Lockheed Martin will take a comprehensive approach to adapt to a contracting environment where price is an increasingly important factor, said Christopher E. Kubasik, the company’s incoming chief executive, in an interview shortly after his appointment.
The Bethesda-based contractor has already offered buyouts and consolidated facilities in an effort to lower costs.
When it comes to affordability, “a lot of people will conclude that that’s just cost reductions, but we think it’s much broader than that,” Kubasik said. “It really starts on the front end of the business with the engineering community [and] how do we best design these affordable products? ... That’s really where we have the biggest opportunity.”
He said Lockheed is also focusing on improving its sales to the international market, hoping that the increase in volume will drive the price down for all buyers.
Still, Kubasik, who is set to shift from president and chief operating officer to CEO on Jan. 1, said it’s hardly the first time contractors have felt under pressure.
“We want to grow faster than the market,” he said. That’s “always a challenge as a leader.”
As he readies to take over the chief executive role, Kubasik said he’ll continue traveling to Lockheed facilities to review programs and meet the company’s workforce. Additionally, he’ll be meeting buyers both abroad and in the United States and getting an introduction to Congress.
Marillyn A. Hewson, who head Lockheed’s electronic systems business, is set to succeed Kubasik as president and chief operating officer. The two have spent about 15 years working together — for the past four, Hewson has reported directly to Kubasik — and promised a smooth transition.
“Is the environment going to be challenging? Yes, it’s always challenging,” said Hewson. But “when you have change, that’s where there are opportunities, so we’re going to be proactive in seizing those opportunities.”
Kubasik said the company is looking to adjacent markets to expand, citing its investment in cybersecurity as well as a major contract the company won last year with the National Science Foundation to support the U.S. Antarctic Program, including research stations and science vessels.