Summit Notebook

Lockheed Martin bracing for a new reality

Lockheed Martin CEO Robert Stevens says despite cost cutting, the defense industry will survive based on new global security needs and adds that Lockheed’s portfolio is well positioned for change.

AIA CEO Blakey says she’s got Jet-A in her veins

Aerospace Industries Association Chief Executive Officer Marion Blakey says when she started working on aviation issues earlier in her career she was hooked.

She has held a number of prominent positions in Washington that emphasized transportation and safety.

“If you sort of want to look at the thread, that’s the thread,” Blakey said in an interview at the Reuters Aerospace and Defense Summit.

“And it took me into aviation. And you get Jet-A  in your veins and it’s over,” she said with a laugh.  (For those not in the know Jet-A is jet fuel.)

“It’s pretty addictive.”

Blakey took her interest in transportation safety to a level not seen by most people and was head of the Federal Aviation Administration and the National Transportation Safety Board during the Bush administration.

“Life is a series of opportunities and you rarely see yourself as others see you,” Blakey said. “It’s building on strengths, personal characteristics, and interests and training. But it all comes together often in things that there’s no way to predict.”

EADS O’Keefe sees corporate life similarities to government, academia

He’s been head of NASA, the Navy, and Louisiana State University and spent practically his whole professional life in either government or academia.

So when it came time for the next step on a varied career path, Sean O’Keefe broke from the past and chose the corporate route.

Since Nov. 1 he has been EADS North America’s chief executive officer and seems quite comfortable in just six weeks rattling off the company’s position on 373 requirements for a Pentagon tanker contract.

In an interview at a Reuters Aerospace and Defense Summit, O’Keefe said he found similarities among the corporate, government and academic sectors.

“It is a terrific opportunity to bring a different perspective from that checkered background of experiences to a set of opportunities,” he said.

“There are common elements to it,” O’Keefe said. “It’s very much how do you look at technology choices and where your confidence is and how do you want to pursue that for market opportunities. It’s all just different ways of defining it.”

But there is one difference, and it’s a big one — the quarterly earnings report card for publicly traded companies.

Would you send a postcard of Boeing’s new Dreamliner?

For some fans, Boeing’s first test flight of its new 787 Dreamliner this week was apparently a virtual postcard.

The aerospace company says people sent about 25,000 postcards electronically of the lightweight commercial plane made primarily from carbon-based plastics and titanium.

About 1 million people logged in to watch the take-off and landing, observing the long-delayed first flight from about 13,000 cities and about 200 countries, the company says.

Dennis Muilenburg, chief executive officer of Boeing Defense Systems, watched from St. Louis — about 2,000 road miles from Seattle where the flight happened — in a Webcast meeting with about 100 employees who had a live feed from the event.

“I can tell you we all took great pride in seeing that first airplane get into the air. And I’ve been working in this business for 20-some years and one of the best things about this business is being able to witness a first flight. There’s nothing else like it,” Muilenburg said in a telephone interview at a Reuters Aerospace and Defense Summit.

“And yesterday’s event just reinforced one of the great aspects of our business, and that’s being able to see a first flight. I saw it virtually yesterday, but I can tell you we all paused to enjoy the moment,” he said.

Goodrich CFO saw transformation from tires to aerospace

Goodrich Corp. Chief Financial Officer Scott Kuechle recalls when he first started at the company about 25 years ago the firm was mainly in tires, commodity chemicals and industrial products. Aerospace defense was a “very small” component buried in its industrial business.

“It was really visionary by some of the leaders back then to understand what of those industries were really going to survive and thrive in the next generation of workers and where the economy was going,” he said in an interview at a Reuters Aerospace and Defense Summit.

“And they had the foresight to basically sell off about 90 percent of the company and reinvest that along the way in the areas that actually could grow and could be sustainable long term,” Kuechle said. “It was an incredibly gutsy move to take the core of the company and basically reinvent it along the way.”

Kuechle called the transformation exciting to watch and described it as “an underappreciated reinvention of an American company.”

But in those early years he said he never thought he would one day be a CFO of a large aerospace and defense company.

“You always have dreams,” he said with a laugh. “But no, this has exceeded my expectations by a lot, but very satisfying.”

Photo credit: Reuters/Molly Riley (Kuechle at Reuters summit)

Rockwell Collins CEO: ex-fighter pilot sees need for pilotless aircraft

On the surface, it would appear that a fighter pilot would have little interest in a remotely piloted aircraft, which more and more are being used in wars for reconnaissance and firing missiles.

It isn’t too big a leap to wonder whether in the future perhaps drones will take away jobs from fighter pilots.

But Rockwell Collins Chief Executive Officer Clay Jones, a former fighter pilot, says there is room for both.

“Technology marches on. Obviously I have a great affinity for keeping a human in the loop. And I think a human will always be in the loop in some aircraft because there are certain missions that require a human to make judgments, and to do what only a human being can do, in the say heat of battle,” he said in an interview at the Reuters Aerospace and Defense Summit.

