In “Squeezed by U.S., Lockheed CEO Aims Abroad,” the WSJ covers Lockheed Martin’s quest to expand its international market. To offset losses in the U.S. and strengthen sales efforts abroad, Chief Executive Marillyn Hewson has created an international unit headquartered in London and Washington, which oversees nine regional offices, mostly in the Middle East and Asia-Pacific. With South Korea set to purchase at least 40 F-35 fighter jets, Hewson’s decision to expand overseas operations while curtailing Lockheed’s U.S. workforce seems to have reassured investors. Lockheed’s stock climbed 50% in 2013.
However, as F-35 are relegated to Israel and Turkey within the Middle East, Hewson hopes to promote sales of F-16 fighter jets as well as missile-defense, cybersecurity and intelligence systems to other countries in the region. One of only two defense contractor CEOs present at the Dubai Air Show, Hewson met with Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s prime minister and ruler of Dubai. Having played a key role in the UAE’s modernization, he is currently looking to upgrade the UAE military’s systems capabilities.
Saudi Arabia, the United Arab Emirates, Kuwait and others in the Gulf region wary of Iran’s potential threat are forecast to spend around $175 billion on defense procurement and research over the next five years…”–Aleksandar Jovovic, AVASCENT
Hewson’s efforts may prove key in recovering from an estimated $885 million in lost revenue due to both sequestration and the U.S. government shutdown earlier this year. Lockheed plans to grow overseas business from its current 17% of annual sales revenue, to a target of 20%. And with Hewson actively seeking additional international customers to decrease the average cost per unit of the F-35, Lockheed seems to be on track to improve key U.S. government relationships, as well as expand abroad.
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