Lockheed Martin is headquartered in Bethesda, Maryland principally engaged in global security and aerospace sustainment technology systems. This company is a large proponent of my work, and one of the largest military contractors. As a manufacturer of aircraft and components, and one of the two main competitors for the government’s business, Lockheed Martin engineers some of the major lines of defense that I see and work with every day. My job revolves around whether these defensive tools will perform as advertised in order to help us complete our mission. Innovation drives this company to be a financial giant not only in this decade, but for over a century. The history of the company is quite extensive, beginning as a small, few man show …show more content…
and becoming one of the most respected companies for U.S. Defense contracts of today. Lockheed Martin created the C-5 Galaxy cargo aircraft which is housed at Dover and Travis Air Force bases. Since Lockheed produces one of the two jets I work with, it is important to me to understand their financial standing and how the success of their company aids in National Defense. The publically traded company, Lockheed Martin, its history, a comparison to Boeing, a look at a few ratios, past and future years of financial data, and the stock symbol are all important means of reviewing this company to determine whether I would invest in the company’s stock. Space launchers, satellites, defense systems, and most commonly known by aircraft manufacturing, Lockheed Martin Corporation is a company with its core in aerospace products.
Allan Loughead, Malcolm Loughead, and Max Mamlock founded Alco Hydro-Aeroplane Company in 1912. They wanted to fly a design built by the Loughead brothers, the Model G. After a few years, other investors were interested and eventually flew paying customers. By 1916, the brothers organized Loughead Aircraft Manufacturing Company but with poor sales of it flying F-1, they liquidated by 1921. Allan Loughead established Lockheed Aircraft Company (spelling the company to match pronunciation) in 1926. Along with other engineers, a four passenger wooden monoplane was constructed and was highly successful. Wiley Post flew this plane around the world, achieving a record for a successful long distance flight, among many others. In 1934 the company finally saw larger profits after the creation of the first Electra. This airliner was a twin-engine, all metal craft that paved the way for the World War II twin-tailboom P-38. The United States military was a close associate to the Lockheed Corporation after creating many aircraft including the P-80 Shooting Star, F-104 Starfighter, U-2 spy plane, SR-71 Blackbird, F-117 Nighthawk, and Have Blue a stealth aircraft. After establishing a clear understanding and superiority with fighter aircraft that could fly not only as fast as the speed of sound, but also twice as fast, Lockheed delved into the world of transport aircraft. C-130 Hercules, C-141 StarLifter, and the C-5 Galaxy were the long-lived series of cargo lifters fashioned. Because of their exploration into the cargo world, Lockheed produced the first of a long line of products including the first turbojets and the heaviest, largest American aircraft. Submarines, space missions, and electronics were some of the other related sources of income during 1977, so they changed their name to
Lockheed Corporation. In 1995, the name Lockheed Martin was coined after a merger between Lockheed Corporation and Martin Marietta Corporation. The companies were the second and third largest American defense contractors and together they could prove to be a strong single company. Now more than half of Lockheed Martin’s annual sales are from the U.S. Department of Defense. Financially Lockheed Martin has been successful and at other times barely able to hold itself above water as stated in the historical information above. Above are a few ratios of both 2014 and 2013’s financial standings in comparison with its major competitor, Boeing. Of the eight ratios, Lockheed Martin has proven to be the better company 50% of the time. Boeing and Lockheed Martin tied in three of the eight ratios, 38% of the time. Only one metric did Boeing outperform Lockheed Martin, Price-Earnings Ratio. The ratios where the companies tied each other do not carry a lot of room for improvement. Even though neither company would be able to pay off their short-term debts readily, they have enough liquidity to sell off their merchandise making cash ratio not a large concern for an investor. Chairman Marillyn Hewson of Lockheed Martin in her chairman’s letter from 2014 discussed stockholder benefits, customer service, a continuum of success, a culture of performance, and the future. We saw in above price-earnings ratio that Boeing has a better P/E, but Lockheed has had twelve consecutive years of double-digit dividend growth for their