Lockheed Martin, Boeing Agree To Shift All Joint Venture Hellfire Operations to Lockheed Martin
ORLANDO, FL, May 20th, 1999 -- Lockheed Martin and Boeing have agreed that Lockheed Martin Electronics & Missiles will assume responsibility for all Hellfire missile operations previously combined under the Hellfire Systems Limited Liability Company (HSLLC).
The consolidation covers manufacturing of the AGM-114K (Hellfire II) and worldwide logistical support for both the AGM-114F and K model Hellfire antitank missile systems. Production operations at Boeing's Duluth, Georgia plant, which is being closed, will be shifted to Lockheed Martin's production facility in Ocala, Florida. Lockheed Martin's Pike County (Alabama) missile facility will continue to perform final missile assembly. Lockheed Martin will also take over Boeing operations at the Anniston (Alabama) Army Depot which supports Hellfire customers around the world.
Lockheed Martin and Boeing (then Rockwell International), formed the HSLLC joint venture in 1995. Prior to that time, the companies had separately built, supported and marketed the Hellfire systems: Lockheed Martin the AGM-114K; and Boeing the AGM-114F. Lockheed Martin will continue to build and support Hellfire under the HSLLC business entity to simplify the transition.
"This agreement continues an industry streamlining process for the Hellfire system that began when our companies joined forces in 1995," said Thomas A. Goslin, vice president of Missile Systems at Lockheed Martin Electronics & Missiles. "We've worked hard with Boeing to ensure an effective and seamless transition of operations."
Added Michael T. Boyce, vice president and general manager of weapons programs, Boeing Military Aircraft and Missile Systems, "The Hellfire program has evolved to a point where it's simply inefficient to divide manufacturing and logistics operations. This agreement ensures the continued success and satisfaction of Hellfire customers and optimizes the business plans for both Boeing and Lockheed Martin."
The laser-guided Hellfire missile has sustained its reputation in peace and war as the world's most accurate and reliable helicopter-launched antitank weapon. Recent upgrades to incorporate an antiship version as well as ground and sea-launched derivatives attest to its versatility.
Boeing Military Aircraft and Missile Systems produces a variety of high quality, cost-efficient defense systems for U.S. and international customers. It is headquartered in St. Louis, Missouri.
With headquarters in Orlando, Lockheed Martin Missiles and Fire Control is a world leader in electro-optics, smart munitions, anti armor and air defense systems. The company is an operating element of Lockheed Martin Electronics Sector, based in Bethesda, Maryland.
Q1: What were the financial arrangements for this buyout?
A1: Financial agreements are considered privileged business information by both companies.
Q2: What was the workshare and financial share under the joint venture?
A2: Approximately 80% (Lockheed Martin)/20% (Boeing) in both cases.
Q3: What will be the employment impact for both companies? What will happen to Boeing employees assigned to Anniston and field logistics facilities?
A4: Employment impact will be minimal. Lockheed Martin has agreed to make every reasonable effort to continue employment of Boeing personnel at Anniston and at field logistics facilities.
Q4: Aside from the Boeing Duluth plant, will any facilities be closed/consolidated as a result this action?
Q5: What Lockheed Martin and Boeing facilities currently support the Hellfire Systems program, and what are their employment levels?
Lockheed Martin Electronics & Missiles, Orlando Approx. 135
Lockheed Martin Ocala (Florida) Operations Approx. 180
Lockheed Martin Pike County (Alabama) Operations Approx. 35
Boeing Duluth, Ga. Facility Approx. ____
Boeing Anniston (Alabama) Depot Approx. 5
Lockheed Martin Field Support Facilities: Approx 5Boeing Field Support Facilities:
Q6. Why are you reversing an organizational decision made only four years ago? What has changed?
A6. Each decision reflected market-driven requirements to consolidate manufacturing and support operations at different times in the evolution of the Hellfire program. In 1995, the market for the Hellfire and Hellfire II missiles had reached a point where it made no sense for both Lockheed Martin and (then) Rockwell to operate independently. Hellfire I was largely sold out, and the U.S. buy for Hellfire II was well along. It was therefore in the interest of both companies and Hellfire customers to bring those operations together. Since then, Hellfire II has largely transitioned to the overseas market, with reduced manufacturing, and focus on system derivations (i.e. ground launched/anti-ship). Meanwhile, Rockwell was acquired by Boeing which, as part of a consolidation initiative, decided to close the Duluth facility. It therefore made sense to continue the program?s consolidation under one company.
Q7: Is the decision to retain the Hellfire Systems Limited Liability Company structure purely one of administrative simplification, or might Boeing return as an active partner at some time.
A7: Boeing has indicated that it has not ruled out a possible future role in the Hellfire program.
Q8: How does this decision affect or relate to future versions of Hellfire ? Hellfire III and advanced Hellfire?
A8: Since these programs have not yet matured, it is difficult to speculate about the extent to which current Hellfire configurations might apply. One advantage of maintaining Hellfire Systems LLC is that it offers both companies options that can be evaluated once future requirements are defined.
Q9: Does Boeing retain any interest at all in future sales of Hellfire I and II?
A9: Yes. By mutual agreement, and in consideration of Boeing?s investment in the program under the joint venture, Boeing will receive from Lockheed Martin a fee-per-missile for future U.S. and international sales. Details are considered privileged business information. In addition, Boeing will support order opportunities and contracts requiring its RBS 17 launch system.
Nettie Johnson, 407-356-5351e-mail firstname.lastname@example.org