Lockheed Martin’s Marillyn Hewson: 2018 CEO Of The Year

And risky. You deal with technical risk, scientific risk, political uncertainty—and you do so on a global stage. What’s your assessment of geopolitical risk at this point in history?

Most of our customers are governments, 99 percent of our business. So I travel a lot, and I talk to a lot of those leaders, and what I hear from them is that this geopolitical environment we’re in today is probably more unpredictable and chaotic and uncertain than they’ve ever faced in the past. It is a very challenging environment, and it’s accelerating. This is my sixth year as CEO, and every year I step back and reflect on it, I can’t believe I’m saying this, but it’s even more unpredictable than it was before.

Even in Europe, they have Russia’s assertiveness in that theater. They have the influx of refugees coming out of Syria and other areas that they’re dealing with terrorist and non-state actors. So it’s not just one situation where you have one great power against another great power. This is very asymmetrical; it’s intercontinental; it’s all very unpredictable and challenging. And that’s the difference I see. I’ve been with this company 35 years, and this really is different. This is very different.

What’s your take on the Trump administration’s policy on trade? It’s hard to tell what it is sometimes, and our polling of the CEO community is very split.

We’re a big proponent for free trade. I believe trade does drive the world economy. It’s important for our economy. I do share the concern that we want to make sure that we have agreements that are fair. One of the things that’s most important to us in the aerospace and defense industry is protection of our intellectual property. We don’t do a lot of trade in China because of the work we do, but I know companies that do. [China’s] desire to take all of their intellectual property if they’re going to do work there, those are concerns, those are unfair relationships that need to be addressed.

At the same time, the whole issue around NAFTA, around TPP, the need to have these multilateral agreements and things of that nature are worthy of really understanding and moving forward on.

How have you found dealing with the current administration different from other administrations? How is Washington changing under the new administration?

I think what’s different with this administration, for at least my time in my role, is the focus on reducing regulations, making it more competitive for us on the world stage [and] getting our tax rate at a reasonable level, [allowing us to] look at the infrastructure we need to get in place and really focus on economic growth.

For the president’s first meeting in the White House, he invited 12 to 15 CEOs, I was among that group, and his question was, “What can I do to reduce the barriers for you to create jobs and drive your businesses?” That was hugely welcomed, and he went around the room and let each one of us share what would make a difference. I spoke up about regulation, because I think it’s been a huge impact on small and medium-sized businesses, not just large businesses like Lockheed Martin.

“For the president’s first meeting in the White House, he invited 12 to 15 CEOs, I was among that group, and his question was, “What can I do to reduce the barriers for you to create jobs and drive your businesses?” .”

What’s it like to negotiate with the President?

I won’t say I negotiated with him. I think he encouraged us to get to an agreement between the U.S. government and Lockheed Martin on the lot [of F-35s] that we’re in the midst of negotiating. So he certainly had an impact on that and accelerating those negotiations and his focus on making sure the American people got a good price. I would say those were elements that encouraged the negotiation to get completed.

With the F-35, that’s 25 percent of your business. How do you manage risk like that? How do you handle it on a day-to-day basis?

For me personally, as a CEO, it’s something I engage a lot of my own personal time in. I have regular reviews on the program; I spend time in Fort Worth where we have the final production of the aircraft. I travel to different sites where the work is done, and I meet directly with our leadership team on it.

I’m working directly with our customers and listening to them on what their concerns are so that we can address them. I’m out around the world because remember, this is a program with not just the three services within the U.S. government buying the aircraft—the Air Force, the Navy and the Marine Corps. In addition, we have eight international partners.

Not only is it our largest program relative to our revenue, it’s also the largest program in the Department of Defense. It gets a lot of scrutiny by Congress, it gets scrutiny by the administration, scrutiny by the Department of Defense, by the media. It’s always front and center.