Lockheed Martin

Lockheed Martin Corporation
Type	Public
Traded as	NYSE: LMT; S&P 500 component
Industry	Aerospace, defence, security
Founded	15 March 1995 by the merger of Lockheed Corporation and Martin Marietta; predecessors from 1912
Founder	Allan and Malcolm Loughead; Glenn L. Martin
Headquarters	Bethesda, Maryland, United States
Area served	Worldwide
Key people	James Taiclet (chairman, president and chief executive), Evan Scott (chief financial officer)
Products	Military aircraft, missiles, missile defence, satellites, helicopters, naval systems, hypersonics, command and control systems
Revenue	Approximately US$71 billion (2024)
Employees	Approximately 121,000
Website	lockheedmartin.com

Lockheed Martin Corporation is an American aerospace, defence, arms, information security and technology company headquartered in Bethesda, Maryland. Formed in 1995 by the merger of Lockheed Corporation and Martin Marietta, it is the largest defence contractor in the world by revenue and derives approximately three quarters of its sales from the United States government.

The company's products include the F-35 Lightning II, the most expensive weapons programme in history; the F-22 Raptor; the C-130 Hercules, in continuous production since 1956, longer than any other military aircraft; the Trident submarine-launched ballistic missile that constitutes the sea-based leg of the American and British nuclear deterrents; the THAAD and PAC-3 missile defence systems; the HIMARS rocket artillery system used extensively in the war in Ukraine; the Javelin anti-tank missile; Sikorsky helicopters including the Black Hawk; and the Orion spacecraft.

Its scale and its dependence on a single customer place it in an unusual commercial position: its revenue is determined by government budgets rather than by markets, its principal competitors are three or four other companies, its products are regulated as munitions, and its conduct is the subject of continuous political scrutiny.

History

Lockheed, 1912 to 1994

The Alco Hydro-Aeroplane Company was founded in 1912 by the brothers Allan and Malcolm Loughead and became the Loughead Aircraft Manufacturing Company in 1916, the name being respelled phonetically as Lockheed in 1926 when Allan founded the Lockheed Aircraft Company because customers could not pronounce it.

The company's Vega, designed by Jack Northrop, carried Amelia Earhart across the Atlantic in 1932 and Wiley Post around the world. Its Model 10 Electra and Model 14 Super Electra established it in airliners, and the P-38 Lightning, designed by Clarence "Kelly" Johnson, was among the most successful American fighters of the Second World War, the aircraft in which Richard Bong and Thomas McGuire became the leading American aces and in which Yamamoto Isoroku was shot down.

Skunk Works, formally the Advanced Development Programs division, was established by Johnson in 1943 to build the XP-80 jet fighter, which it delivered in 143 days. It became the most celebrated engineering organisation in aviation, operating under Johnson's fourteen rules emphasising a small team, minimal paperwork, delegated authority and physical separation from the rest of the company. Its products include the U-2 reconnaissance aircraft, flown from 1955 and still in service; the SR-71 Blackbird, which cruised above Mach 3 at 80,000 feet and which remains the fastest air-breathing crewed aircraft ever flown; the F-117 Nighthawk, the first operational stealth aircraft, whose faceted shape derived from a Soviet physicist's paper on radar cross-section that Lockheed engineers had read and applied; and, in part, the F-22 and F-35.

The company also built the C-130 Hercules from 1954, the C-5 Galaxy, the Polaris and Trident submarine-launched ballistic missiles, and the Agena upper stage used in a very large number of early space launches.

Its commercial aviation business ended badly. The L-1011 TriStar, an excellent aircraft introduced in 1972, was delayed by the bankruptcy of Rolls-Royce, its engine supplier, which the British government nationalised, and the programme required a United States federal loan guarantee of US$250 million in 1971 to prevent Lockheed's own collapse. It never recovered its development cost and production ended in 1984.

The Lockheed bribery scandals of the 1970s were among the most consequential corporate corruption cases of the century. Investigations established that the company had paid tens of millions of dollars to officials and political figures in Japan, West Germany, Italy, the Netherlands and elsewhere to secure aircraft orders. In Japan, Prime Minister Kakuei Tanaka was arrested and later convicted; in the Netherlands, Prince Bernhard, the consort of Queen Juliana, was found to have accepted payments and resigned his official positions; the Italian president Giovanni Leone resigned amid related allegations. The scandal led directly to the Foreign Corrupt Practices Act of 1977, which made it unlawful for American companies to bribe foreign officials and which has since been the model for comparable legislation internationally.

