Lockheed Martin

• 1. Introduction

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  Lockheed Martin Corporation once supplied NASA with software built around US Customary force units, when metric units were expected. The Mars Climate Orbiter was lost. The spacecraft had cost $193 million to develop, and its loss came to $125 million.

  That slip belongs to an American aerospace and defense manufacturer headquartered in North Bethesda, Maryland. The same company also builds fighter jets, missile interceptors and the capsule intended to carry astronauts back toward the Moon.

  How did a firm that makes such expensive mistakes become so hard for its biggest customer to do without? Who actually pays for it all, and where does the money flow? And what do watchdogs, generals and courts say about the way it does business?

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• 2. Two Companies Become One

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  Merger talks between Lockheed Corporation and Martin Marietta began in March 1994. On the 30th of August 1994, the two companies announced a planned $10 billion merger. Shareholders approved it on the 15th of March 1995, and the deal was final. The combined headquarters would be the existing Martin Marietta site.

  Not every piece of the two companies stayed. The parts the new firm did not keep became the basis of L-3 Communications, a mid-size defense contractor in its own right. The materials company Martin Marietta Materials was spun off later.

  Executives collected large bonuses directly from the government because of the merger. Norman R. Augustine, then CEO of Martin Marietta, received $8.2 million.

  Lockheed brought a famous hangar of aircraft to the marriage. It contributed the U-2 and SR-71 Blackbird reconnaissance airplanes, the F-117 Nighthawk, the F-16 Fighting Falcon, the F-22 Raptor and the C-130 Hercules. It also brought the Trident missile and the P-3 Orion maritime patrol aircraft.

  Martin Marietta's side of the ledger leaned toward space. It contributed Titan rockets, the Space Shuttle External Tank and the Viking 1 and Viking 2 landers. It also held the management contract for Sandia National Laboratories, acquired in 1993.

  On the 22nd of April 1996, the new company completed its purchase of Loral Corporation's defense electronics and system integration businesses for $9.1 billion. The remainder of Loral became Loral Space & Communications.

  A bigger deal died on the 16th of July 1998. Lockheed Martin abandoned an $8.3 billion merger with Northrop Grumman after the government raised concerns. Together the two would have controlled 25% of the Department of Defense's procurement budget.

  Three years later, in 2001, the company won a contract that would shape the decades after it.

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• 3. Washington's Biggest Contractor

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  In 2024-73% of Lockheed Martin's revenue came from the federal government, and 65% came from the Department of Defense alone. As of 2023 it was the top contractor of the United States federal government, and had been since at least 2008.

  The customer list runs well beyond the Pentagon. NASA and the Department of Energy buy from it, as do the Department of Agriculture and the Environmental Protection Agency. It also handles surveillance and information processing for the CIA, the FBI, the IRS, the NSA, the Census Bureau and the Postal Service.

  Four divisions share the work. In 2024, Aeronautics produced 39% of revenue and Rotary and Mission Systems produced 24%. Missiles and Fire Control and Space each produced 18%.

  Aeronautics is home to the Skunk Works. Rotary and Mission Systems includes Sikorsky Aircraft, maker of the UH-60 Black Hawk and the CH-53K King Stallion, along with the Aegis Combat System.

  On the 20th of July 2015, Lockheed Martin announced plans to buy Sikorsky from United Technologies Corporation for $7.1 billion. The Pentagon criticized the acquisition as reducing competition. In November 2015 the Chinese government gave final approval, and the total cost reached $9 billion.

  The company has won the Collier Trophy six times. One came in 2001 for its part in developing the X-35/F-35B LiftFan Propulsion System. Another came in 2018 for the Automatic Ground Collision Avoidance System, known as Auto-GCAS.

  The 2001 prize was tied to the contract that mattered most. That year Lockheed Martin won the job of building the F-35 Lightning II. It was the largest fighter procurement since the F-16, with an initial order of 3,000 aircraft. By 2024, the F-35 alone accounted for 26% of company revenue.

  The jet has drawn blunt criticism from inside the military. In 2013, Lt. Gen. Christopher Bogdan said he wanted the company to take on some of the risk of the program. He added, "I'm not getting all that love yet." His comments followed earlier criticism from former Defense Secretary Robert Gates.

  In January 2020, an annual Pentagon review found at least 800 software defects in F-35 jets owned by the US Armed Forces. The reviews for 2018 and 2019 had also revealed a large number of defects.

  The legal pressure continued. In March 2026, a panel of the Fifth Circuit Court of Appeals revived a qui tam lawsuit, United States ex rel. Ferguson v. Lockheed Martin Corp. It alleges that the company gave inaccurate labor cost data during F-35 negotiations, in violation of the Truth in Negotiations Act and the False Claims Act.

