Lockheed Martin 2014
Remarks by Chairman, President and CEO
Marillyn A. Hewson
Lockheed Martin Media Day
Arlington, Va., June 9, 2014
Good afternoon everyone, and thank you all for being here today for Lockheed Martin Media Day. It’s great to see so many familiar faces. I had a chance to chat with a few of you as I walked through, and I look forward to the opportunity to speak to more of you as the day goes on. I also know we have some of you who are joining us for the first time, so I look forward to the opportunity to meet you, as well.
Let me first start by thanking you, because you do so much for our industry — the diligent work that you do to understand what’s going on in our industry. You play a vital role in keeping not only the public, but also our customers and our investors informed about the important work we do.
We greatly appreciate the depth and expertise that you bring to your reporting, and that’s why we’ve invited you here today, because we wanted to spend time with you so that you could learn more about us.
These are certainly complex and challenging times.
Global tensions continue in so many regions of the world: Ukraine, the Middle East, the Korean peninsula, Thailand, Nigeria — just to name a few.
We’re seeing increasing threats to businesses, governments and individuals through cyber attacks.
And as a world community, we’re facing a whole series of challenges as a result of population growth and climate change that are bringing new pressures on food supplies, energy resources and water reserves.
At Lockheed Martin, we look at these and other world issues as challenges that we can help address with our technology, with our know-how and with our scientific discovery pursuits. Since our founding more than a century ago, we’ve enabled technologies that were once only imagined.
We’ve helped these technologies become a fundamental part of daily life, and in ways that you probably don’t even realize.
For example, if you’re like me, early this morning you checked the weather forecast on your smartphone. Lockheed Martin made that possible. Over the past five decades, we have developed the weather and environmental satellite systems that have put an up-to-the-minute weather forecast in everyone’s pocket.
Or maybe you flew into D.C. for today’s briefing. Lockheed Martin made that possible, too.
Today, 1.5 million passengers arrived safely with the help of Lockheed Martin air traffic control systems. In fact, we handle 75 percent of air traffic in the United States — and 60 percent of the air traffic in the world.
And if you drove here and you relied on your GPS, Lockheed Martin made that possible, too. We designed and built many of the satellites in the GPS constellation, and we’re proud to say that they have a record of exceptional reliability.
Only a short time ago, these everyday conveniences would have seemed impossible.
This is the type of innovation that Lockheed Martin brings to the world. And, it’s a great illustration of the leading-edge technologies we continue to work on that will evolve — and in some cases revolutionize — our lives in the years and decades to come.
There’s no doubt Lockheed Martin has always been — and remains — uniquely positioned to help address some of the world's most complex problems.
And we’re doing just that.
To do that, we must continually ask ourselves: "what will our governments need next so that they can ensure the safety, security and a bright future for their citizens? And how can we at Lockheed Martin bring that future forward now?”
How can we help the future arrive?
That’s what I want to talk to you about this afternoon. I’d like to share some thoughts about how we’re helping to solve some of the world’s most complex problems, how we’re bringing new solutions forward for our customers and, at the same time, growing our business.
I’ll talk about how we’re shaping the future for Lockheed Martin and our customers in three ways: we’re delivering next generation products now, we’re expanding our partnerships in international markets, and third, we’re continuing to explore new technologies and bringing them forward.
So let’s look at each of these areas in more detail, starting with how we are delivering next generation products today.
For the past hundred years, we’ve prided ourselves on equipping our customers — primarily governments and militaries around the world — with the tools they need to defend their nation and stay safe from harm. Today, we are pushing that work to new levels.
We are investing in our core products and capabilities — in technologies designed for the depths of the ocean, the reaches of space and everywhere in between. And, we are constantly looking for ways to make them even better.
The F-35 Lightning II — our 5th generation, multi-role, multi-variant stealth fighter — is far-and-away the most advanced fighter in the world. Many of you have written about the F-35’s radar-evading stealth, supersonic speed and impressive agility.
What is equally important is that the F-35 has the most powerful and comprehensive integrated sensor package of any aircraft in history and has advanced electronic warfare capabilities.
Data collected by F-35 sensors can be immediately shared with commanders at sea, in the air and on the ground. This provides an instantaneous view of ongoing operations and makes the F-35 Lightning II an intimidating force multiplier.
