Lockheed Martin has made a habit of under-promising and over-delivering on growing the international business.
When chief executive Marillyn Hewson created the Lockheed Martin International unit four years ago, sales to countries outside the USA accounted for a mere 17% of the company's total revenues.
At that time, Hewson set a goal to increase the international contribution to Lockheed revenues to 20% within a "few" years. Two years later, international sales had risen to a 21% share of Lockheed revenues and Hewson raised the bar again to 25%. A year later, foreign sales totalled $12.7 billion, accounting for 27% of all Lockheed revenues.
As the company arrives at the Paris air show, Hewson has raised the bar yet again.
"It's going to grow to 30% of our revenue or more over the next few years," she says in an interview.
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But the challenge of increasing international market share may not be so easy to achieve this time. From 2015 to 2017, Lockheed benefited from a rare confluence of budgetary and programme forces. US defence spending flattened or dipped, while deliveries of F-35s to international customers rose significantly.
From 2018-2020, US defence spending is expected to rise by 3-5%/year, Hewson says. As US defence spending rises, it will be harder for the share of international sales in Lockheed's revenue results to continue their upward climb, but Hewson remains optimistic.
"My goal is that they'll both grow," Hewson says.
Helping Hewson's causes will again be the F-35 programme. As more international partners follow-through on decade-long commitments, deliveries of F-35s to foreign customers will continue to grow as a share of the overall fleet – accounting for half of up to 130 deliveries in the pending 11th lot of low-rate initial production
As the largest defence programme in history, the F-35 may not need any lucky breaks, but it continues to receive them.
Last November, Canada's long-term commitment to the F-35 seemed in jeopardy, with the Trudeau government pledging to order an interim batch of 18 Boeing F/A-18E/Fs and reopen the CF-18 replacement tender to competitive bids.
Earlier this month, however, the Canadian foreign minister said the government would re-evaluate the Super Hornet purchase as a protest against Boeing's decision to file an anti-dumping complaint against the Montreal-built Bombardier CSeries.
Source: Flight Daily News
