Newly created Lockheed Martin Corp., the nation’s largest defense contractor, announced plans Monday to eliminate 12,000 jobs and close 12 facilities in hopes of saving $1.8 billion.
The company, formed March 15 by the merger of the Lockheed Corp. and Martin-Marietta Corp., employs about 170,000 workers worldwide.
In addition to the plant and laboratory closings, the company said it would eliminate 26 duplicative field offices in the United States and overseas. The consolidation will be carried out over the next five years.
About 5,000 jobs will be eliminated this year and 3,000 more in 1996. Another 4,000 in job losses will be spread over the remaining three years of the consolidation.
The layoffs will be in addition to the 7,000 jobs already eliminated this year as part of previously planned actions the company said reflected changing business conditions and increased productivity.
“This consolidation plan dramatically improves our competitiveness,” Daniel M. Tellep, chairman and chief executive, told reporters. “It creates new economies of scale, capitalizes on corporate-wide synergies and leverages our added financial strength to build a stronger corporation.”
Tellep acknowledged at the news conference that sharp cuts in defense spending and in NASA budgets played a large role in the consolidations.
Four major space facilities are being merged into two, located in Denver, Colo., and Sunnyvale, Calif. Commercial, civil and military space activities now in East Windsor, N.J., and Valley Forge, Pa., will be reestablished in Sunnyvale.
The plan also calls for eliminating an ocean, radar and sensor systems facility in Utica, N.Y., and consolidating the programs into a single facility in Syracuse, N.Y.
Before the merger, Lockheed and Martin-Marietta were the second and third largest Pentagon contractors, after McDonnell Douglas Corp.
Tellep said the two companies had a combined work force of nearly 250,000 as recently as 1987. About 40,000 employees working at Department of Energy facilities are unaffected by the consolidation plan.
“We have great concern for employees who are going to be impacted by this plan,” Tellep said. “Equally, though, we have an obligation to the vast number of employees who will remain with us.”