Lockheed Corp.
Aerospace/Defense
1916
When Lockheed Corp., one of L.A.’s largest employers since World War II, entered the latter half of the 1970s, it was in serious trouble.
The Calabasas-based aerospace and defense giant was accused of trying to beef up its foreign sales by bribing officials in Japan, Indonesia, Iran, Italy and the Netherlands. The scandal not only brought down the government of Japan where former Prime Minister Kakuei Tanaka was convicted of accepting bribes but led to the resignations of the company’s president and chief executive.
Despite its problems, Lockheed was still recognized as a pivotal player in the local economy. Its major projects during the ’80s included building the F-19 stealth bomber and the Trident II submarine-launched missile. It also did maintenance work on NASA’s space shuttles.
As the company entered the post-Cold War, it faced the challenges of a dwindling defense budget. Beginning as early as 1989, Lockheed undertook a massive restructuring slashing its workforce by nearly 10,000 positions and transferring hundreds of L.A. employees to Georgia.
Adapting to a post-Cold War world was not the only challenge. It had to contend with a hostile takeover bid by Dallas billionaire Harold Simmons, who bought up 20 percent of its stock between 1988 and 1990. Lockheed ultimately succeeded in fending off Simmons, but in the process lost a development contract for the U.S. anti-satellite program that it had been working on for a decade.
The efforts at diversification were proving difficult, so the company changed course and went on an acquisition binge.
In 1993, it bought General Dynamic Corp.’s fighter aircraft division for $1.5 million. Then in 1995, Lockheed merged with Martin Marietta to form the world’s largest defense contractor, with headquarters in Bethesda, Md. The following year, Lockheed Martin bought Loral Corp.’s defense electronics and systems integration division. Then, in July 1997, it announced that it would buy L.A.-based Northrop Grumman Corp.
That deal, however, was scrapped when it became clear that federal regulators would oppose it due to antitrust concerns.
Daniel Taub
