Lockheed Told It Must Put F-35’s Success Over Profit [View all]

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http://www.bloomberg.com/news/2012-11-13/lockheed-told-it-must-put-f-35-s-success-over-profit.html

Lockheed Told It Must Put F-35’s Success Over Profit
By Tony Capaccio - 2012-11-14T05:00:02Z

Lockheed Martin Corp. (LMT) executives must put improving performance of the F-35 fighter, the Pentagon’s costliest program, over immediate profit, the military’s purchasing chief said.

“We want to know that when they come to us with an initiative or proposed solution to a problem that it’s motivated by the welfare of the program” and not “focused on a short- term business goal they are trying to accomplish,” Frank Kendall, undersecretary of defense for acquisition, told reporters yesterday at the Pentagon.

The company is in the midst of prolonged negotiations with the Pentagon on orders for the fifth batch of F-35s, and the program has faced cost overruns and testing delays. Kendall said yesterday the resignation Nov. 9 of Lockheed’s incoming chief executive officer, Christopher Kubasik, because of a relationship with a subordinate won’t hurt the company’s dealings with the Pentagon.

“Lockheed has dealt with the situation appropriately” as it’s an internal matter, Kendall said. “We are adult professionals. We come to things with our own business perspectives, and we can meet and work out deals. This stuff isn’t personal.”