The F-35 will also perform in the most challenging electronic warfare environments with the ability to locate and track enemy forces, jam radio frequencies and disrupt attacks with unparalleled precision.
All three variants of the F-35 carry Active, Electronically-Scanned Array Radars with sophisticated electronic attack capabilities. This system allows the F-35 to reach well-defended targets and evade detection.
As an update on the F-35, the program continues to progress through development. The F-35C Carrier Variant recently successfully completed shore-based testing and will continue sea trials on a U.S. aircraft carrier in October.
Software version 2B is in flight test and performing well and tracking to be complete by year-end. This is the software version for the US Marine Corps to attain Initial Operational Capability — or IOC — in 2015. And Software version 3i, the version the Air Force will declare IOC with, started flight test two weeks ago.
While we are still in Low Rate Initial Production on this program, we continue to drive down costs and gain new efficiencies, and we expect that to continue as we move closer to full rate production.
I’m excited that next month, thousands of industry colleagues and airplane enthusiasts will get their first glimpse of the F-35 as it makes its debut at the Royal International Air Tattoo and the Farnborough International Air Show in the UK.
By the time this aircraft is fully deployed, I can assure you: the F-35 will “own the skies” wherever it flies.
That’s next generation technology being delivered today.
We’re also delivering the next generation of tactical vehicles. When our soldiers are driving on a dirt road in Afghanistan, they aren’t worried about getting lost. They’re worried about deadly IEDs — Improvised Explosive Devices — that are easily hidden from view.
To protect them, the Army quickly reinforced many of their existing Humvees. But that protection has a downside: the vehicles are so heavy — and have such a high center of gravity — that off-road performance and agility in urban environments is severely limited. Plus, they’re too heavy to transport by Chinook helicopters.
We believe the answer is our Joint Light Tactical Vehicle, or JLTV. It’s lighter and more maneuverable, while keeping operators well-protected from IEDs and other attacks.
Our JLTV is engineered from the ground up to balance the “iron triangle” of protection, performance and payload, all while remaining affordable.
Again, next generation technology we’re delivering today.
We’re also delivering the next generation of anti-ship missile. Our Long Range Anti-Ship Missile — or LRASM — builds on our successful Joint Air-to-Surface Standoff Missile: JASSM.
LRASM is able to cruise autonomously — day or night — in all weather conditions using an enhanced digital anti-jamming system to detect and destroy specific targets within a group of ships at sea. And the long-range capability of LRASM will enable it to engage targets from well outside the range of direct counter-fire weapons.
We have successfully demonstrated that LRASM can be launched from the current MK 41 Vertical Launch System by only modifying the software to existing shipboard equipment, significantly reducing the risk and cost of this new capability.
Earlier this year, we broke ground to expand our manufacturing facility in Troy, Alabama, by about 70 percent to accommodate increased production of JASSM and anticipated production of LRASM.
LRASM will pave the way for rapidly fielding a surface-launch capability that meets our warfighters’ critical needs.
Again, next generation technology we’re delivering today.
On the cyber security front, we’re providing new solutions that can protect massive amounts of digital information. A few decades ago, the scale of this threat would have been hard to imagine.
Yet today, cyber warfare is a distinct possibility, and cyber attacks are a real concern for nations, businesses and individuals around the world.
The challenge is exacerbated by the sheer volume of data being generated today. According to a recent estimate, 90 percent of all digital data in the world was created in just the past two years.
As a leader in data analytics, we’re helping organizations around the world cope with this massive influx of data, and the vulnerabilities that come with unprecedented connectivity.
That’s how we’re bringing forward the future in cyber security.
Our development of the Orion spacecraft is yet another way we’re bringing the future forward. We’re helping NASA write a new chapter in the history of human space exploration.
Orion will be the first spacecraft designed for long-duration, human-rated deep space exploration. And we will use it to travel deeper into space than we ever thought possible.
Orion will transport us to the moon, to asteroids, and eventually, to Mars… and return safely back to Earth.
Orion's first flight test, called Exploration Flight Test One, will launch in December on a Delta IV Heavy rocket from Cape Canaveral. The test flight will evaluate the launch and high-speed re-entry systems, such as avionics, attitude control, parachutes and heat shielding.
Orion is clearly next generation technology we’re delivering today.