“I mean it’s hard to see a UAV having enough situational awareness to do a dogfight, as an example,” Jones said. “However, unmanned aerial vehicles have certainly proven their merit in a number of missions, like reconnaissance.”

“So I think that there’s a clear opportunity for both types of systems to exist in the force structure,” Jones said.

Jones flew F-4 and F-15 fighter jets from 1972 to 1979 in the post-Vietnam period, he did not see combat. He still very much has the straight-shouldered posture of a fighter pilot and can’t hide his delight at how “very, very cool” the holographic image looks on the helmet visor of the F-35 which with the turn of the head will guide the radar. “Real Buck Rogers stuff,” he enthused.

L-3 chief Strianese: “I was not born a CEO”

The Chief Executive Officer of L-3 Communications says he’s a “city kid” from New York who worked his way up from loading trucks in the Bronx as a college student to being in charge of  a large U.S. defense contractor.

And so he takes exception when people demonize CEOs just for the sake of it.

“We went though a period of time where CEOs were cast as the villains of the earth,” Michael Strianese said in an interview at the Reuters Aerospace and Defense Summit.

“And I found that very troubling since I worked my entire life from loading trucks in Hunts Point in the Bronx when I was in college, to doing my homework on the subway. ”

“So I was not born a CEO, I worked truly from the ground up in this company, and I’m very proud of that accomplishment,” Strianese said.

Strianese made the transition to CEO, of what is now the Pentagon’s 8th biggest supplier of prime contracts,  from chief financial officer after the death of Frank Lanza, one of the company’s founders, in 2006.

“Do I like it better? I can’t say it’s not without more stress,” he said with a hearty laugh.

A drone by any other name…

The drone that was formerly known as the unmanned aerial vehicle (UAV) has a new name — the Remotely Piloted Aircraft (RPA).

Air Force Secretary Michael Donley said Air Force leadership discussed it and made a commitment to use the new term, although it does take some getting used to. “The more we use it, the more comfortable we get with it,” he said in an interview at a Reuters Aerospace and Defense Summit.

There was a reason for the name change. “To recognize more clearly that these systems are not unmanned, that there is a pilot, there is a sensor operator,” Donley said.

The Air Force wants to impress on the Federal Aviation Administration and the aerospace community that manages the air in the continental United States “that we’ve got positive control over these vehicles,” Donley said.

As for the requirements to fly the unpersonned aircraft, those are still developing.

“It’s not just video gaming but you have to have piloting skills to operate these aircraft and we want the operators to be certified in an FAA-like system going forward,” Donley said.

“It’s not just a flat screen, you’ve got to have flying skills that go with it,” he said. Do they need the high-performance fighter training? “Maybe not,” Donley said.

Pratt and Whitney’s Hess: corporate jets got bad rap

Pratt and Whitney President David Hess says corporate jets got a bad rap from Washington and the rhetoric hurt the industry.

Remember the furor over automakers arriving for congressional hearings late last year in corporate jets to ask for bailouts? And how President Barack Obama and his administration was publicly angry that Citigroup was purchasing a $50 million plane while receiving government funds from the Troubled Assets Relief Program.

Well all of the rhetoric hurt the corporate jet industry, Hess said in an interview at a Reuters Aerospace and Defense Summit.

“Some of the criticism of the business jet industry was very unfortunate early this year. That’s a great industry that employs hundreds of thousands of people in the U.S.,” Hess said. Companies that make corporate jets have lost jobs and their suppliers have been affected like Pratt and Whitney Canada which is expected to see engine deliveries down about 20 percent this year, he said.

“I think there was a lot of rhetoric from the current administration that vilified the industry and people who use business jets which I think was very unfortunate,” he said.

It wasn’t just the political environment and the rhetoric, he acknowledged.

“Typically, business jet deliveries follow corporate profits. They track pretty closely. so clearly the industry would have suffered because of the economic downturn,” Hess said.

Lockheed CEO: “Not miffed” over Obama nixing presidential helicopter

President Barack Obama was quite blunt earlier this year about a  new fleet of presidential helicopters being built by Lockheed Martin Corp., citing it as an example of the procurement process “gone amok.”

And he axed the program, forcing the defense contractor to stop development of the helicopter in mid-air, so to speak.

But Lockheed Chief Executive Officer Robert Stevens says no hard feelings.

“I am not miffed at the president,” he said in an interview at the Reuters Aerospace and Defense Summit.

“I think the responsibilities that accrue to the president of the United States are well beyond my own personal experience of the responsibilities that come across my desk,” he said.

“There are going to be changes of priorities, our job is to get alignment with our customers, understand what the emerging priorities will be,” Stevens said.

He rattled off a number of programs that are supported by the Obama administration such as tactical aircraft. Lockheed is also keen to participate in a “winner-take-all” competition in 2010 for a combat ship, he said.