Lockheed to trim 600 jobs at Colo. plant

Cost-cutting planned amid decline in satellite launches

March 29, 2001|By BLOOMBERG NEWS

Lockheed Martin Corp., the nation's largest defense contractor, said yesterday that it plans to cut 600 jobs at its satellite and spacecraft-making operations to reduce costs amid a decline in commercial-satellite launches.

The job reductions, about 12 percent of the work force at the Littleton, Colo.-based unit, are under way and are being done mostly through attrition, said spokeswoman Joan Underwood. The unit has about 5,600 employees.

The failure of satellite-telephone companies such as Iridium LLC has resulted in less demand for satellites and launch services. Lockheed also has lost satellite production orders to European rivals Astrium and Alcatel Space, said Elaine Gresham, an analyst at Bethesda-based research firm Futron Corp.

Pretax operating profit at Lockheed's space-systems unit dropped 26 percent to $416 million in 2000. Last month, the company said it expects to cut $2.8 billion in expenses at its aerospace and defense businesses by the end of 2003.

Lockheed won two orders for commercial satellites last year, down from seven in 1999, dropping the company's percentage of announced orders to 5.7 percent from 32 percent, according to Futron's research. Alcatel Space won contracts for 10 of the 35 satellites ordered in 2000.

"The euro is weaker than the dollar, so it's cheaper to buy [satellites] from European companies," Gresham said.

Shares of Lockheed fell $1.34, or 3.7 percent, to close at $35.07. The Bethesda-based company's shares are up 2.4 percent this year.

The Bush administration has proposed a budget for the National Aeronautics and Space Administration that effectively cancels three U.S.-built International Space Station components and several shuttle flights during the next five years.

The Lockheed unit has made spacecraft that have explored every planet in the solar system except Pluto, and makes rockets for the U.S. military and telecommunications companies.

Astrium is a venture of European Aerospace, Defense and Space Co. and BAE Systems PLC. Alcatel Space is owned by Alcatel SA and Thales SA.

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