Lockheed wary of talks
Lockheed Martin Corp. leader Robert Stevens said the best result that U.S. defense contractors can hope for from congressional budget talks would be a delay of the automatic spending cuts set to begin in January.
“It seems to us extremely difficult for the Congress to arrive” at “a fully detailed resolution to sequestration” this year, Stevens, chairman and chief executive officer of Lockheed, the world’s largest defense contractor, told a Credit Suisse investors conference in New York.
Lockheed’s operations include a facility in Akron.
Congress and President Barack Obama have failed so far to agree on a way to avert the so-called fiscal cliff, a combination of spending cuts and tax increases scheduled to begin in January. The cuts known as sequestration would impose as much as $487 billion in automatic reductions on national-security programs over a decade, including $52.3 billion from the Defense Department’s fiscal 2013 budget request of $614 billion, according to the Pentagon comptroller.
Stevens echoed pessimism expressed at the conference by the heads of defense contractors Northrop Grumman Corp. and Exelis Inc., who said they weren’t optimistic the federal government will reach a deal by the end of the year.
The effect of the automatic cuts on the F-35 fighter, the Pentagon’s costliest weapons system, and Lockheed’s biggest, would be “minimal,” Lockheed’s Chief Financial Officer Bruce Tanner said.
The “biggest exposure” for the F-35 would be a reduction in funds committed for the fifth contract under negotiation and additional funding for a sixth, Tanner said.
Compiled from wire reports