And before we can send humans to Mars, Lockheed Martin is at the forefront of autonomous exploration of the Red Planet.
The MAVEN spacecraft is travelling at nearly 34,000 miles per hour and performing perfectly.
MAVEN is now more than 54 million miles from Earth — less than 20 million miles from Mars — and expected to arrive on September 21.
MAVEN will explore the upper atmosphere of Mars, collecting data that scientists will use to understand the planet’s atmosphere and climate, the possibility of liquid water and the conditions for habitability.
These amazing innovations are only a few of many examples of ground-breaking advancements that are being developed — and delivered — by Lockheed Martin.
We are delivering next generation products now.
The second way we’re shaping the future is growing our partnerships with international governments.
Since January, I’ve spent a lot of time travelling to meet with our international customers. In the past six months, I’ve met with customers in the UAE, Israel, Poland, Germany, Singapore and Japan, as well as meeting here in the US with ambassadors and visiting senior leaders from several nations.
In all of my discussions, our international customers tell me they’re looking for a partner. They are looking for a company they can count on to deliver products, services and technologies they need to protect their citizens and deliver government services effectively.
Lockheed Martin is that company.
We will grow in the global marketplace by being the long-term partner and providing unprecedented value as we help our customers meet their challenges.
We’re making great progress. An excellent example is our recent agreement with the Royal New Zealand Navy to upgrade two ANZAC-Class frigates. That contract was awarded to Lockheed Martin Canada, and it represents the first export sale of their Combat Management System.
This is really a game changer — an export from one of our operations outside of the US — and it’s a great example of the kind of business we’re able to do through Lockheed Martin International.
The Canadian government recognizes Lockheed Martin Canada as a Canadian business that is exporting to the international market. This is exactly the kind of partnership that our international customers are looking for, and we’re making it happen.
Lockheed Martin UK is pursuing similar opportunities to export the turret system they developed for the UK’s Warrior armored fighting vehicles.
And two months ago, I took part in the opening ceremonies for a new office in Be’er Sheva, Israel, where we’re proud to be helping Israel transform its information technology capability.
The bottom line is we’re reaching out to our international customers, providing the solutions they need and doing business in the way they prefer. Which is why, like many of you, I’m preparing to attend the Royal International Air Tattoo and Farnborough airshows next month to meet with customers from across Europe and all around the world.
These two airshows provide us with a unique opportunity to highlight our portfolio of products and technologies, and to listen and understand the requirements of about 90 international delegations.
I believe our progress in key international markets in the past year is a result of our investment in Lockheed Martin International and our commitment to build trusted, long-term partnerships with our customers.
It’s because of that commitment that I’m confident we’ll achieve our target to grow international sales from 17 percent of annual sales — which is nearly $8 billion — to 20 percent or more in the next year or so.
Our international expansion will fuel our company’s sustainable growth, bring economies of scale and the associated savings to our domestic and international customers, and enable a strong, safer future for our nation and allies around the world.
The third way we’re accelerating the future is by continuing to explore new technologies and ideas.
We’re constantly at the forefront of scientific discovery, looking for new, technology-based solutions to the world’s most complex challenges and bringing those solutions forward.
One of the world challenges is the pressure on natural resources. Right now, the world population is just over 7 billion people. By 2050, that number is projected to rise to 9.6 billion people.
And, our exploding population is putting a strain on the world’s water supplies. Today, 780 million people worldwide have no access to safe drinking water. Millions die every year as a result.
These deaths can be prevented, and safe, drinkable water can and should be available to all.
In this area, Lockheed Martin’s research in nanotechnology is yielding a great deal of hope.
One of the most promising examples here is our molecular filtration solution called Perforene.
This advanced material is just one atom thick, and it can trap salt, minerals and other particles so that all water can become drinking water.
We continue to explore this promising technology, and we are optimistic about what this simple, affordable solution could mean for those who need it most.
Our expanding population is also driving an urgent need for clean, affordable energy — especially in the developing world.
A recent projection found that by 2040, the world will consume 56 percent more energy than it did in 2010, and 85 percent of that increase will come from developing nations alone. And we are facing increasing carbon emissions because billions of people have no access to modern fuels.
The global demand for energy creates an even greater need for innovative clean-energy solutions.
We’re very excited about our progress in developing powerful solutions for clean, abundant, renewable energy.
