Simmons Fights Battle Over Lockheed on Lockheed Turf
BURBANK, Calif. (AP) _ Texas investor Harold C. Simmons on Thursday took his crusade for control of Lockheed Corp. to an airport near where the aerospace giant developed the SR-71 ″Blackbird″ spy plane and stealth fighter.
″I don’t consider myself a corporate raider. I consider myself a corporate builder,″ said Simmons, who has spent $530 million buying about 19 percent of Lockheed’s stock and so far has lost about $100 million on that investment.
Simmons said he would not be able to make final decisions on what Lockheed assets to sell if he gains control of the company after the March 29 annual meeting until he sees the company’s books.
But judging from statements made by Lockheed’s chairman, Simmons said he was likely to sell about $1 billion worth of assets in the company’s technology and electronics services businesses.
Despite the loss and problems facing defense contractors as world tensions ease, Simmons maintained he was a long term investor in Lockheed, the nation’s sixth-largest defense concern.
He purchased his stock at an average share price of $44. Lockheed closed Thursday up 25 cents at $35.62 1/2 on the New York Stock Exchange.
Simmons told reporters it was ″absolutely false″ his only interest in Lockheed was seeing his share price rise enough to get out without losing money. ″That’s not my record,″ he said.
The news conference, held near the super-secret ″skunk works″ where Lockheed became famous for developing secret military planes, was the latest in a nationwide series for Simmons. He has argued his case before securities analysts in New York and reporters in Georgia and New England, where Lockheed is a big employer.
Simmons, who heads NL Industries, a specialty chemicals concern, is trying to unseat Lockheed’s board of directors at the company’s annual meeting Thursday.
He contends current management has wasted money in attempts to diversify the company away from its core missiles, space and aeronautical divisions.
Simmons and his chief lieutenant, J. Landis Martin, said if they gain control of Lockheed’s board, they will study operations at Lockheed’s electronics systems and technology services divisions.
Lockheed has deployed more than $2 billion in assets in the two divisions, which have produced scanty profits.
They men said they will pressure the managers to quickly improve profits at those divisions, then try to sell the unprofitable parts.
Chief among the problem divisions, Simmons and Martin suggested, was Sanders Inc. in Nashua, N.H. The defense electronics company was purchased by Lockheed in 1986 and is the second-largest employer in New Hampshire.
″They spent $1.2 billion for Sanders,″ Martin said. ″That’s far too much - 1.4 times sales and 57 times earnings.″ He said annual return has been just 3.9 percent.
Lockheed Chairman Daniel Tellep has criticized Simmons, who also controls sugar and oil and gas servicing companies, as having no experience in aerospace and no clear vision for Lockheed. Simmons maintains he had no experience in earlier businesses he purchased, but had made them profitable by concentrating on maximizing profits instead of emphasizing sales.
Tellep has acknowledged that Lockheed has concentrated on increasing revenue in recent years. He has said he and his top managers now are focusing on profits instead.
Simmons renewed complaints that Lockheed has denied him a chance to make his case to Lockheed’s workers, who own about 19 percent of the company through an employee stock ownership plan. He hopes to persuade those employees they’ll have more job security with him at the helm.
He also said he never would have undertaken his struggle to replace Lockheed’s directors if Tellep had granted him minority representation on the board.
Simmons again called on Tellep and other top Lockheed managers to give up contract clauses that promise them multimillion-dollar payments if they are replaced early.
″They get $11 million if they leave the company when we get elected,″ Simmons said. To set an example to employees during tough times, he said, ″I suggest they give up the golden parachutes.″