Martin Marietta

Glenn L. Martin founded his aircraft company in 1912 in Los Angeles, and it produced the B-10 bomber, the China Clipper flying boats that opened transpacific air travel, the B-26 Marauder and the PBM Mariner. It merged with American-Marietta, a producer of building materials and chemicals, in 1961 to form Martin Marietta.

Its defence and space work included the Titan family of launch vehicles and intercontinental ballistic missiles, the Viking landers that reached Mars in 1976, the external tank for the Space Shuttle, and the Pershing missiles deployed in Europe.

In 1982 the company was the target of a hostile takeover by Bendix and responded by attempting to acquire Bendix in turn, a defence that became known as the Pac-Man strategy and which ended with Bendix being acquired by Allied Corporation while Martin Marietta remained independent, heavily indebted and, in the view of its own managers, victorious.

The merger and consolidation, 1993 to 2001

The end of the Cold War reduced American defence spending by roughly a third, and in 1993 the Deputy Secretary of Defense William Perry convened the industry's chief executives at a dinner subsequently known as the Last Supper, at which they were told that the department would not support the existing number of contractors and that they should expect consolidation.

The result was the most rapid restructuring of any American industry in the period. Martin Marietta acquired General Electric's aerospace businesses in 1993 and General Dynamics' space systems division in 1994. Lockheed and Martin Marietta merged on 15 March 1995 in a transaction valued at approximately US$10 billion, and the combined company acquired Loral's defence electronics business in 1996 for US$9.1 billion.

A proposed merger with Northrop Grumman in 1997 was blocked by the Department of Justice on competition grounds, which established the limit: the department was prepared to reduce the number of prime contractors to five but not to four.

Lockheed Martin subsequently disposed of businesses outside its core, including its information technology services division, sold to Leidos in 2016, and acquired Sikorsky Aircraft from United Technologies in 2015 for US$9 billion.

Recent history, 2001 to 2026

The award of the Joint Strike Fighter contract in October 2001, against a competing Boeing design, was the largest single procurement decision in military history and has determined the company's position ever since.

Robert Stevens led the company from 2004 to 2012, Marillyn Hewson from 2013 to 2020, the first woman to lead a major defence contractor, and James Taiclet, formerly of American Tower and a United States Air Force officer, since June 2020.

Taiclet's principal strategic proposition has been what he calls 21st Century Security, the application of commercial telecommunications and software architectures to military systems so that aircraft, ships, satellites and ground units exchange data continuously rather than operating as separate platforms. The company has pursued arrangements with technology firms including Nvidia, Microsoft, Google and Intel to that end.

Its proposed acquisition of Aerojet Rocketdyne, the principal American manufacturer of solid rocket motors, agreed in 2020 for US$4.4 billion, was blocked by the Federal Trade Commission in 2022 on the ground that Lockheed Martin would control an input its competitors required; Aerojet was subsequently bought by L3Harris.

The war in Ukraine from February 2022 produced sustained demand for the company's munitions, particularly HIMARS, GMLRS rockets, Javelin and Stinger missiles, and exposed the limited production capacity that decades of low-rate procurement had left. The company has approximately doubled or trebled output of several lines with government funding, a process constrained by the availability of solid rocket motors, energetics, microelectronics and skilled labour.

Deliveries of the F-35 were suspended for approximately a year between 2023 and 2024 while the Technology Refresh 3 hardware and software upgrade was completed, and aircraft were produced and parked awaiting acceptance. The programme has also been affected by the American government's periodic questioning of its cost, including public criticism by Elon Musk in 2024 and 2025 arguing that crewed fighters are obsolete against drones, and by the Air Force's decision to proceed with the F-47 next-generation fighter, awarded to Boeing in March 2025, a loss for Lockheed Martin in the competition to succeed the F-22.

Business segments

Aeronautics

The largest segment, producing roughly 40 per cent of revenue, comprising the F-35, the F-22, the F-16, which returned to production at Greenville, South Carolina, after orders from several countries; the C-130J Hercules; and Skunk Works classified work, which is believed to include a high-speed reconnaissance and strike programme and elements of the collaborative combat aircraft that will operate alongside crewed fighters.

