Lockheed Martin Hangs Up on Global Telecom

Lockheed Martin Corp. plans to exit the global telecommunications business and focus on its four remaining core businesses, the company announced Dec. 7.

The Bethesda, Md.-based company cited overcapacity in the telecommunications industry worldwide as the primary reason for the decision.

"In view of continuing overcapacity in the telecommunications industry ... we no longer anticipate that the [Lockheed Martin Global Telecommunications] business as a whole will be able to generate sufficient returns to justify continued investment," said Vance Coffman, Lockheed Martin's chairman and chief executive officer.

The company will reassign some of the unit's businesses and investments to other company segments. Other operations will be sold off.

Based on preliminary information and assessments, Lockheed Martin officials said they expect to take after-tax charges in the fourth quarter 2001 of $1.7 billion, or $3.96 per share, related to the move.

The estimated charges reflect impairment in the value of certain businesses and investments of the company's global telecommunications unit, goodwill and other assets as well as costs associated with infrastructure reductions, including severance and facilities.

About 650 positions with the global telecommunications unit will be eliminated. These employees may apply for jobs with other units of the company. So far, about one-third have accepted or have been extended offers.

Lockheed Martin's core businesses are systems integration, space, aeronautics and technology services. The company has more than 126,000 employees and annual revenue of $25.3 billion, according to Hoover's Online of Austin, Texas.