Lockheed Martin, the world’s largest defence contractor, has traditionally been reliant on its mega contracts with the United States Department of Defense and other US federal government agencies. However, the company has military customers all over the world, which are increasingly requiring a broader range of services.

The president of Lockheed Martin International’s Middle East and Africa business, General James Jamerson, says that Africa is a growth region for the company, largely because of its acquisition of California-based international services company Pacific Architects and Engineers in 2006. “PAE was well-established in places we were not and helped us to grow our international services sector business,” he says.

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From defence to security

At one time, Lockheed Martin’s reputation would be confined to defence, ships, guns, tanks and aeroplanes. “Defence has now become security, a much better term, which includes everything from human to resource security,” says Mr Jamerson. The growth in homeland security services, which includes surveillance of borders, biometric tools and data and radar data, for example, has played to one of the company’s central capabilities. “Our strength is that we are able to take complex data sources and integrate them into useable information,” he says.

And security covers a broad spectrum of services, which Lockheed Martin is endeavouring to deliver worldwide. The acquisition of PAE brought with it expertise in running United Nations refugee camps in Darfur, Sudan, and providing services for US embassies globally.

Business challenge

One of the main business challenges of working in the Middle East and Africa, according to General Jamerson, is structuring a good business deal. In Turkey, he says, the F35 joint strike fighter programme is a classic example of how the company has worked successfully with Turkish industry as partners. “We were pleasantly surprised because two or three years ago we might have thought there was not sufficient capacity in Turkish industry to do some of those things,” he says.

Rather than working on a traditional process of offset programmes from the local government, the F35 programme worked on the basis of best value. “You can compete to be on the joint strike fighter programme but you have to be the best value in whatever it is you are competing on, because that’s the only way we can keep the costs down and keep the price of the aeroplane where we need to keep it,” says Mr Jamerson. The system means suppliers must continue to perform to the same standard over time. “You may win the work and then you have to keep up your end of the bargain,” he says.

Expansion in the Gulf

Lockheed Martin has been expanding in the Arabian Gulf as well as Africa. The move was driven by security conditions in the world coinciding with huge infrastructure growth leading to new business opportunities.

But there are and always have been skills issue in operating in the Middle East and Africa, according to General Jamerson. “The Gulf has a surprisingly broad offering of skills if you dig deeper,” he says. And in Turkey, the government has set up some very effective programmes for high school children to improve general skills levels. “We have the effect of raising skill levels in whichever region we operate,” he says.

COMPANY PROFILE

LOCKHEED MARTIN

Headquarters

Bethesda, Maryland, US

2007 turnover

$41.86bn

Business activity

Space and defence, communications and electronic components