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Lockheed cuts 2,000 jobs
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June 3, 1999: 9:38 a.m. ET
Aerospace division's staff reduction follows cuts in astronautics unit
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NEW YORK (CNNfn) - Defense and aerospace company Lockheed Martin Corp. Thursday said it's reducing its workforce in its aeronautical systems division by 2,000, less than three months after announcing a 10 percent reduction in its astronautics unit.
About 9,550 people work for the Marietta, Ga.-based aerospace unit. The company itself employs more than 165,000 people globally.
Lockheed said the job cuts will take place over the next 12 months from all levels of the aeronautical division, including management. About 40 percent of the cutbacks will come from retirements, attrition, or transfers.
The cutbacks follow a similar announcement at the end of March that the company's astronautics was laying off 1,200 jobs, or about 10 percent of its workforce.
Lockheed said the latest cutbacks were necessary to allow it to trim costs and still meet its commitments to supply planes to the U.S. Air Force.
"We must continue to reduce our costs to make the C-130J more affordable domestically and internationally and to meet the commitment we've made to the U.S. Air Force to carry out F-22 development and production within the established budget," said Tom Burbage, Aeronautical Systems president. "Unfortunately, part of that cost-reduction effort means significantly reducing the size of the workforce."
Cai von Rumohr, an aerospace analyst with Boston-based Cowen & Co., said he wasn't surprised by the staff reductions, given the slowing of orders the division has seen of late.
"I'm not surprised," von Rumohr said. "They don't have the orders and they're not going to stay at the levels they were at, at least not for now."
von Rumohr last week raised his rating on Lockheed to a "buy" from a "hold," and expects the company to post earnings of $2.70 a share this year. His target on the stock is "north of 50" within the next 12 months.
Separately, Korea Aerospace Industry Ltd., a joint venture between Samsung Aerospace Industries Co., Hyundai Space & Aircraft Co. and Daewoo Heavy Industries Co., said that Lockheed was among nine companies seeking to buy as much as 50 percent of the company, according to wire service reports.
British Aerospace Plc,, France's Aerospatiale Matra and Germany's DaimlerChrysler Aerospace AG are among the bidders for a $165 million stake in the South Korean aerospace company.
Lockheed shares closed down 9/16 at 41-1/2 Wednesday. 
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Lockheed Martin
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