Most in aerospace have heard the story: It was 1993, post-Cold War, and then-Defense Secretary Les Aspin called together the chief executive officers of the nation's 15 biggest defense contractors and told them they needed to start consolidating.
The words resonated with Norm Augustine, then CEO of Martin Marietta. As the story goes, he set his sights on rival aircraft manufacturer Grumman Corp. – submitted a bid in fact. But the two companies couldn’t land at a number that pleased both sides.
But then he got a call from Daniel Tellep, CEO of Lockheed Corp. A year later, the union of what were then the second and third largest US defense contractors became official. And the rest is history.
Part of the merger was out of necessity, said Augustine in an October interview with Defense News. "You weren’t going to survive unless you were willing to combine. There was a degree of luck involved. But we realized this was an ideal combination."
A combination of companies that Augustine described as fierce competitors, but also friends. And a combination of two companies that touted a shared history of sorts: in 1912, Glenn Martin established the Glenn Martin Co. in Los Angeles and — only 400 miles away — Allan and Malcolm Lockheed founded the Alco Hydro-Aeroplane Co., later renamed the Lockheed Aircraft Co. As former Lockheed Martin CEO Bob Stevens said in 2012, during an interview about the significance of the merger, Lockheed Martin now has a legacy "that started from those cloth and wood biplanes." A "breathtaking transition," he said.
And the effect has been lasting. Lockheed tops the Defense News Top 100 as the largest defense company in the world. And it's held that position for some time.
"Norm’s contributions to Lockheed Martin were critical to the evolution of our company," said Lockheed Martin Chairman and CEO Marillyn Hewson. "He helped position us for global leadership through his wisdom, vision and boldness. Norm understood that serving our customers in the Armed Forces requires a focus on innovation and improvement at every stage in the development and delivery process. From our innovation labs to manufacturing lines, Norm’s leadership helped us adapt to and reshape the modern defense and aerospace industry."
The dynasty, so to speak, could have grown far bigger still in the mid 1990s, had another bid for Northrop Grumman by Lockheed Martin gone through. But government shut it down.
"It would’ve been a terrific combo. We could’ve saved the government of couple billion of dollars every year," Augustine said. "My biggest disappointment in my entire business career was when the Justice Department stopped the Northrop Grumman transaction. We had no idea. They called one day and said it’s over."
After his retirement as chairman and CEO of Lockheed in 1997, Augustine helped found In-Q-Tel, the venture capital firm that supports the intelligence community through investment in advanced technology. He has more honors to his name than just about any industrialist: the National Medal of Technology, the Joint Chiefs of Staff Distinguished Public Service Award, and the Distinguished Service Medal, the latter of which he received five times. He published a book of his ‘laws’ – those often tongue-in-cheek, sometimes cynical, always insightful nuggets of wisdom, which perhaps shed more light than anything else on the man, versus the official and executive.
And of course, beyond his industry experience, he spent two stints in the Pentagon at a time when the two way street between industry and government was encouraged.
"What is sad is, for the most part, the executive branch today does not recruit people like Norm to come into government, and if they did it is now almost impossible for them to get through the executive branch and Senate Armed Services Committee conflict of interest requirements," said Arnold Punaro, CEO of The Punaro Group, and member of the Defense News advisory board. "And people who have the engineering and technology expertise are needed more than ever."
This article is part of a larger Defense News 30-year anniversary project, showcasing the people, programs and innovations from the last three decades that most shaped the global security arena. Go to defensenews.com/30th to see all of our coverage.
Jill Aitoro is editor of Defense News. She is also executive editor of Sightline Media's Business-to-Government group, including Defense News, C4ISRNET, Federal Times and Fifth Domain. She brings over 15 years’ experience in editing and reporting on defense and federal programs, policy, procurement, and technology.
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