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Incoming Lockheed CEO takes helm amid challenges
April 27, 2012 / 2:21 AM / in 5 years

Incoming Lockheed CEO takes helm amid challenges

A F-35 fighter jet prepares for landing with its life fan cover deployed over Patuxent River Naval Air Station, Maryland in this undated handout image. REUTERS/Lockheed Martin/Handout

WASHINGTON (Reuters) - Chris Kubasik will step into the top job at Lockheed Martin Corp, the biggest U.S. weapons maker, at the very moment that the Pentagon may be facing another $500 billion in spending cuts on top of the $487 billion already being implemented.

At the same time, Lockheed (LMT.N) is under mounting pressure to demonstrate progress on its biggest program, the $297 billion F-35 Joint Strike Fighter, before more international partners join Italy and the Netherlands in curtailing their orders.

But the relaxed 51-year old executive, who is well regarded on Wall Street for his air of easy confidence, says every big company faces challenges every year, including some that it cannot control.

“There’s always something that we’re taking on,” Kubasik told Reuters in a telephone interview hours after Lockheed announced that Kubasik, now the company’s president and chief operating officer, will take over as chief executive when Bob Stevens retires at end of the year.

Kubasik - who worked at a hardware store before earning a degree in accounting at the University of Maryland - says growing the company in a declining market may be tough, but so was outpacing the market as it increased.

He views management as a “team sport” and says he is confident that the company has the right businesses in its portfolio, a dedicated workforce, and what he calls the best leadership team in the industry.

To underscore the point, Kubasik conducts the interview together with Marillyn Hewson, 58, who has held a wide array of leadership posts at Lockheed for 29 years, and will now become its president and chief operating officer.

Outgoing CEO Stevens is confident the duo can guide Lockheed through the “increasing headwinds” facing the industry as it braces for big budget cuts after a decade of rapid growth.

After working closely together for 15 years, Hewson and Kubasik have an close rapport, and both share a deep admiration of Stevens and the way he has led Lockheed for the past 8 years.

Earlier on Thursday, during a three-minute break at Lockheed’s annual shareholder meeting, Kubasik and Hewson had joked about how far they’d come since their younger days when he worked at a hardware store and she worked at Dairy Queen.

“The most striking thing about Chris is that he’s always relaxed. He seldom shows any doubt about his ability to solve problems,” said Loren Thompson, a defense analyst at Lexington Institute. “He makes it look easy.”

Thompson said Kubasik impressed Wall Street while serving as Lockheed’s chief financial officer from 2001 to 2007. “His confidence was really instrumental in restoring the company’s credibility with investors,” he said.

Rob Stallard, analyst with RBC Capital, got to know Kubasik during those days and says the former Ernst & Young partner has a “very good touch” with people, a skill that might help him defuse some of the tension that has crept into Lockheed’s ties with the Pentagon during recent turmoil on the F-35 program.

Kubasik’s promotion came on the fourth day of a strike by 3,650 union workers who build the F-35 at Lockheed’s Fort Worth, Texas plant, another challenge that doesn’t seem to faze him.

Kubasik, who gets a detailed briefing on the F-35 program’s progress every evening, says salaried workers are keeping production going, and the test program is 80 test flights ahead of its targets at the moment.

Even software challenges are being addressed, he said, noting that 90 percent of the airborne software was now done.

“We are working our hardest and we will be successful in delivering this airplane,” he says. “We have the absolute commitment of everyone at this company.”

Reporting By Andrea Shalal-Esa; Editing by Richard Pullin

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