WASHINGTON — Lockheed Martin Corp. of Bethesda, Md., plans to offer buyouts to company executives in an effort to trim its management structure and lower costs in response to growing budgetary pressures facing its largest customer, the U.S. Defense Department, according to a July 6 company press release.
Lockheed Martin, the world’s largest manufacturer of space hardware, will offer financial incentives to directors and vice presidents to leave the company by Feb. 1, 2011, the release said.
The company does not have a goal for the number of positions it seeks to eliminate, but it does have a total cost savings goal that it will aim to reach through various efforts, Lockheed Martin spokesman Jeffery Adams said. He declined to be more specific.
U.S. defense firms have benefited from a robust Pentagon budget for the last decade as the United States has waged wars in Iraq and Afghanistan. Industry for some time has been expecting a more austere defense budget in the coming years, and the Pentagon this spring announced an effort to find $101 billion in cost savings over the next five years.
“We’re taking bold and responsible action to address the new reality of our business environment consistent with our customers’ need to improve efficiency and deliver additional savings,” Bob Stevens, Lockheed Martin’s chairman and chief executive, said in the press release. “Our customers are facing increasing demands with constrained resources, and they’re relying on us to give them the very best value within these constraints. This was clearly expressed by our top U.S. Department of Defense leadership in the recent announcement of major cost savings and productivity initiatives.”