stockholders. The newest aircraft, the F-35, is set for sales to not only the U.S. Marine Corps but also to the Republic of Korea and Australia. Other high driving successful innovations are a combat ship, a data processing IT contract, a vehicle program, and a space fence solution to improve tracking objects in space. Affordability, growth, and purpose are all driving factors to continue success in the company. The chairman states minimizing their facility costs to maximize their asset value has created an outlet to meet the needs of customers at a more affordable rate. Also, Lockheed Martin signed a “Blueprint for Affordability” agreement with the DoD to reduce the cost of the F-35 fifth generation to mirror that of the fourth generation. Growing internationally and partnering with other countries strengthens the company and will ultimately ensure more exploration for innovation. Research and development funding increases have decreased costs of the building process in not only better materials but shorter cycle time. Traded under the symbol LMT, Lockheed Martin seems to be in good standings according to their stock prices and stock management. Many analyst’s blogs concur that they are a healthy company and they would either buy or hold on all stocks through LMT. Conflicts in Iraq and Afghanistan have dwindled, and the defense budget is likewise on the downward trend raising concern for Lockheed Martin. Notably, the lion’s share of sales comes from the DoD, but nevertheless the Pentagon has decided to purchase about 20 F-35 jets and the world is not becoming any less dangerous. The company has doubled its stock in the past couple of years creating good news for stock traders and investors. As stated by analysts, the strengths of the company are a strong management team and opportunities including contracts to launch rockets into space and growing global security needs to combat ISIS and Boko Haram. The largest weaknesses are the overreliance on U.S. defense budget and competition from peers. Lockheed Martin was recently featured in an article, 17 September 2015, about a new contract to continue financial growth. Market Watch’s online article “Lockheed Martin Awarded Desert Hawk 3 Contract from U.K. Ministry of Defence” discusses the past successes with the unmanned aerial system (UAS) with such missions as situational awareness, security and counter-IED operations, threat detection, route reconnaissance and battle damage assessment. The U.K. was pleased with the performance of the older models of UASs, but Lockheed Martin recently upgraded the Desert Hawk 3 to the 3.1 with simplified launch, landing, all-environment capability, longer endurance, and updated sensors and ground control systems. Again on 14 September 2015, Market Watch posted an online article “Lockheed Martin Named to the 2015 Dow Jones Sustainability World Index”. The article explains that the company has been marked for sustainability for the second year in a row. Specific criteria is laid out to state whether a company can qualify for this kind of recognition including climate strategy, operational eco-efficiency, human capital development, risk and crisis management, stakeholder engagement, and corporate governance. Over the past five years Lockheed has proven its sustainability through many projects like Go Green 2020 to reduce carbon emissions, energy and waste, saved electric and gas utilities, workplace safety, and supplier code of conduct consistent with internationally recognized standards. On 2 September 2015, online article “3 Reasons Lockheed Martin Corporation’s Stock Could Rise” from Fool.com deliberates whether buying stock from the company is a good investment. The article states that Lockheed sells more than 33% military equipment to governments than Boeing does. But this article delves deeper, to determine if bigger sales makes for a successful investment for small time investors like me. Investor optimism is on the rise due to delivery of more than 104 $100 million-plus dollar fighter aircraft (F-35s) as discussed earlier. Analysts have estimated that more than $21 billion a year will be profited from maintaining and services these fighters. The company has nearly created a monopoly on fighters and their gross profit margin is the best it has ever been. Bottom line, Lockheed Martin’s stock is deservingly high, and it will likely go up more. Would I invest $10,000 in the company’s stock? The company has had a fighting history and a promising comparison against Boeing persuading the investor (in this case, me) to buy stock. Lockheed Martin is a company I would like to examine further as I am not a risky investor. Right now, I think Lockheed Martin is a great investment and will likely yield a profit. I think, however, the stock prices per share are a bit high. Finally to answer the question, would I invest my $10,000? I would, in fact, invest my money in the company.