Missiles and Fire Control

Produces the THAAD and PAC-3 missile interceptors, HIMARS and MLRS rocket artillery, the Javelin anti-tank missile through a joint venture with RTX Corporation, the JASSM and LRASM cruise missiles, the Hellfire and JAGM, hypersonic weapons including the conventional prompt strike and ARRW programmes, and fire control and targeting systems including Sniper and LANTIRN.

This segment has been the principal beneficiary of the rearmament following 2022 and has the largest backlog relative to its size.

Rotary and Mission Systems

Contains Sikorsky, which produces the UH-60 Black Hawk, the CH-53K King Stallion, the MH-60 Seahawk and commercial helicopters; the Aegis combat system, which equips a very large number of American and allied warships and which is the basis of the Aegis Ashore installations in Romania and Poland; naval sensors and combat systems; undersea systems; training and simulation; and cyber and electronic warfare.

Space

Produces military and commercial satellites, including the SBIRS and Next Generation OPIR missile warning constellations and GPS III navigation satellites; the Trident II D5 fleet ballistic missile; the Orion spacecraft for NASA's Artemis programme; and strategic and missile defence systems. It holds half of the United Launch Alliance, a joint venture with Boeing formed in 2006 that operated the Atlas V and Delta IV launch vehicles and now operates Vulcan, and which was for a decade the sole provider of American national security launch before SpaceX entered the market.

The F-35 programme

The F-35 Lightning II is the largest and most expensive weapons programme ever undertaken. Its projected lifetime cost, including procurement, operation and sustainment through the 2070s, exceeds US$2 trillion.

It was conceived as a single aircraft in three variants serving the American Air Force, Marine Corps and Navy and the air forces of partner countries, with the intention that commonality would reduce cost. The variants are the conventional F-35A, the short take-off and vertical landing F-35B, which uses a shaft-driven lift fan permitting operation from small carriers and austere sites, and the carrier-capable F-35C.

The programme's execution has been extensively criticised. Development ran years late and billions over budget; concurrency, the practice of producing aircraft while testing continued, required a very large number of retrofits; the Autonomic Logistics Information System intended to manage maintenance was replaced after failing; and successive Director of Operational Test and Evaluation reports documented a long list of deficiencies, of which a number remain.

The aircraft that has emerged is nonetheless generally regarded by the air forces operating it as substantially more capable than anything that preceded it, principally because of sensor fusion, in which data from radar, electro-optical, electronic warfare and datalink sources is combined into a single picture presented to the pilot, and because of low observability. More than a thousand have been delivered, and operators include the United States, the United Kingdom, Italy, the Netherlands, Norway, Denmark, Australia, Israel, which has used it operationally more than any other user, Japan, South Korea, Belgium, Poland, Finland, Germany, Switzerland, Canada, Singapore, Greece, the Czech Republic and Romania.

The programme's political economy is also deliberate. Components are manufactured in a very large number of American congressional districts and in the partner countries, which the company has documented publicly and which ensures a constituency for its continuation, a practice common to large defence programmes and unusually visible in this one.

Its costs to operate remain considerably above the targets set, availability rates have persistently fallen short of requirements, and the engine, supplied by Pratt and Whitney, required a substantial upgrade programme to support the aircraft's growing electrical and cooling demands.

Skunk Works

Lockheed Martin Advanced Development Programs, universally known as Skunk Works, is the most celebrated engineering organisation in aerospace and the model for a management form adopted across industry.

It was created in June 1943 when the United States Army Air Forces asked Lockheed to build a jet fighter around a British engine. Clarence "Kelly" Johnson assembled a team of about 50 people in a rented circus tent beside a foul-smelling plastics factory in Burbank, and delivered the XP-80 Shooting Star in 143 days, a week ahead of schedule. The name came from the Skonk Works of the Li'l Abner comic strip, a still in the woods producing an evil-smelling brew, after an engineer answered the telephone with it.

Johnson codified fourteen rules, which remain published: the programme manager must have complete control; the organisation must be small and staffed by very few, good people; the number of people with access must be restricted; drawings and documentation must be minimal but sufficient; reporting must be monthly rather than continuous; the contractor must be paid promptly; inspection must be delegated to the contractor; testing must be planned in advance; and, in the fourteenth and most quoted, the engineers must be paid according to a small number of people rather than a large number.

