Lockheed-Prime Government Contractor

by YankeeJim | January 27, 2012 at 07:13 am

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With only 15% of its revenues from foreign military sales, and 85% dependency on the government customer, Lockheed Corporation is more of a “co-go” enterprise than not. Co-go means commercial and government, though in this case it’s mostly government. The arrangement may seem alright, but it comingles profit motive with government in a manner that needs improving. I propose a new business rule to Congress and the President: All government contractors must demonstrate commercial viability as a prerequisite for qualifying for government work. Doing this places the burden on enterprise to be superior performers in the commercial marketplace and producing products and providing the best quality services. Without that rule, we have a system of corporate welfare that feeds a military industrial complex ripe for political exploitation as it is today.

“Lockheed braces for declining IT sales in 2012  By Matthew Weigelt  Jan 26, 2012 Lockheed Martin Corp. expects sales in its IT division to continue downward in 2012 as it did in 2011, during which net sales decreased by 5 percent. Sales in the company’s Information Systems and Global Solutions (IS&GS) segment decreased $92 million, or 3 percent, during the forth quarter, which ended Dec. 31, compared to the last quarter of 2010. It also declined by $540 million, or 5 percent, for all of 2011, compared to the previous year, according to financial figures released Jan. 26. Overall though, the business segment was hit by the fiscal pressures the government is under, which keep agencies from spending as much on IT products and services in 2011. Executives expect the segment's annual operating margins in 2012 to be similar to the annual 2011 figures. “The corporation expects that continued budget pressure in the government IT market will contribute to lower sales in 2012, compared to 2011,” the company said. For Lockheed overall, the company reported fourth-quarter net sales of $12.2 billion, compared to $12.8 billion in 2010. Earnings from continuing operations during the fourth quarter were $698 million, compared to $821 million in 2010. In its IS&GS segment, Lockheed had about $120 million less in volume of sales during the quarter. Sales were down by $665 million for the entire year. The financial numbers were down because of the conclusion of the Decennial Response Integration System program, which supported the 2010 U.S. Census and less spending on the Airborne Maritime Fixed Station Joint Tactical Radio Systems program. However, the decreases were offset somewhat by increased sales in other programs. Operating profit in IS&GS increased in the fourth quarter and for the year overall. In the last quarter, profit increased $55 million, or 28 percent, and $60 million, or 7 percent, for the year compared to the corresponding periods in 2010. Company executives foresee the coming year putting more pressure on them. “We will need to remain agile in 2012 given the uncertainties ahead, but I am confident that our workforce and diversified portfolio will enable us to continue to deliver value to our customers and shareholders,” said Bob Stevens, chairman and CEO of Lockheed Martin.”

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YankeeJim

at 07:21 on January 27th, 2012

Change the business rules to motivate invention and commercialization that will strengthen national security -- economic scurity and military security.

"thirty-aught-six" (not verified)

at 07:55 on January 27th, 2012

Sales down $120 million? What's that equate to? Lockheed-Martin lost the sale of a single F35. Companies like Lockheed-Martin are not producing products for widely dispersed consumer sales. They produce highly technological defense instruments of which the government controls the sale of. It is a closed market heavily influenced by foreign policy and national security interests. Your one glove fits all metrics don't apply. If you still think that your simplistic metric ought to apply then you should be advocating that companies like Lockheed-Martin be allowed to sell their products with out government controls. In which case or own costs would come down and we wouldn't have to pay 122 million or so for a single strike fighter. Come on, Obama's your good buddy. Convince him of the necessity of open markets. Emphasize that by being free to sell to the world our own costs per fighter will be reduced and the savings can go to one of his pet social programs. Obamacare is going to require billions.

YankeeJim

at 08:03 on January 27th, 2012

There is no reason to trash ITARS, the regulation controlling foreign weapons sales. You miss the point completely. Resident in defense manufacturing are capabilities that can be applied to producing superior commercial products and to producing new forms of power generation. They need motivation to do this. Resting on government defense budget is too easy and actually reduces innovation. The government is not an enemy -- with exception of poorly qualified people that We the People elect because we haven't improved our own ability and initiative to make it better. Don't be a declinist and reactionary. Put that brain of yours to work making forward progress.

