GLOBAL THREATS CALL FOR GLOBAL CO-OPERATION AND A TRANSATLANTIC MARKETPLACE       

4 October 2002

Lockheed Martin CEO Vance D. Coffman warns against “fortress mentalities”

THE HAGUE, Netherlands, October 4, 2002 – Dr. Vance Coffman, Chairman and Chief Executive Officer of Lockheed Martin, said today that the aerospace industry should work towards an integrated transatlantic defence marketplace and avoid “fortress mentalities” on both sides of the Atlantic. Coffman also said that governments must cooperate globally and be able to coordinate their policies and their military and law enforcement actions in response to global threats.

Speaking on “The Future Transatlantic Marketplace” Dr. Coffman made his remarks at the Annual Convention of the European Association of Aerospace Industries (AECMA) in the Hague where he joined 250 top executives from the European aerospace industry and senior government representatives. Coffman is currently serving as vice chairman of the Aerospace Industries Association (AIA) of America.

International Security Industry. “We must now think of ourselves as part of the ‘international security industry,’ not simply the aerospace or defence industry,” said Coffman. “In that regard, I expect companies such as Lockheed Martin and others in our industry to take a leading role in providing the technologies and services necessary to meet the requirements for preserving what we in the U.S. call “homeland security.”

Capabilities Gaps. Concerning the disparities between the levels of investment in capabilities in the United States and in Europe, Coffman said the lack of European defence funding was a major concern for the industry – both in Europe and the U.S. Taken together with the United States experiencing one of its cyclical increases in defence spending, Coffman warned that the current capabilities gap could get even worse.

“The critical point is this: We cannot afford this type of fragmented resource allocation if we are to successfully meet the new security challenges we all face.”

Dr. Coffman welcomed recommendations in the recently published STAR 21 report[1] for a European defence market that was more integrated, rationally organized, and adequately funded, but warned that protected regions or protected industrial sectors were not consistent with an integrated and efficient marketplace. “The political trade-offs required to achieve such a marketplace are difficult – and let me add they are no less difficult in the United States.”

Coffman had the following comment regarding the STAR 21 report’s call for strengthening of “Europe’s” industrial capabilities in defence and aerospace.

“I have no quarrel with that in itself, but I believe the emphasis on “European” capabilities or “American” capabilities misses a critical point about our industry: Namely, that it is increasingly globalised . . . To argue that we can be leaders in this industry and not participate in the global marketplace – or that we can protect a home market and still expect to be competitive globally – is an argument that falls under its own weight. It does not hold up in the face of technological, economic, or even political trends.”

Lockheed Martin’s Vision for the Future. “We at Lockheed Martin are working hard to make our vision of an integrated transatlantic marketplace a reality because we believe it is the right path for our industry, for our shareholders, and, ultimately, for our key customers.”

“We are pursuing global opportunities with global partners. We are bringing international partners into major programs earlier than ever, and offering high-value advanced technology work for the duration of those programs. The F-35 Joint Strike Fighter contract, awarded to the Lockheed Martin-Northrop Grumman-BAE SYSTEMS team, is already re-writing the possibilities for global co-operation. The JSF industrial model has the potential to change the way we do transatlantic defence business and to set the tone for the next 50 years. We intend to make it a shining example of co-operation."

“We will continue to team globally with partners to develop and deliver these solutions. We will continue to bring world-class breadth and depth of systems integration skills to the transatlantic marketplace. And we will continue to create examples of transatlantic success.”

[1] Strategic Aerospace Review for the 21st Century produced by a high level group of top European aerospace executives and European political leaders)

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