* Four plants to be closed, work to be relocated
* US defense cuts seen leading to more industry layoffs
By Karen Jacobs
ATLANTA, Nov 14 Lockheed Martin Corp,
the world's largest defense 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 U.S. defense 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 defense 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 U.S. sequestration
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 defense equipment and warships, among other things, said
last month that uncertainty about future U.S. 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
Thursday's move reflected ongoing efforts to trim costs, and
followed a review of workload projections, the company said.
Since 2008, the company has pared its workforce by 30,000
employees to 116,000 worldwide.
Peter Arment, an analyst with Sterne Agee, said in a note to
clients on Thursday the additional cost-cutting at Lockheed
would help profit margins as sales get pressured. Lockheed has
forecast that total sales will decline in 2014.
"For now, (Lockheed) remains one step ahead of the budget
downturn," Arment said.
Lockheed shares have risen about 49 percent this year. They
rose 0.4 percent on Thursday, to $137.85.