By the end of World War I the world was beginning to realize the ability air combat presented. When World War II started planes became much more effective. Though still fabric covered, the aircraft were faster and more agile than the variants used in the Great War. In 1938, the first year of the Second World War, Curtiss unveiled their P-40 Warhawk. This aircraft was one of the best of its time and laid the foundation for modern aircraft engineering. But by 1940 the German Luftwaffe had begun to develop faster, long-ranged fighter-bombers. All current Allied aircraft could not keep up with the long range of the B-17 bombers who needed escort. In 1940, North American Aviation received an order from Britain requesting another shipment of
At the July Association of the United States Army (AUSA) Conference, LTG Ostrowski, the Army Acquisition Executive Lead, conveyed the Army’s need for future network solutions. It was also shared in the FY16 Presidential Budget that the Army has several budget requests for Communications systems and upgrades totally over $1.2B (Keller, J. , 2015). This is an opportunity for the Comms BU to expand its customer base in the U.S. Army market place. Northrop Grumman was ranked in the Top 5 of Aerospace and Defense Companies in Forbes America’s Best Employers list (2017). They were ranked over larger companies such as Boeing, Lockheed Martin and Raytheon. Their commitment to their employees, diversity, their customer and even the environment drives their culture. Northrop Grumman’s competitive advantage is leveraging the technology already developed and tested for the services (Air Force and Navy). Their experience with the Army is via services work where our people have gained the expertise to be the right people for working with the Missile Defense Agency. After analyzing both the internal and external environment of Northrop, their competitors and the analysis of their financial position, Northrop has developed a sustainable competitive advantage. They have done this through the use of product differentiation. The value they receive, the knowledge they gain and patents they own by acquiring other companies expands their portfolio to offer products and services not comparable to their competitors. Their respective strategic position establishes a value to their customers that is differentiated amongst their competitors, allowing them to offer a higher premium for their products and
Before this, the United States Air Corps was only comprised of 20,000 personnel and less than 2,000 planes, afterwards the Department of War made the Army Air Forces. It greatly grew after Pearl Harbor when the United States was thrusted into war. With the aid of military leadership from General Henry Arnold, the Army Air Force created one of the largest air armadas and took control over the aviation industry boosting the innovations of the aircrafts that were being produced. At its very peak of the war, the AAF was able to increase its personnel to 2.4 million and was then comprised of over 80,000 aircrafts.
In 1940, Preston Tucker created the Tucker Aviation Corporation, and wanted to manufacture aircraft and marine engines. He designed a fighter aircraft, the Tucker XP-57, which the U.S.A.A.C. took an interest in. Again, this n...
But as the war came to an end, so did the need for a flying wing aircraft. Still, Jack Northrop was convinced that...
What do Drew Carey, Gene Hackman, and Lee Harvey Oswald all have in common? They are all, The Few. The Proud. The Marines. Like these young men, many people after high school join one of the many branches of the military. From the U.S. Bureau of Labor, nine out of ten high school graduates go into the military. However with the Marine Corps being the smallest of the branches, only one-fifth of them become Marines. In 2006, according to the Recruit Depot Parris Island for Marines, 99.9% of the students there were high school graduates. Of the 4,420 recruits in 2006, the average age for a Marine was 19.6. Since the branches were formed, the Marine Corps has developed into a military branch that is greatly respected for its achievements and responsibilities.
Lockheed Martin is an organization that heavily relies on its defense contracts in order to generate revenue. In 2005, 95% of Lockheed Martin’s revenue came from the US Department of Defense, other US Federal government agencies and foreign military customers (Defense News, 2007). Lockheed Martin earns this revenue by winning government contracts. As previously noted, Lockheed Martin has a large customer base with the US Department of Defense. The company is the largest provider of IT services, systems integration, and training to the government (Lockheed Martin, 2008). Other customers that provide revenue for Lockheed Martin are international governments and some commercial sales of products and services (Lockheed Martin, 2008).
Back in the 1920’s when commercial aviation was a fairly new technology it was a slow business. In the 1930’s, the DC-3 was introduced and the airline industry started to become more profitable. The original DC-1 and its successor the DC-2 were both well known planes during their times. Since Douglas was well known for their prowess in engineering, American A...
