Global Biz

Lockheed Martin doubles job cuts

(Xinhua)
Updated: 2011-07-01 09:36

FORT WORTH, Texas - Defense contractor Lockheed Martin Corp. plans to cut 1,500 jobs in its airplane-making business, saying it needs to cut costs due to the prospect of limited defense spending.

The announcement Thursday comes two weeks after the company announced 1,200 job cuts in its space systems equipment division. Lockheed Martin employs about 126,000 people worldwide.

The cutbacks are occurring as budgetary pressures prompt the Obama administration and Congress to limit defense spending.

Lockheed Martin said many of the aeronautics cuts will fall among higher-paid workers at its biggest facilities in Fort Worth; Marietta (Georgia), and Palmdale (California). There are smaller centers in Florida, Texas, West Virginia, Mississippi and South Carolina. The aeronautics business has about 28,000 employees.

The company, based in Bethesda, Maryland, said it will offer "voluntary layoffs" to eligible workers in August and begin layoffs in mid-September, with a target of cutting 1,500 jobs.

"We're taking bold action to respond to changes in the defense business environment," said Lockheed spokesman Joe Stout. He said government customers were pressing the company to produce planes at lower costs.

In May, a senior Pentagon official told Congress that the cost of Lockheed Martin's F-35 jet fighter must be controlled. The fighter's costs have risen 26 percent while falling five years behind schedule because of design changes and technical problems.

The F-35 accounts for 12 percent of 2010 sales and eventually could be worth well more than $300 billion for Lockheed and its subcontractors. The company also makes the F-22 fighter, which is nearing the end of production, and many other military aircraft.

Last year, Lockheed earned $2.9 billion on $45.8 billion in revenue, with the US government accounting for 84 percent of sales.

Defense spending is under pressure as Congress and President Barack Obama negotiate over deficit reduction. This month, a House panel cut $9 billion from the president's request for spending on the wars in Iraq and Afghanistan.

Lockheed shares rose 60 cents to close at $80.97 in trading Thursday.