WASHINGTON ― L3 Technologies continues to make massive changes to its personnel and portfolio as the company attempts to become the “sixth prime” contractor.
Christopher Kubasik, who took over as L3 president and CEO in January, has overseen a number of changes, including the recent $540 million sale of Vertex.
“I’d say we’re more than halfway through on the changes,” he said during a May 1 earning call. “I think by the end of this calendar year, we’ll have the entire team in place and ready to go. But I’d say its 70 percent to 80 percent already done.”
Most recently, L3 hired Melanie Heitkamp to chair the company’s human resources department as senior vice president and chief human resource officer. The company also brought on John Kim as vice president of investor relations and analytics.
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Kubasik hopes more international partnerships will allow L3 to capitalize on increased interest in sensor and communication technologies.
“Internationally, we visited customers in Taiwan, Japan, Singapore, Saudi Arabia and the United Arab Emirates,” he said. “There is a lot of entrants, especially in the Mideast for ISR platform[s]. ... And of course that’s in our sweet spot.”
But there is also domestic interest in these technologies. “Every time I’m in the Pentagon, the discussion on multidomain and control is on the top of everybody’s mind, and I think we’re uniquely positioned to help in that challenge” Kubasik said.
So how is L3 going to become the sixth prime? For Kubaisk, its all about getting more contracts.
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“The No. 1 way to improve margins in my opinion has always been to increase the denominator and to grow. And I think volume is the best way to improve your profitability,” he said. “That’s why we’ve rolled our disciplined growth strategy, and myself and my team and others have been aggressively out there meeting with customers, both as a supplier to the primes and directly to the end users, to try to jump start the growth.”
One area where L3 is looking to expand is in unmanned underwater vehicles. It’s been suggested the company will procure its own shipyard to solidify its position in this emerging market.
L3 has also tried cut costs where it believed it was opportune to do so. The company eliminated 140 positions from its Salt Lake City, Utah, facility earlier this year. These cuts and other restructuring efforts contribute to the $30 million the company anticipates to incur in severance expenses this year. L3 believes half of these expenses will be offset by cost savings from restructuring.
Daniel Cebul is an editorial fellow and general assignments writer for Defense News, C4ISRNET, Fifth Domain and Federal Times.