Until recently, the Ford Motor Company has been one of the most dynastic of American enterprises, a factor which has both benefited the company and has brought it to the brink of disaster. Today Ford is the second largest manufacturer of automobiles and trucks in the world, and it’s operations are well diversified, both operationally and geographically. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel. It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over 100 countries.
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
The Kitty Hawk Flyer had a huge impact on America's military. The U.S. Smithsonian Institution describes the aircraft as "the first powered, heavier-than-air machine to achieve controlled, sustained flight with a pilot aboard" (Walt). Features that made the Flyer a notable success were its highly efficient propellers, which resulted from the Wrights' wind-tunnel tests and the marginal power that was delivered by their early "homebuilt" engines. The Wright brothers' planes attracted contracts from the armed forces; after the 1905 flying season, the U.S. Army Signal Corps contacted them, requesting an aircraft. All airplanes nowadays, both for commercial and military use, evolved from the Kitty Hawk Flyer. America's advanced aviation during
World War One caused the production of aircraft. It also saw the development of the first unmanned aircraft. Charles Kettering was an American inventor, he designed an unmanned aircraft known as The Kettering Torpedo or "The Kettering Bug". It could destroy an enemy miles away. It was the first drone of its time, using an onboard gyroscope that guided the drone to its location. The first test flight for the drone was on October 2nd 1918. The test failed because the drone flew too steep in the air, it stalled and eventually crashed. In 1916-1917 Elmer Sperry and Peter Hewitt developed an unmanned aircraft, known as the Hewitt-Sperry Automatic Aircraft. It was also piloted by gyroscopes and also with a barometer that could measure the altitude. The first
Case 2 focuses on the Bayerische Motoren Werke (BMW) Company. My analysis will define each of the company's strengths, weaknesses, opportunities, and threats as brought about within the case, as well as through additional research. The history of the Bavarian Motor Works is a history of innovation, dedication and determination. These achievements are reflected in the BMW emblem, symbolizing a rotating airplane propeller from BMW's early years as an aircraft engine manufacturer. Today, the emblem signifies a global company that annually produces hundreds of thousands of engines, motorcycles, and cars.
Their first planes were racers and seaplanes, excelling in speed and tight turn radius. The plane line caught the attention of the british military and the Royal Navy commissioned Sopwith to build a scouting sea plane. This would be the start of Sopwith working with the British government.To add to there resume Sopwith Aviation Company was one of the first successful aviation firms to exist, setting in place safety standards and other forms of industry standard. It was the war, however, that really gave the company their name as not many were wealthy enough to buy an new and rather expensive plane. From these humble beginnings the Sopwith company took off, so to
Although research of National Aeronautics and Space Administration's (NASA) government contractors over the last thirty years did not uncover any major allegations of shoddy workmanship or under spec deliverables, it did reveal serious issues with regard to billing fraud and huge bonuses paid out on over budget projects. Over the years there have been numerous allegations of fraud and abuse by NASA contractors. Finally in November 2000 the government was able to win a settlement against the Boeing Company of Seattle and the Houston-based United Space Alliance for a total of $825,000. In addition to the money that was awarded, these two companies agreed to forfeit any rights they have to collect on $1.2 million in unpaid invoices. This settlement was related to allegations that false claims had been submitted for work supposedly performed between 1986 and 1992 under the NASA Space Shuttle and Space Station Freedom programs. Originally, the Rockwell Space Operations Company (RSOC) was the contractor who was hired to manage the two programs. An RSOC sub-contractor, Omniplan Corporation, is accused of being involved in numerous fraudulent billing activities. The result of this fraud was that the United States was overcharged millions of dollars. The Boeing Company acquired RSOC in 1996 and at that time United Space Alliance took over the management of the two space programs. The government tried to sue Omniplan in 1993, but the company went bankrupt. In January 2000 the government then filed suit against RSOC claiming that they had submitted Omniplan’s false invoices. It is...