Making Difficult Decisions to Secure Our Future

Memorandum

DATE:            November 14, 2013

TO:               All Lockheed Martin Employees

FROM:            Marillyn Hewson, Chief Executive Officer and President            

SUBJECT:       Making Difficult Decisions to Secure Our Future

Today our customers face an increasingly complex global security environment with rapidly shrinking budgets. Now more than ever, they are expecting us to help them stay ahead of the threats by delivering innovative products and systems at the most affordable cost.

For the past several years we have taken proactive actions to address our customers’ challenges and remain competitive in the marketplace. While we have made significant progress, there is more work we must do to help our customers achieve their missions and prepare for the continued reductions in U.S. government spending.

Today we announced a plan to close our operations in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; and Horizon City, Texas; we will also close four buildings on our Sunnyvale, Calif., campus. The important work being performed in these facilities will transition to other Lockheed Martin facilities, with closures expected to be complete by mid-2015. Details on each of these actions can be viewed here.

While many employees will be offered the opportunity to relocate, unfortunately, the actions will result in the elimination of approximately 2,000 positions. Other ongoing operational efficiency initiatives and program transitions will result in an additional 2,000 positions being eliminated by the end of 2014 in our IS&GS, MST and Space Systems business areas, including the recently announced reductions at our MST business area.

I regret these actions will adversely impact some of our colleagues who have made tremendous contributions to our corporation, their communities and our country. We are announcing these decisions now, as early as possible, to provide employees with enough time to prepare for their future and to complete a structured transition of our programs. We are also committed to providing impacted employees and their families with job placement assistance and severance benefits to ease the transition. 

These decisions are part of our continued affordability initiative and follow a thorough review of our current facility capacity and future workload projections. Since 2008, we’ve reduced overhead costs, cut capital expenses, removed 1.5 million square feet of facility space and made the difficult decision to reduce our workforce from 146,000 employees to 116,000. Today’s actions will further reduce our facility footprint by nearly 2.5 million square feet and lower our overhead costs.

I remain committed to communicating with you openly, honestly and in a timely fashion throughout the transition. Your local leaders will provide more information on how the actions may affect you.

Lockheed Martin remains a strong business and I’m confident these measures will ensure we remain a step ahead of our competition in this complex global environment. Thank you for all you do every day to support our customers’ critical missions and help make Lockheed Martin the world’s leading aerospace and technology innovator.