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• 4. Space and Speed

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  On the 31st of August 2006, NASA awarded Lockheed Martin a $3.9 billion contract to design and build a crew capsule. It was first called the CEV and later named Orion, for the Ares I rocket in the Constellation Program. In 2009, NASA reduced the crew requirement from six seats to four for trips to the International Space Station.

  On the 23rd of September 2019, the company and NASA signed a $4.6-billion contract for six or more Orion capsules. They were meant for the Artemis program, which aims to send astronauts to the Moon.

  On the 29th of November 2018, NASA gave the company a Commercial Lunar Payload Services contract. It made Lockheed Martin eligible to bid on delivering science and technology payloads to the Moon, in a pool worth $2.6 billion.

  Its planned lander carries the name McCandless, after the late astronaut and former employee Bruce McCandless II. In 1984 he performed the first free-flying spacewalk without a lifeline to the orbiting shuttle, using a jetpack the company had built. The lander would draw on the Phoenix and InSight Mars landers.

  At 6:35 pm EDT on the 11th of April 2019, the Arabsat-6A satellite launched successfully from LC-39A. It was one of two, the other being SaudiGeoSat-1/HellasSat-4. The company described them as the most advanced commercial communications satellites it had ever built.

  On the 2nd of June 2014, the Pentagon contracted Lockheed Martin to build a space fence. Its job is to track debris and keep it from damaging satellites and spacecraft.

  Speed became a second frontier. In April 2018, the Air Force announced a $928 million contract for a hypersonic weapon. On the 13th of August 2018, a second Air Force contract followed, worth $480 million, for a hypersonic weapon prototype. A hypersonic missile can travel at one mile a second.

  On the 28th of June 2024, the US Army awarded the company a $4.5 billion contract for Patriot Advanced Capability-3 missiles. It covered 870 PAC-3 MSE missiles and related hardware. Army budget documents put each missile at roughly $4 million.

  Demand had already surged. In 2022, the Russo-Ukrainian war pushed major arms manufacturers, Lockheed Martin among them, to report a sharp rise in interim sales and profits.

  In May 2026, the company built a new 87,000-square-foot munitions facility in Alabama for Terminal High Altitude Area Defense interceptors. It is part of an investment plan of roughly $8-9 billion through 2030 to raise missile output.

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• 5. The Ledger

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  For fiscal year 2020, Lockheed Martin reported revenue of $65.398 billion, up 9.3% over the previous year. Earnings were $6.833 billion.

  At the end of 2019, the backlog stood at 144.0 billion, up from 130.5 billion a year earlier. Firm orders were $94.5 billion, and market capitalization was valued at US$109.83 billion. The company ranked No. 60 on the 2019 Fortune 500, down from No. 59 in 2018.

  Revenue in 2005 was about $37.2 billion. By 2025 it had roughly doubled to about $75.0 billion. Net income in 2025 was about $5.0 billion, and the company employed around 123,000 people.

  The workforce has swung widely. The table shows 126,000 employees in 2015 and 97,000 in 2016. The same August 2016 saw the close of a deal to merge Leidos with the company's entire Information Systems & Global Solutions business.

  Age posed a quieter threat. On the 12th of May 2006, The Washington Post reported that Robert Stevens took control in 2004 facing a retirement wave. Within 10 years, 100,000 of about 130,000 employees, more than three-quarters, would be retiring.

  Cost cutting has had a face in specific towns. On the 18th of November 2010, the company announced it would close its Eagan, Minnesota, location by 2013. On the 10th of July 2012 it announced a cut of 740 workers. On the 14th of November 2013 it said it would close its Akron, Ohio, facility, laying off 500 employees.

  As of December 2023, institutional investors hold most of the shares. State Street Corporation is the largest holder at 15.33%, followed by The Vanguard Group at 9.15% and BlackRock at 7.51%.

  In 2023, the United States made up 73.9% of sales by region. Europe followed at 10.4%, Asia Pacific at 8.7% and the Middle East at 5.3%.

  In the second quarter of 2025, profits fell sharply by 80%. The cause was a highly classified government aerospace program that CEO James Taiclet called "magical." The loss totaled $1.6 billion. Taiclet said investors would not learn details for many years to come.

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• 6. Misconduct and Influence

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  The Project on Government Oversight, a Washington, D.C.-based watchdog, keeps a database of contractor misconduct. Lockheed Martin ranks first there for the number of incidents and fifth for the size of settlements. Since 1995, it has agreed to pay $676.8 million to settle 88 instances.

  In 2001, the company settled a nine-year investigation by NASA's Office of Inspector General. It paid $7.1 million over allegations that its predecessor, Lockheed Engineering Science Corporation, submitted false lease cost claims to NASA.

  In March 2006, Todd B. Loftis, a former president of the subsidiary Tools & Metals Inc, was sentenced to 87 months in prison. He had pleaded guilty and was ordered to pay a fine of $20 million. On the 3rd of March 2012, the Department of Justice said Lockheed Martin agreed to settle allegations over the same subsidiary. It had inflated the cost of perishable tools between 1998 and 2005, and the company passed those costs to the government.