"thirty-aught-six" (not verified)

at 09:52 on January 27th, 2012

LOL. What you are saying is that those companies making defense and military products should be making iPods, solar panels or some other PC trending product, which ever you determine, and there-by fit into your one glove fits all version of the idealist world. And maybe Kraft, who is closing some plants and laying off workers should be making electric cars and the big three should be making bubblegum. LOL. In any case they all should be doing something other than producing what they produce to fit your metrics of what other people should be doing. Like I said previously, advanced high-tech companies like Lockheed-Martin do produce commercial products but, those products also inhabit a small market do to their costs of advanced R&D, technological make up, material usage, carbon composites and specialized alloys and general public demand, Some of it translates into commercial usage like instrumentation, radar advances and what have you but the essential product is limited. Even the software developed is controlled by government. The essential fact remains that if you are going to whine about defense innovation not being commercially viable in terms of your expectations then you should be advocating the release of government controls over that product as it is that government control that inhibits commercial viability in the long run for such companies. Not the products produced by such companies per sae. Though in the case of Lockheed-Martin specifically even that wouldn't translate into PC trending for you. F-16, F-22, F-35 fighters, C-130 transports, combat ships, missiles (Hellfire, Javelin, Patriot, etc.), space systems (Hubble Space Telescope, Mars Reconaissance Orbiter, etc.), military electronics and even the new Presidential helicopter don't translate into huge commercial sales. The market share remains limited in as much as do yachts or Ferrari's or the Airbus A300-600. There is a cost to remaining one step above the innovation curve in defense and military hard and software. There is nothing wrong with having a company dedicated to maintaining that advantage. And these Companies like Lockheed-Martin don't get to rest on the defense budget or cease innovation at any time. They all place their products up for competition and bid to build the next generation of advanced weapons, aircraft, ships, satellites, etc. for the United States military and national security needs. It is in no way the free ride or stagnated enterprise you would like to make it out to be. Then again perhaps you think we should be buying our advanced fighters from the Chinese like you buy your iPhone.

YankeeJim

at 16:29 on January 27th, 2012

I am glad you are pondering this subject. Diversification is exactly what is needed now. We should be making electronics in this country, not buying them from China.

Scrivener

at 09:37 on January 27th, 2012

Could these articles first published here at NowPublic and widely disseminated worldwide have anything to do with Lockheed Martin Info System's decline?

http://nowpublic.com/world/mil-security-complex-led-lockheed-martin-hijacks-u-s-govt

http://nowpublic.com/world/u-s-silently-tortures-americans-cell-tower-microwave-weapon

LOCKHEED MARTIN RUNS DRACONIAN CENSORSHIP REGIME FOR U.S. HOMELAND FUSION CENTER AGENCIES/COMMANDS -- INTERCEPTS, CENSORS, TAMPERS WITH TELECOMMUNICATIONS OF EXTRAJUDICIALLY 'TARGETED' AMERICANS, LEAVING THEM VULNERABLE TO I.D. THEFT, FRAUD, SAYS VETERAN JOURNALIST:

http://nowpublic.com/world/u-s-govt-censors-internet-political-speech-fraud-deception

http://nowpublic.com/world/u-s-govt-uses-spoofed-web-pages-and-urls-censor-internet

http://viclivingston.blogspot.com

Scrivener

at 12:22 on January 27th, 2012

Speaking of Lockheed Martin...

Attempted comment to White House Facebook page:

URGENT VALERIE JARRETT, DAVID PLOUFFE FOR POTUS (webmstr fwd ASAP):

This journalist attempted to post a question to President Obama on the White House YouTube page for the Jan. 30th session. Wrote only one sentence, much shorter than other posted questions, and got on-screen message that I was "over limit." Cut down length, still got over limit message. Finally cut question to just a few words. It APPEARED to post. But when I examined the queue of questions, mine was missing. Apparently, the real-time fascist censorship regime of Lockheed Martin under USG contract is censoring all of my internet content in real time. So, on the off chance that THIS comment gets through, I would like to submit my question here. Please be so kind as to place it in the queue -- and STOP LOCKHEED MARTIN FROM IMPOSING IDEOLOGICALLY DRIVEN FASCIST CENSORSHIP ON U.S. CITIZENS! My question:

Why do you permit US security forces to extra-legally assault, impair, harm, enslave thousands of Americans with a cell tower radio frequency directed energy weapon system mispresented as surveillance? http://viclivingston.blogspot.com/2011/12/u.html

NOTE: More malicious HTML code found embedded within my NowPublic.com/scrivener page to sabotage links with "wbr" and target="_blank" rel="nofollow nofollow" commands inserted into copy. FASCIST CENSORSHIP BY LOCKHEED MARTIN UNDER USG CONTRACT.

YankeeJim

at 16:31 on January 27th, 2012

Scrivener, they have your number, you know that. Every time you knock, your microwave goes off and they zap you.

Santiago (not verified)

at 17:05 on January 27th, 2012

They've been zapping you, too, Yankee. Haven't you noticed how tired you've been lately and that occasional vertigo, momentary confusion, and loss of balance? We're ALL guinea pigs to THEM, even (especially) those of you who assume you're on the TEAM.