Q. Lockheed Martin's financial troubles have been well-publicised. What has been the impact on Aeronautics, and how will the restructuring help?
A. Lockheed Martin is still the leader in advanced aeronautics equipment, and we are in the aircraft business to stay. Lean processes continue to improve our costs and affordability, and the restructuring will make us lean across the board. We are on a pretty direct path with the restructuring, which is not unlike a merger - it will take time to get all the cultures combined.
Q. The market for Lockheed Martin products was hit by Asia's economic downturn. As the region's economies recover, do you see a change?
A. I expect the market to come back. We see continued interest in our products, and we see a strong future in air mobility as well as the fighter market.
Near term, there are air mobility requirements in Japan, South Korea and Singapore. In New Zealand, there are signs the C-130J is moving toward the top of the list.
We also see interest in the light tactical transport market, particularly in Malaysia and Taiwan. Japan, meanwhile, has a requirement for an advanced maritime patrol aircraft, and we have a long history of working with Kawasaki. We are not just a seller; we want to form partnerships and that is especially true in Asia.
Q. Lockheed Martin has several partnership programmes under way in South Korea, including co-production of the F-16 and co-development of the KTX-2, both with Samsung. Now you are bidding for a stake in the new Korean Aerospace Industries (KAI). How important is winning?
A. We have put forward a strong team for investment in KAI, and we will submit a binding offer in March. Our recommended teaming includes the Carlyle Group and Aerospatiale Matra. The Dassault Rafale team may join and could include Thomson-CSF.
The KTX-2 is going very well, meanwhile, but is still in the early stages. We have begun to build major tooling for the initial development aircraft.
There will be challenges transitioning Samsung to KAI, but we have put the appropriate planning in place. Whatever happens, we will stay involved because of our contract to co-develop the KTX-2.
As for the F-16, South Korea has submitted a letter of request for 20 additional aircraft, which we expect to go forward this year.
This will keep the line going for another two years and act as a gap filler until the F-X [South Korea's next fighter] comes along. Korea is in the process of restarting the F-X requirement. As its stands we do not have a competitor, but we will watch to see how it materialises.
Q. Lockheed Martin will deliver the 4,000th F-16 in March. What are prospects for achieving the 5,000-fighter benchmark set by the F-4?
A. I feel very good about the prospects for the F-16. Firm and committed, we have some 300 aircraft on backlog. I can see another 300-400 orders minimum - 500-600 maximum. So I guess we are going to be pushing up against 5,000. It will depend on whether the JSF holds to its planned schedule, because the F-16 will continue to sell until JSF production really begins. Singapore has shown interest in the JSF, but it is too early to tell who will participate in the programme.
Q. Lockheed Martin has embarked on a drive to become a lean enterprise. What does that mean for the Aeronautics company?
A. We have been at it on the F-16 for a number of years, and we continue to make changes for two reasons: to improve our production efficiency on the F-16 and to pilot advances planned for the JSF. We are seeing major payoffs in overall cost reductions from the way we will build the JSF. On the C-130J, we have made major changes in the way we make the aircraft.
Q. Is the C-130J through its development problems, and how are you coping with the slower-than-expected sales of the aircraft?
A. We still have a bit more development to do this year, to finish the tanker version for the US Marine Corps and Italy. We have not made sales at the rate expected, so we have made additional changes to the manufacturing concept to produce the aircraft at a lower, variable rate.
We're adapted now to what we see as the market, for production at a lower rate.
There is very clearly a market out there for the C-130J. It is a unique niche, but there is getting to be more of a requirement, with the way conflicts are going and the need for small, fast reaction forces. I am very optimistic now we have restructured the programme.
Source: Flight Daily News