One technology we’ve been working on is Ocean Thermal Energy Conversion, or OTEC. OTEC uses the temperature difference between deep and shallow ocean waters to generate power.
We’re currently working to build the world's largest OTEC power plant in Southeast Asia that will provide a substantial part of the power to a green resort or other eco-friendly facility.
We’re also excited about wave technology to generate electricity. Wave power devices extract energy from the surface motion of ocean waves.
Unlike wind and solar sources, energy from ocean waves is predictable and can generate electricity for more hours in the year than wind and solar.
We recently signed a contract with Victorian Wave Partners of Australia to begin developing the world’s largest wave energy project to date.
And we’re also exploring tidal power, which leverages energy from the continuous, natural ebb and flow of ocean tides.
We recently signed a contract with Atlantis Resources to support the world’s largest tidal stream project. This project is currently under development in Scotland with the potential to power nearly half of Scotland’s homes.
We are working to build a stronger energy future through other means, as well, from developing the next generation of lithium ion batteries to pursuing IT solutions that improve overall energy efficiency through smart grids.
In another important area of innovation, we’re leading the development of new technologies in autonomous unmanned solutions, or robotics.
Our unmanned systems are driving progress in agriculture, disaster relief and energy exploration.
During the 2014 growing season, for instance, farmers will use small, unmanned Lockheed Martin aircraft to monitor crop health and stay ahead of any potential problems. This technology offers them high resolution images they never had before and will almost certainly help them achieve better, healthier crop yields.
In addition, we’re working on the Fire Ox — a new six-wheeled fire-fighting support vehicle that provides wild land firefighters, first responders, and other members of the emergency management community with a new tool for their arsenal of life-saving equipment.
With the ability to suppress fires, assist with search and rescue and manage hazardous materials, the Fire Ox can go where humans cannot. As a result, it minimizes casualties and injuries, while also reducing the amount of time it takes to extinguish fires and extract victims.
In our core business, we continue to be at the leading edge of technology advancement for defense and security.
For example, we’re leading the push into hypersonic aircraft and missiles.
Our SR-72 hypersonic aircraft concept is designed to fly at Mach 6, or six times the speed of sound. At that speed, no adversary will have time to react — a capability that will change the game.
We believe the SR-72 could be operational as soon as 2030.
And, our High Speed Strike Weapon is a hypersonic missile concept suitable for future bomber and fighter aircraft.
Our Lockheed Martin Skunk Works® team is leveraging its proven experience in high-Mach systems to provide an affordable, practical and compact solution.
These hypersonic systems will enable a responsive strike on time-critical, heavily-defended targets and achieve high survivability by combining altitude, speed and stealth.
And another example of Lockheed Martin bringing the future forward in defense is our work in directed energy — or laser — weapons.
Early this year, we demonstrated a 30-kilowatt electric fiber laser — the highest power ever documented — while retaining beam quality and electrical efficiency, and all while using approximately 50 percent less electricity than other solid-state laser technologies.
This 30-kilowatt milestone was achieved by combining many fiber lasers into a single, near-perfect quality beam of light. This technology can be developed into lightweight, rugged and energy-efficient weapon systems for military platforms such as aircraft, helicopters, ships and trucks.
There is so much more; I’ve just whet your appetite!
You’ll have a chance to talk to our team and see some of the amazing innovations in our demonstration centers.
All of these emerging technologies and adapted innovations are some of the many ways that we are applying our full capability to address today’s most urgent and complex challenges, leveraging our creativity and expertise to turn visionary concepts into real solutions.
I’m a realist about the complexities that today’s environment presents. I’m exceedingly optimistic about our ability to solve them.
I’m optimistic because of the 113,000 men and women of Lockheed Martin. Again and again I’ve seen what our people can do when they are united around a common mission. I’ve seen them find solutions that no one thought possible. And I’ve seen their commitment to service, performance and excellence in all that we do.
Across the world — and across our history — the people of Lockheed Martin have risen to the challenge.
And I know that tomorrow will be no exception.
By delivering next generation technology today, expanding our reach to international customers and staying at the edge of scientific discovery, Lockheed Martin is “Helping the Future Arrive,” and securing a bright future for our company as well.
Thank you very much for your interest in Lockheed Martin and for being with us today. I look forward to your questions.