Lockheed Martin to Close Eight Facilities, Lay off 1,600 Workers
Days after being named a finalist to make the military’s new fighter jet, Lockheed Martin Corp. said Monday that it will eliminate 1,600 jobs as it looks for savings from its recent purchase of Loral Corp.
The nation’s biggest defense contractor said new work from the fighter and other projects would eventually offset the job losses, but Lockheed isn’t promising to re-hire all the workers once its payroll starts growing.
Lockheed blamed shrinking defense spending, which has driven a rash of mergers in recent years, for the job cuts. Lockheed said it expects savings from the cutbacks to reach about $800 million annually by 1999.
Lockheed’s purchase of the majority of Loral, which makes radar and other defense electronics gizmos, was approved earlier this year by the Defense Department, which said the deal would cut its own costs. A smaller Loral Space & Communications Ltd. continues to stand alone.
In 1995, Lockheed ranked solidly as the top defense contractor, with U.S. military work generating nearly half its $30 billion in revenue.
Norman Augustine, Lockheed’s vice chairman and chief executive, said the company should be more competitive after closing eight Loral and Lockheed plants in California, Connecticut, New York, Pennsylvania and South Carolina.
Lockheed was given the go ahead on Saturday to develop a prototype jet fighter. Boeing was also named a finalist for the $219 billion deal. McDonnell Douglas lost out.
Lockheed this month also won a $1.8 billion defense contract to provide five satellites used to warn the nation of missile attacks. The Pentagon could purchase up to an additional 15 satellites, pushing the deal’s worth up to as much as $22 billion.
Earlier this year, Lockheed won a $900 million NASA contract to design the X-33, a fully reusable, wedge-shaped space vessel expected to be able to move people in and out of space with the ease of an airplane. It was the first award of a new spacecraft design since 1972.