Long regarded as a prominent and powerful symbol of the national defense industry, Norman R. Augustine said yesterday that he will retire as chief executive officer of Lockheed Martin Corp. to teach, travel and pursue hobbies.
Augustine, 61, engineered the 1995 merger of Martin Marietta Corp. and Lockheed Corp., which created the biggest defense company in the world, and in the process pioneered the reconfiguration of an industry through gigantic mergers and acquisitions.
"There's a time to get out of the way, and this is my time," he said yesterday in an interview.
Augustine will step down Aug. 31, but will remain chairman of the board. The company has named President and Chief Operating Officer Vance D. Coffman to replace Augustine as CEO. Peter B. Teets, currently president and COO of the company's Information and Services Sector, will succeed Coffman as corporate COO.
Coffman, 53, is known as a top-notch daily manager, but experts say he is too low-key to step into the same limelight as the gregarious, headline-making Augustine.
"The guy is a legend," Paine-Webber analyst John Modzelewski said of Augustine. "Out of all the consolidations and events happening in the defense industry over the past 20-some years, Norm Augustine clearly has created the dominant defense company in the world. That'll make it to the history books."
Augustine, who became CEO of the old Martin Marietta in 1987, said he had been talking with the board about plans for retirement since before the 1995 merger with Lockheed. "This is probably just an opportune time," he said, pointing out that he will turn 62 in July. "The company, I think, can move ahead without a slip."
Courted by the past three presidents as a possible secretary of defense, Augustine shunned the position in favor of working through more discreet channels. He helped Congress set guidelines for international arms sales and led the successful charge to get the government to reimburse defense companies for certain merger expenses.
His success led to prominence beyond the world of defense. Newsweek magazine said last year that Augustine was "widely praised for his brilliance and integrity." In 1992, Vice President Dan Quayle picked Augustine to head the White House Commission on the Future of the U.S. Space Program. President George Bush appointed him to chair the American Red Cross, a position he still holds.
Now he plans to all but walk away from the industry where he made his reputation.
While maintaining his residence in Maryland, Augustine will commute to a "one-third-time" job as a professor at his alma mater, Princeton University. He said he has assembled an unusual course blending liberal arts and engineering disciplines.
He also said he wants to pursue a number of hobbies -- backpacking, photography, oil painting, tennis and building "very exotic" dollhouses. "I'm getting started on one of the White House that will take years to finish," he said.
Once an undersecretary of the Army, Augustine said he has no interest in re-entering public life, either elected or appointed.
"That phase of my life is over," he said. He also said he would not engage in any political lobbying, but then corrected himself. "I've got to be a little careful there. There might be something I believe strongly in and I might see a congressman or write an op-ed piece. But that's not part of the basic plan."
Augustine also said that he plans to work on a number of books but that none of the writing is likely to focus on the defense industry.
Money is not an issue for Augustine, who likes to remind people that he used to work on tar roofs for $1.69 an hour. With compensation last year of more than $2.7 million, a recent exercising of stock options worth more than $20 million and a merger-related bonus of $8.2 million, Augustine has been criticized for benefiting personally from the defense industry reconfiguration.
Yesterday he brushed off the notion that critics could put a "take-the-money-and-run" label on his departure.
"No, my plans were pretty independent [of money concerns]. I've lived a very good life. If I ever worked for money, I quit doing it about 10 years ago," he said.
Most outside observers were surprised by Augustine's decision, though some within the company said they had seen it coming. '' "He had been chafing just a bit," one executive said.
The move was said to be an extension of "long-standing plans" for succession that began last summer when Coffman was elevated to president and tabbed as the likely replacement for Augustine.
Even so, "I didn't think he was that close to even thinking about retirement," said James Roche, corporate vice president and general manager of the Northrop Grumman Electronic Sensors and Systems Division in Linthicum. "On the other hand, he's always been an innovator, and the fact that he's going to go on to do things like teach at Princeton just shows he understands there's more to life than just your job."