Stevens takes over top job at Lockheed

New CEO is expected to continue focus that led to defense firm being No. 1

A time of new arms spending

August 06, 2004|By Robert Little | Robert Little,SUN STAFF

Robert J. Stevens, a veteran defense industry executive and former Marine who helped guide Lockheed Martin Corp.'s emergence as the country's top military contractor, became its chief executive officer yesterday, taking control of Maryland's largest corporation just as defense spending in America reaches record heights.

Stevens' appointment, which was announced in March, was viewed by analysts as evidence that the company's recent stability will continue.

After several years of shaky mergers and awkward divestitures in the late 1990s, the company has largely stayed focused on its core defense projects since and landed some of the industry's most-sought-after and lucrative projects.

Beginning with his appointment as chief financial officer in 1999, Stevens, 52, served in the boardroom through much of that relative prosperity. He became president and chief operating officer in October of 2000.

"If you watched him as he came up from CFO, then president and COO, and board member and all that, he's had a very effective and successful performance in each one," said Paul H. Nisbet, a defense analyst with JSA Research Inc. in Newport, R.I. "He'll fit very well into the CEO's chair."

The move came on the same day that President Bush signed a $416 billion defense budget for the next fiscal year, but Nisbet and other analysts warned that Lockheed under Stevens could nonetheless face some lean years ahead.

The budget included $25 billion in "emergency funding" for operations in Iraq and Afghanistan, suggesting the Pentagon might be channeling less money in coming years into more luxurious items such as research and new aircraft.

Two of Lockheed Martin's largest defense projects, the F/A-22 Raptor and F-35 Joint Strike Fighter, are still early in their development and vulnerable to spending cuts, though both warplanes are sufficiently advanced that drastic cutbacks or cancellations are deemed unlikely.

The $32 billion defense giant Stevens is taking over scarcely resembles the Lockheed Martin that he joined in 1996, soon after the merger of Lockheed Corp. and Martin Marietta Corp.

After several years of slogging through cumbersome acquisitions and streamlining campaigns, Lockheed Martin sits firmly atop the nation's defense industry, awash in lucrative contracts to build the Pentagon's newest fighter planes and other weaponry, promising to pay billions in dividends for decades to come.

A Pennsylvania native with advanced degrees in engineering and business management, Stevens helped restructure Lockheed Martin's financial reporting procedures to lend new transparency to the company's books.

He also dismantled and downsized some of the company's space operations, saving hundreds of millions of dollars and earning credibility with investors, Nisbet said. Before joining Lockheed, Stevens worked for Loral Corp. and Fairchild-Republic Aviation.

Stevens replaces Vance D. Coffman, a Stanford University-educated aerospace engineer who spent 37 years with the Bethesda company and engineered much of its ascension to the top of the industry. Coffman will remain as the company's chairman until April.

Shares of Lockheed Martin, fell 90 cents yesterday to close at $53.18.

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