Its products include the U-2, designed in 1954 and flying at 70,000 feet to photograph the Soviet Union, one of which was shot down carrying Francis Gary Powers in 1960; the A-12 and SR-71 Blackbird, built largely of titanium obtained, through intermediaries, from the Soviet Union itself, which flew at more than three times the speed of sound at 85,000 feet and which no aircraft has ever intercepted; the F-117 Nighthawk, whose faceted shape derived from a 1962 paper by the Soviet physicist Pyotr Ufimtsev on the diffraction of electromagnetic waves, which Lockheed engineers read in translation and applied because the computers of the 1970s could calculate the radar return of flat surfaces but not of curves; the Have Blue demonstrator; and the Sea Shadow stealth ship.

Ben Rich, who succeeded Johnson in 1975 and directed the stealth work, wrote an account of the organisation published in 1994 that has become among the most read books on engineering management.

The organisation's contemporary work is largely classified. It is known to have produced the RQ-170 Sentinel, one of which was recovered by Iran in 2011, and is believed to be responsible for a high-speed reconnaissance programme and for elements of the collaborative combat aircraft intended to fly alongside crewed fighters.

Products in detail

Military aircraft

The F-22 Raptor, in service since 2005, remains the most capable air superiority fighter in existence by most assessments, combining supercruise, thrust vectoring and very low observability. Production was terminated in 2011 after 187 aircraft, far fewer than the 750 originally planned, on the reasoning that no adversary required it, a decision widely regarded since as premature and which cannot be reversed because the tooling was dispersed.

The F-16 Fighting Falcon, designed by General Dynamics and acquired with that company's aircraft business in 1993, has been built in greater numbers than any other Western fighter since the Second World War, with more than 4,600 produced and operators in more than 25 countries. Production, which had been expected to end, resumed at Greenville following orders from Bahrain, Slovakia, Bulgaria, Taiwan, Morocco and Jordan, and the type has acquired further significance as the aircraft supplied to Ukraine.

The C-130 Hercules first flew in 1954 and has been in continuous production longer than any other military aircraft in history, with more than 2,500 built, operating from unpaved strips, ice and aircraft carriers and serving in roles from transport to gunship to hurricane reconnaissance. The C-130J, introduced in 1996, is the current model.

Missiles and space

The Trident II D5 submarine-launched ballistic missile equips the American Ohio-class and British Vanguard-class submarines and will equip their Columbia and Dreadnought successors, and constitutes the most survivable element of both countries' nuclear deterrents. It has recorded an exceptionally long sequence of successful test launches.

THAAD, Terminal High Altitude Area Defense, intercepts ballistic missiles in their terminal phase by collision rather than explosion, and is deployed in the United States, South Korea, the United Arab Emirates, Saudi Arabia, Israel and Romania. PAC-3, the current Patriot interceptor, has been used extensively in Ukraine and in the defence of Israel and Gulf states, and demand has exceeded production capacity since 2022.

HIMARS, a wheeled rocket artillery system carrying six GMLRS rockets or one ATACMS missile, became among the most discussed weapons of the war in Ukraine, its precision and mobility permitting strikes on command posts and logistics at ranges that changed the shape of the campaign.

Orion is the crew vehicle for NASA's Artemis programme, which flew uncrewed around the Moon in 2022 and is intended to carry astronauts there.

Ethics and compliance

The company operates a compliance programme of considerable size, a direct consequence of the 1970s scandals and of the legislation they produced, and its ethics training materials have been used as a model by other corporations.

Its Ethics Awareness Training, the ethics officer structure and its participation in the Defense Industry Initiative, established in 1986 after the Packard Commission examined defence procurement fraud, are among the more developed arrangements in American industry. Whether they have been effective is difficult to assess: the company has continued to settle False Claims Act cases and export control matters, at a rate neither conspicuously higher nor lower than its competitors.

The structural difficulty is that a company whose revenue depends on government contracts, whose costs are audited and whose profit is negotiated has a continuous incentive to characterise costs favourably, and the boundary between legitimate cost allocation and improper charging is genuinely unclear in a business where facilities and staff serve several contracts simultaneously.

