Lockheed Martin officials announced Nov. 14, 2013, that the company will close and consolidate several of its U.S. facilities and reduce its workforce by 4,000 positions as part of its effort to increase the efficiency of its operations and improve the affordability of its products and services. These actions are in response to continued declines in U.S. government spending.
By mid-2015, the corporation plans to close its operations in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; and Horizon City, Texas; and four buildings on its Sunnyvale, Calif., campus. The facility closures will result in the elimination of 2,000 positions and ongoing operational efficiency initiatives will result in the elimination of an additional 2,000 positions in the corporation’s Information Systems & Global Solutions (IS&GS), Mission System and Training (MST), and Space Systems business areas by the end of 2014.
As part of the consolidation, all program work and some employees will transition to other Lockheed Martin facilities, creating operational efficiencies and reducing costs. Space Systems and IS&GS will transition work to its Denver, Colo., and Valley Forge, Pa. facilities. The corporation is reviewing potential sites to transition the MST work, including its facilities in Owego, N.Y., and Orlando, Fla., and expects to finalize plans in early 2014. Details on each facility and the consolidation activities can be found on the company website.
“Reducing our workforce of dedicated employees and closing facilities are among the most difficult decisions we make,” says Marillyn Hewson, Lockheed Martin CEO and president. “In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business and will position Lockheed Martin to better serve our customers.”
The actions follow a strategic review of the corporation’s current facility capacity and future workload projections and are part of a continuing affordability initiative, according to the company. Since 2008, Lockheed Martin has reduced overhead costs, cut capital expenses, removed 1.5 million square feet of facility space, and reduced its workforce from 146,000 employees to 116,000.
The facility closures just announced will further reduce the corporation’s operational footprint by nearly 2.5 million square feet of facility space and lower overhead costs. Affected employees will receive job placement assistance and severance benefits to assist their transition, according to the press release.
Lockheed Martin supplied the following details in its "Facility Consolidation Fact Sheet":
Newtown, Pa. – Space Systems
• Action: The Newtown facility will close by early 2015 with most commercial and military satellite work transferring to Lockheed Martin’s Denver, Colo., facility. This will be a phased process over the next 12 to 18 months.
• Impact: This site currently employs approximately 1,050 employees and 800 positions are expected to be impacted. We will reduce 500,000ft2 of facility space.
Denver, Colo. – Space Systems
• Action: Over the next 1-2 years, we will create improved manufacturing, assembly and test operations in Denver. The initial move date is targeted for the end of 2014, with a goal of fully qualified production capabilities in 2015. Our goal is to be fully transitioned from Newtown, and fully functioning in Denver by the end of 2015.
• Impact: We plan to make approximately 200,000ft2 of facility modifications in Denver and we expect to relocate or hire approximately 350 employees.
Sunnyvale, Calif. – Space Systems
• Action: We have invested nearly $220 million in our Bay Area operations in the past 5 years. As we upgrade these facilities, we have been consolidating operations. As part of this strategy, we will close four buildings on the campus.
• Impact: Approximately 200 positions will be eliminated. We will remove approximately 600,000ft2 of facility space.
Goodyear, Ariz. – Information Systems & Global Solutions
• Action: Lockheed Martin will close its Goodyear, Ariz., facility by early 2015.
• Impact: This action will affect approximately 600 employees and reduce 495,000ft2 of facility space. Programs are expected transition to facilities in Denver, Colo., and Valley Forge, Pa.
Akron, Ohio – Mission Systems and Training
• Action: With the exception of the Akron Air Dock, operations in Akron are planned to close by early 2015. Sites under consideration to transition the work include Owego, N.Y., and Orlando, Fla. Plans are expected to be finalized in early 2014.
• Impact: The site employs approximately 600 employees and 500 positions will be impacted. This action is expected to save millions annually and reduce the company’s footprint by 677,000 ft2.
Horizon City, Texas – Missiles and Fire Control
• Action: We will close operations in Horizon City, Texas and transition the Army Tactical Missile System (ATACMS) operations to Lockheed Martin’s facility in Camden, Ark.
• Impact: 11 employees will be impacted and 70,000ft2 of facility space removed.
Source: Lockheed Martin