Watson Institute for International and Public Affairs

Author Sees Defense Contractor Embedded in US Government

March 17, 2011

“Lockheed Martin has morphed into a multi-faceted conglomerate that works for almost every agency of the federal government – the Pentagon, the CIA, the NSA, the FBI, Department of Homeland Security, the Census Bureau, and others,” said William Hartung, of the largest defense contractor in the world. As the first speaker in the Institute’s new Eisenhower Farewell Speech Series, Hartung, director of the Arms and Security Initiative at the New American Foundation, analyzed the embeddedness and influence of Lockheed Martin in our society, to provide his view of the military-industrial complex in the United States. He recently published a book on the company, Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (Nation Books, December 2010).

The tale of the huge conglomerate began in the first half of the 20th century with two brothers, Allan and Malcolm Lockheed, who had been quite taken by the Wright Brothers’ achievements, explained Hartung. However, after a few bankruptcies and mishaps, the company found its way into the hands of Robert Gross, who ironically wanted to refrain from working with the state war department. However, after recognizing this economic impracticality, Gross said to one of his colleagues, “I guess we’re going to have to get into the business of making war machines for the government,” quoted Hartung. 

After witnessing dramatic growth during World War II, followed by “those short, appalling weeks” of demobilization and decreased business, Gross realized that the company needed to market itself differently in order to succeed. As a result, Lockheed promoted itself as “the arsenal of a new sort of global policeman strategy for the United States,” said Hartung.  Gross argued that in order to commit to dealing with all future armed aggressions against the peace of the world, there would need to be a means to provide articles of war, such as ammunition and men, to places quickly all around the world. “So to play the role of a global policeman, we need to buy more transport planes from Lockheed,” summed Hartung.

However, in conjunction with its growing presence, Lockheed also acquired, “the most notorious record of any weapons contractor, of corruption, cost overruns, getting corporate welfare from the government, and bribery,” said Hartung. In the case of Lockheed’s failed C-5A plane, production ran $2 billion over budget, and the whistle blower, A. Ernest Fitzgerald, was immediately fired, he said. Hartung described the F-22 combat Raptor was “the most expensive fighter plane built, at $350 million a copy, which had no apparent purpose.” When the F-22’s production was terminated, Lockheed received a “little payoff,” as Hartung put it – the impact of a $4 billion cut to production was tempered by a $4 billion increase to Lockheed’s F-35 production.

Moreover, when Lockheed was put on the verge of bankruptcy, because of these cost overruns and of its L 10-11 airliner troubles, he said, Lockheed became the subject of the first big corporate bailout the US government ever engaged in. Regardless of the fact that the bailout plan almost did not pass in the Senate – winning by only one vote – Lockheed returned to its typical practices, said Hartung. 

Hartung further illustrated how intertwined Lockheed was with the government, by discussing Clinton Defense Secretary William Perry’s “Last Supper.” In 1993, Perry convened a dinner with major defense executives in order to encourage them to merge with one another and “lessen the number of companies vying for one piece of pie,” said Hartung. As a result of the dinner, Martin Marietta Materials and Lockheed merged, he said. What is more: “they got the government to help pay for this,” said Hartung. Executives were given “golden parachutes,” where they received payments because of changed work circumstances, and certain costs were covered, such as closing down plants, among other measures. 

Lockheed currently funds like-minded think tanks and continues to give “party favors” to supporters in Congress, through such means as donations to cultural organizations in their states.  “They have their own morality about this,” said Hartung. “They had limits to what they were willing to do” to sell planes.

On the international stage, Lockheed has been “creating its own foreign policy,” by recruiting lawyers, building refugee camps, and sponsoring a private human rights monitoring group. “They ring in as much as they can from diplomacy and development,” said Hartung. However, while they support these “soft power” notions, the company’s bottom line is the same – doing what they can to get the maximum profits from their weapons and aircrafts.

By Watson Institute Student Rapporteur Kaori Ogawa ‘12