  Smaller settlements stack up. In January 2011, the company agreed to pay $2 million over false claims on a Naval Oceanographic Office contract in Mississippi. On the 20th of February 2013, it paid $19.5 million to end a securities fraud class action over expectations for its information technology division. On the 20th of December 2014, it paid $27.5 million over work done by staff who lacked the required qualifications.

  In 2015, Lockheed Martin agreed to pay $4.7 million over charges that it used taxpayer money to lobby the government against competitors. Funds passed through its subsidiary Sandia Corporation. The company had hired former Representative Heather Wilson, an influential ex-lawmaker in the defense sector, as an unregistered lobbyist.

  Politico has said the company has "a political network that is already the envy of its competitors." The magazine says it has perfected spreading jobs on weapons programs across key states and congressional districts. Its 2022 lobbying expenditure was $13.6 million.

  Its employee political action committee is among the 50 largest in the country, according to FEC data. With contributions from 3,000 employees, it gives $500,000 a year to about 260 House and Senate candidates. As of January 2011, the company was the largest contributor to House Armed Services chairman Buck McKeon, with over $50,000. It was also the top donor to Senator Daniel Inouye, who chaired the Senate Appropriations Committee until his death in 2012.

  In 2025, Lockheed Martin was among the donors who funded the demolition of the White House East Wing and a planned ballroom.

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• 7. Shocks and Protests

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  On the 8th of July 2003, an assembly line worker at the Lockheed Martin plant in Meridian, Mississippi, murdered six co-workers and wounded eight. He then killed himself. Five of the dead were black, and the shooting was racially motivated.

  The company had already opened its own investigation after complaints from numerous black employees. The worker had been ordered to attend anger management courses and diversity training but refused. Afterward, the company's President refused to say whether officials had known of any red flags.

  On the 28th of May 2011, it was reported that a cyberattack using previously stolen EMC files had broken through to sensitive materials at the contractor. On the 1st of June 2011, a new US military strategy stated explicitly that a cyberattack can justify a traditional act of war. It is unclear whether the Lockheed incident prompted that language.

  Foreign governments have pushed back as well. China sanctioned the company in July 2020, October 2020 and February 2023 because of arms sales to Taiwan.

  In May 2017, during President Donald Trump's visit to Saudi Arabia, the kingdom signed business deals worth tens of billions of dollars with US companies. Lockheed Martin was among them.

  In November 2023, activists took direct action against arms companies in the US and the UK that supplied weapons to Israel during the Gaza war. Lockheed Martin was one of them. The company has also highlighted the conflicts in Gaza and Ukraine as potential opportunities for revenue growth.

  In 2025, a UN report on corporations complicit in the Gaza genocide included Lockheed Martin.

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• 8. Inside the Machine

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  On the 16th of March 2020, Lockheed Martin announced that James D. Taiclet would replace Marillyn Hewson as CEO, effective the 15th of June. Taiclet had been head of American Tower. Before that he was president of Honeywell Aerospace and a vice president at United Technologies.

  Hewson, who had taken over as CEO on the 1st of January 2013, became executive chair. The company also created a chief operating officer role for Frank A. St John. In January 2021, Taiclet became chairman as well.

  Every program is organized into four tiers. Tier 1 is the program manager or vice president. Tier 2 holds functional teams such as finance, quality and operations, and Tier 3 holds integrated product teams. Tier 4 covers detailed product development. The leads of integrated product teams answer for whole systems or products defined by a contract's Statement of Work.

  The LM21 program relies on Six Sigma, a set of techniques for improving efficiency. Managers facilitate Kaizen events that target specific processes for improvement. Floor employees assemble aircraft using a Flow-to-takt lean manufacturing process, which separates tasks by part.

  The company also uses what it calls the Double Helix methodology. It combines experimentation, technology and a warfighter's concept of operations to create new tactics and weapons.

  Some of its work has nothing to do with war. In the 1990s, it developed the texture mapping chip for the Sega Model 2 arcade system board. It also built the entire graphics system for the Sega Model 3. Both powered some of the most popular arcade games of the time.

  On the 13th of August 2008, it acquired the government business unit of Nantero, Inc., which had developed methods for building carbon nanotubes into electronic devices. On the 25th of May 2011, it bought the first Quantum Computing System from D-Wave Systems under a multi-year contract. The company also invests in healthcare systems, renewable energy systems, intelligent energy distribution and compact nuclear fusion.

  In May 2023, it formed the microelectronics subsidiary ForwardEdge ASIC to design custom chips for customers. In December 2024 it formed Astris AI, a subsidiary to help US defense companies bring artificial intelligence into their operations.

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