Corporate affairs

Relationship with government

Approximately three quarters of Lockheed Martin's revenue comes from the United States government, principally the Department of Defense, with roughly a quarter from international sales, most of which are conducted through the Foreign Military Sales programme in which the American government contracts with the customer and Lockheed Martin with the government.

The relationship is not that of an ordinary supplier. The government funds development, owns much of the intellectual property, audits costs, sets profit margins on cost-plus contracts, approves exports, and is in several programmes the only permitted customer. The company in turn maintains a very large government relations operation, is among the largest corporate contributors to congressional campaigns through its political action committee, and employs former officials, a movement of personnel between the department and its suppliers that has been the subject of successive inquiries.

The arrangement is defended on the ground that developing a fighter aircraft or a ballistic missile requires capabilities that only a state can fund and only a small number of companies can maintain, and criticised on the ground that it produces a set of firms whose interests are structurally aligned with higher military spending and whose lobbying is conducted in that direction.

Employees

The company employs approximately 121,000 people, of whom a very large proportion hold security clearances, which constrains recruitment and makes the workforce difficult to replace. Its principal locations are Fort Worth, where the F-35 is assembled in a mile-long building originally built for wartime bomber production; Marietta, Georgia, for the C-130; Palmdale, California, for Skunk Works; Orlando and Grand Prairie for missiles; Stratford, Connecticut, for Sikorsky; Sunnyvale, Denver and Littleton for space; and Moorestown, New Jersey, for Aegis.

The industry faces a demographic problem: a substantial proportion of its engineers are approaching retirement, the specialised skills required, in areas including solid rocket motor production, radiation-hardened electronics and large structure fabrication, are held by few people, and the sector competes for graduates with technology companies offering higher pay and no clearance requirement.

Finances

Lockheed Martin reported revenue of approximately US$71 billion in 2024 with a backlog exceeding US$170 billion, equivalent to more than two years of sales. Its margins are in the region of ten to eleven per cent at the segment level, considerably lower than technology companies and typical of a business whose customer audits its costs and negotiates its profit.

The company has returned very large sums to shareholders through dividends and repurchases, having reduced its share count by roughly half since 2010, a practice criticised by those who consider that a company dependent on public funding should invest rather than distribute, and defended on the ground that the investment opportunities available are limited by what the government chooses to fund.

Its financial risk is concentrated in fixed-price development contracts, under which the company bears cost overruns. Several of these, including classified aeronautics programmes and the Canadian and other helicopter contracts, have produced substantial charges, and the industry has increasingly declined to accept such terms, a change of posture visible across all the major contractors since 2022.

Controversies

The bribery scandals

The payments made during the 1970s to secure aircraft orders in Japan, the Netherlands, West Germany, Italy, Turkey, Saudi Arabia and elsewhere, disclosed through the Church Committee hearings in 1975 and 1976, brought down or damaged governments in several countries and produced the Foreign Corrupt Practices Act. The company's chairman Daniel Haughton and vice-chairman Carl Kotchian both resigned, Kotchian having testified that the payments were extortionate demands rather than inducements, a characterisation the Japanese court that convicted Tanaka did not accept.

Cost and performance

The company has been criticised across decades for cost growth on major programmes, of which the F-35, the F-22, the Littoral Combat Ship, in which it built one of the two variants, and several classified programmes are the most cited. The Government Accountability Office has produced a continuous series of reports documenting schedule and cost variance across the portfolio.

The defence of the company and of the industry is that the requirements change during development, that the customer's own budgeting process produces inefficiency by varying annual quantities, and that the products are genuinely at the limit of what can be built. The counter-argument is that the incentives of cost-plus contracting, of concurrency and of the political constituencies created by distributed manufacturing all operate against cost control.

Arms exports

Lockheed Martin's products are used in conflicts that attract objection, and the company is a standing subject of campaigning by disarmament organisations. Its munitions have been identified in strikes producing civilian casualties in Yemen, where a bomb used in the Dahyan school bus attack of 2018 was traced to the company, and in Gaza, where its aircraft and munitions are used by the Israeli forces. Its position is that it supplies governments under licences issued by the United States government and that the decisions about use are made by those governments.

