Lockheed Martin Corp. said yesterday that it will attempt to sell off businesses with about $1.8 billion in annual sales and 9,000 employees in an attempt to make the $26 billion Bethesda aerospace contractor quicker and leaner.
Among the businesses being evaluated for sale is a portion of the company's Manassas-based electronics group, a unit that makes radiation-hardened computer equipment for use in space.
"It's been evaluated for divestiture," said Gail Smith, communications manager for Lockheed's Manassas campus.
Local officials are worried. "We are concerned about a loss of local jobs," said Roger Snyder, director of community development for the city of Manassas. "I've talked with folks at Lockheed Martin who are nervous. There is a lot of angst among employees because of the rumors."
The entire space and electronics operation in Manassas employs about 900 people, but the portion that Lockheed may sell has about 300 workers.
Lockheed chief executive Vance D. Coffman also said the company would cut its management support staff in Bethesda by more than 100 positions. "What we're trying to get out is a message that says we're going to focus on our customers and that will have benefits to our shareholders," Coffman told securities analysts in a mid-morning conference call.
Coffman's moves, the result of a strategic review of Lockheed by an outside consulting firm, are designed to restore the company's credibility with Wall Street and analysts and investors.
Lockheed's credibility has become tarnished since the company surprised analysts last fall with an earnings shortfall. The company also has been bedeviled with difficulties in its space businesses, including launch failures with its venerable Titan family of rockets and quality-control problems with its satellites.
Lockheed shares, which have been flirting with 52-week lows in recent days, rose $1.56 1/4, to $32.18 3/4, yesterday, a gain of 5.1 percent.
Prudential Securities Inc. analyst Todd Ernst called Lockheed's streamlining "a baby step in the right direction" but added that he remained concerned about the company's growth prospects in its military programs.
As part of its revamping, Lockheed named a new chief financial officer, moving current CFO Philip Duke to a new corporate-wide position overseeing all of the company's shared business services. Replacing Duke is Robert J. Stevens, who was formerly head of strategic development at the company.
Most of the businesses Lockheed wants to sell are in operations that are not considered "core" to its primary aerospace, telecommunications and information services businesses. The main element of the asset shedding involves defense electronics companies, including Lockheed's New Hampshire-based Sanders Inc. subsidiary, which makes electronic-warfare equipment for other defense firms.
CAPTION: "We're going to focus on our customers," said Lockheed chief executive Vance D. Coffman.