Carol Reed/FARNBOROUGH
US fighter to missiles and electronics group Lockheed Martin is reinventing itself, in the wake of the failed acquisition of Northrop Grumman, into a fully fledged information technology and commercial space launcher and services business.
According to group chairman Vance Coffman, the business mix is set to change from a 50:50 civil/ defence balance to favour the civil sector as the IT and commercial space sectors boost non-military work to 60% of a projected group turnover of $40 billion by 2003.
He says that, while defence sales would continue to grow by 2-3% annually over the next five years, their share of overall revenues will decline as the commercial space and information technology activities race ahead, with projected double-digit growth annually over the next five years.
He admits that the smaller proportion of sales to be generated by defence is attributable to the failed Northrop Grumman merger, although he expects longer-term gains in the international defence market, with 5-10% annual growth achieved through joint ventures.
International sales for the group in military and civil sectors account for 18% of its annual $28 billion revenues. "We would have been a stronger company with Northrop Grumman-with a much larger aeronautics sector," Coffman says.
Lockheed Martin now aims to expand activities in global telecommunication services. A subsidiary has been created to target the market, valued at $50 billion today and $120 billion by 2002. The business plan projects sales by the subsidiary, Global Telecommunications Services, to grow from $100 million annually to $1 billion by 2000 and to $2-3 billion within five years through acquisition of public and private communications services providers in Asia, the CIS and South America. Lockheed Martin expects to raise part of the cash via divestment of its 20% stake in Loral Space, worth about $1 billion.
Source: Flight International