Its nuclear weapons work, including the Trident missile and its participation in the management of nuclear laboratories and facilities, has been the subject of sustained protest since the 1980s.

Other matters

The company has settled a number of False Claims Act cases concerning billing, including US$5 million in 2019 over work at the Hanford nuclear site, and has paid penalties over export control violations. It has also been the subject of employment litigation, including a 2008 racial harassment case settled for US$2.5 million, at the time the largest such settlement obtained by the Equal Employment Opportunity Commission in a single-plaintiff case.

Competition

Lockheed Martin's competitors are RTX Corporation, the largest by revenue when its commercial aerospace business is included; Boeing, its principal rival in combat aircraft and its partner in United Launch Alliance; Northrop Grumman, which builds the B-21 bomber and the Sentinel intercontinental ballistic missile; General Dynamics, in submarines, ships and armoured vehicles; L3Harris, which acquired Aerojet Rocketdyne; and BAE Systems, Leonardo, Thales, Airbus Defence and Space, and Rheinmetall internationally.

A newer set of competitors has emerged from outside the industry. SpaceX displaced United Launch Alliance from the majority of American launch; Anduril Industries, Palantir Technologies and a number of venture-funded firms have entered autonomous systems, software and munitions with development methods derived from commercial technology; and the drone and loitering munition categories, demonstrated in Ukraine, are dominated by producers that did not exist a decade ago.

The incumbents' advantages remain substantial: the ability to integrate very large systems, the security clearances, the manufacturing base and the relationships. Their disadvantage is a development cycle measured in decades against adversaries and entrants operating in months, and the reform of defence acquisition to address this has been attempted by successive American administrations without conspicuous success.

Assessment

Lockheed Martin is the largest defence company in the world and, through Skunk Works, the organisation responsible for a greater number of genuinely unprecedented aircraft than any other: the U-2, the SR-71 and the F-117 each did something no aircraft had done before, and each was produced by a small team in a short time.

The modern company is different in kind. The F-35 was developed over more than two decades by an organisation of many thousands across nine countries, and the contrast between the SR-71, designed with slide rules and delivered in under five years, and its successor is the subject of continuous commentary within the industry. The explanation generally offered is that the requirements are incomparably more complex, that the systems are principally software, and that the acquisition process has grown around the products; each is true and none fully accounts for the difference.

Its position is secure in the sense that the capabilities it holds cannot readily be reconstituted and that the demand for them has risen since 2022. It is insecure in the sense that its largest programme is politically contested, that its next-generation fighter competition was lost, that new entrants are demonstrating faster development at lower cost in adjacent categories, and that the character of warfare demonstrated in Ukraine places a premium on quantity and expendability that the industry's cost structure is not designed to supply.

Timeline

Key dates include the founding of the Alco Hydro-Aeroplane Company by the Loughead brothers in 1912 and of the Glenn L. Martin Company in the same year; the respelling to Lockheed in 1926; the Vega and Earhart's Atlantic crossing in 1932; the P-38 Lightning from 1939; the establishment of Skunk Works in June 1943 and the XP-80 delivered in 143 days; the C-130 Hercules first flight in 1954 and the U-2 in 1955; the Polaris missile from 1960; the merger creating Martin Marietta in 1961; the A-12 and SR-71 from 1962 and 1964; the L-1011 TriStar in 1972 and the federal loan guarantee of 1971; the bribery disclosures of 1975 and 1976 and the Foreign Corrupt Practices Act of 1977; the F-117's first flight in 1981 and its disclosure in 1988; the Bendix and Martin Marietta takeover battle of 1982; the Last Supper of 1993 and the industry consolidation that followed; the Lockheed Martin merger on 15 March 1995; the blocked Northrop Grumman merger in 1997; the award of the Joint Strike Fighter contract in October 2001; the F-22's entry into service in 2005 and the termination of its production in 2011; the formation of United Launch Alliance in 2006; the acquisition of Sikorsky in 2015; the F-35's initial operational capability with the Marine Corps in 2015 and the Air Force in 2016; the blocked Aerojet Rocketdyne acquisition in 2022; the surge in munitions demand following the invasion of Ukraine; the suspension of F-35 deliveries during the Technology Refresh 3 upgrade in 2023 and 2024; and the loss of the Next Generation Air Dominance competition to Boeing in March 2025.