- The Washington Times - Saturday, December 8, 2001

ASSOCIATED PRESS
Lockheed Martin Corp.will pull out of the global telecommunications business, the Bethesda defense contractor said yesterday.
The defense contractor said poor economic conditions in Latin America and an oversupply in the global telecommunications market led it to shut down Lockheed Martin Global Telecommunications.
The company will sell some of components of LMGT and absorb others into its remaining business units, cutting 650 jobs of the division's total work force of 3,500.
"We no longer anticipate that the LMGT business as a whole will be able to generate sufficient returns to justify continued investment," Chief Executive Vance Coffman said.
Roughly one-third of the 650 LMGT employees slated to lose their jobs have accepted or been offered positions elsewhere at Lockheed. The remaining workers will be shifted to Lockheed's other companies.
The world's biggest defense contractor, Lockheed recently won a mammoth deal to build the Joint Strike Fighter, a next-generation jet that could be the largest military contract ever awarded.
But its telecommunications arm, one of Lockheed's six major segments, has suffered losses during the past several years.
LMGT was formed when Lockheed bought Comsat Corp., a commercial satellite company, in August 2000. It offered satellite and fiber-optic communications services, both of which have been hurt by an oversupply, LMGT spokesman Charles Manor said.
"There is too much of it and it is driving prices through the basement," Mr. Manor said.
The economic woes of South American countries such as Argentina and Brazil, which accounted for about a tenth of the division's business, also hurt LMGT, Mr. Manor said.
Lockheed plans to move Comsat into its space systems division, but analysts said the satellite component may end up on the auction block.
"I question if they are really intending to stay in the satellite services area. If they had a buyer tomorrow at a decent price, they would sell Comsat," said Paul H. Nisbet of JSA Research.
Lockheed Martin already had planned to sell Comsat Mobile Communications to Telenor of Norway for $116.5 million. The company is also in discussions over the sale of other components, Mr. Manor said.
The $1.7 billion fourth-quarter charge the company will take will amount to $3.96 per share. Analysts surveyed by Thomson Financial/First Call expected Lockheed to earn 48 cents per share before charges this quarter.
Lockheed Martin shares fell 46 cents to close at $45.74 on the New York Stock Exchange yesterday.

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