"Retiring" Lockheed executive takes top job with Spirit AeroSystems

Posted Monday, Mar. 18, 2013  comments  Print Reprints
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FORT WORTH - Larry Lawson is leaving his job as the top executive at Lockheed Martin Aeronautics to become president and chief executive officer of Spirit AeroSystems in Wichita, Kan.

Spirit announced Lawson's hiring today, a day after Lockheed named Orlando Carvalho, 54, to succeed Lawson as executive vice president of the Fort Worth-based aeronautics division. Lockheed said on Monday that Lawson was retiring.

Lorraine Martin, 50, was named general manager of the F-35 Lightning II program, which Carvalho has been running.

The executive changes at Lockheed were announced by Marillyn Hewson, who took the reins as chief executive at Bethesda, Md.-based Lockheed in January following the retirement of former CEO Robert Stevens and the departure of his named successor, Christopher E. Kubasik, after it was disclosed that he had a close relationship with an employee.

"Orlando and Lorraine are impressive leaders who have consistently demonstrated their ability to build strong customer relationships, successfully manage complex programs, and inspire our teams,'' said Hewson in a statement. "I'd like to thank Larry for the many contributions he's made to our success in his 26 years of dedicated service."

Lawson had been the top executive for Lockheed's Aeronautics unit for only about a year. Spirit produces portions of the fuselage and other components for major airplane manufacturers including Boeing and Airbus.

"The board sought a CEO armed with a strong record of operating and financial performance on both mature and new aircraft programs with the ability to take Spirit to the next level," said Bob Johnson, board chairman of Spirit AeroSystems. "Larry met all of the board's criteria."

The executive change comes at a time of uncertainty for Lockheed and other big defense contractors. The company, like other aerospace manufacturers, has enjoyed some of its fattest budgets in recent years.

But that is about to change as belts are tightened in Washington, analysts say.

Tarrant's aerospace giant faces the prospect of massive spending cuts to its programs under sequestration, a provision of the Budget Control Act of 2011. The provision requires across-the-board automatic spending cuts of $500 billion to defense budgets over the next decade. In addition, Lockheed has had to deal with continued criticism of its F-35 program, which has experienced cost overruns, technical problems and other delays.

The estimated cost for the F-35 program has ballooned to $395.7 billion, a 70 percent increase since 2001, drawing intense scrutiny from Pentagon leaders. Just last month, Air Force Lt. Gen. Christopher Bogdan, the top defense official overseeing the F-35 program, said at an Australian air show that the company was trying to "squeeze every nickel" out of the Defense Department.

"What you should have inferred from my comments" was that "I need everybody" connected with the program "to worry about affordability," Bogdan said earlier this month at a defense industry conference in Arlington, Va. "That was a shot across the bow because I have been slightly frustrated with real results, real actions that need to happen to reduce costs."

Lockheed Martin has already been tightening its belt. In Fort Worth, the company has had 328 layoffs in recent months, and more than a few hundred employees have been approved to be part of a voluntary separation package or "buyout" program..

About 14,000 people work at Lockheed's west-side complex, with 6,000 directly involved in F-35 development, engineering and production, and many other jobs tied to the program.

The exact consequences of sequestration remain unknown. Richard Aboulafia, an aerospace analyst in Washington D.C., has said that companies haven't announced any plans yet because details are still forthcoming. While the sequester took effect on March 1, actual cuts are due on March 27, Aboulafia said.

Already, the White House has estimated that the number of F-35 Joint Strike Fighters procured would be reduced. Government reports have detailed the program's production delays and other problems, including a cracked turbine blade discovered recently that caused a temporary grounding of the F-35 fleet.

Program funding already approved for the F-35 would be unaffected. In December, Lockheed received a Pentagon contract guaranteeing a final installment of about $127.7 million for the fifth production lot. And just before year's end, Lockheed and the Pentagon agreed to contracts for a sixth lot of 31 AF-35s.

It's unclear what changes Carvalho and Martin will make to the program. But Carvalho, who will head the division that also makes F-16 jets and C-130 cargo planes, is well-regarded by the Pentagon's F-35 program office, a defense official close to the program told Bloomberg News.

He is seen as someone outside the company's traditional aeronautics unit background who will instill disciplined business processes in the program, the official said.

Carvalho joined Lockheed's Aeronautics division after leading the company's Mission Systems and Sensors business unit. Martin, who previously served as deputy program manager for the F-35, joined Aeronautics and previously led the C-130 and C-5 programs.

This article includes material from Bloomberg News.

Yamil Berard, 817-390-7705

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