost their jobs at Aveos' Montreal plant when the company halted operations in March. He said the company could hire additional workers later, depending on growth in the company's business.

The IAM is the largest union in the Canadian air transport and aerospace sectors.

In July, Air Canada said Aveos had been unable to drum up bids for its engine maintenance and airframe maintenance businesses.

Aveos Fleet laid off roughly 2,600 workers, most of whom were employed at maintenance centers in the cities of Montreal, Winnipeg and Vancouver, when it closed in March.

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