...Case: L-1011 By Carlos Mateos Santander LOCKHEED Case Study Recommendation I recommend to Lockheed shut down the L-1011 project in which you are involved because in a realistic scenario in which they could sell 330-380 airplanes until 1980 and taking in consideration a cost reduction base on cost “learning curve” and their financial problem in two other project (Lockheed C-5 and the cancelation of AH-56A helicopter) their NPV would be -$85 mill. In this case our recommendation would be shut down your commercial aircraft project and try to keep being one of the best companies in military aircraft. This would be hard, but with the C-5 project and future projects that the government is going to give you would be easy fix this situation. Background and information: At the en of the 60´s Lockheed has three important projects in which are: * Lockheed C-5: This is a huge airplane that Lockheed is developing for US Government but they are having problem with the final price because it was more than the price that they expected but the government doesn’t want to pay more money, but it is sure that the US government is going to buy the airplanes that they request and it is possible that in the future they will do more orders. * Helicopter AH-56A: This is an amazing helicopter that Lockheed is developing for the US army, but the cost is going up and it is possible that US government cancel because they can not support that cost for one helicopter for the...
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...2013 Lockheed TriStar Case Study Group 6 Leon Krolikowski Sitaram Koppaka Brian Manning Tushar Mahajan Ryan Maggiorini Nicholas Manning UNIVERSITY OF MASSACHUSSETS SUMMER 2013 SCH MGMT 640 PROFESSOR RAJ GUPTA Table of Contents Executive Summary 2 Introduction/Motivation 3 Data Analysis and Results 4 Conclusion 8 Appendix 9 References 10 Executive Summary Lockheed’s L-1011 Tri Star Airbus program was a long-term, capital-intensive endeavor projected to strongly position Lockheed to compete in the commercial aircraft market. The initial preproduction investments for the program were made in 1967, with continued investments occurring during the subsequent four years, until the program commenced production in 1972. However, during the intervening period, initial program assumptions began to unravel, and Lockheed, which was also a major contractor to the United States Department of Defense, was before Congress, requesting a $250 million bank loan guarantee to complete the L-1011 program. By 1971, over 80% of Lockheed’s market capitalization had already been lost. During the ensuing debate that followed, it appeared that Lockheed had not taken due diligence in the planning for the project, and that initial unit sales and revenue estimates would fall woefully short of being what Lockheed’s CEO termed as a “commercially viable endeavor”. As the continued difficulties of the program unfolded before the public and the investment community, it...
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...Lockheed Tristar (1) Should Lockheed have pursued the Tri Star project in 1967? What are the main concerns with their analysis of the project? There are multiple different factors to look at when deciding if Lockheed should have pursued the Tri Star project in 1967. There are 6 techniques that are generally applied to assist in this decision: Internal Rate of Return (IRR), Net Present Value (NPV), Payback Method, Discounted Payback Method, Accounting Rate of Return, and Profitability Index. The most frequently used alternative capital budget methods, IRR, NPV and Payback Method, were used to evaluate this project. The Payback Method is not a useful method in its own right, but may have been unwisely used by Lockheed management in deciding on the Tri Star project, and so is discussed here. Based upon Lockheed’s numbers at 210 units (see Table A attached), the resulting NPV of the net generated cash flows is -$584 million and the corresponding IRR is -9.09%. Considering the 10% discount rate is optimistic, the actual results could be worse. The Payback Period calculation shows the project does not achieve payback in the project’s lifetime even on a pure accounting basis. There are several flaws in Lockheed’s initial analysis of the project, besides failing to properly discount cash flows to present: too optimistic projections of sales potential (estimating capture of 35-40% of the market); highly generous discount rate at 10% (considering the risk); highly optimistic growth...
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...1. Describe the firm (who they are and what they do) and the amount of business they do with the federal government. Lockheed Martin was formed in 1995 by combining the businesses of Lockheed Corporation and Martin Marietta Corporation. Lockheed is based out of Maryland and is a global security and aerospace company and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. (Lockheed Martin Corporation, 2012) Lockheed divides its services into four broad major categories: Aeronautics Electronic Systems Information Systems & Global Solutions (IS&GS) Space Systems (Lockheed Martin Corporation, 2012) Majority of Lockheed Martin's business is with the U.S. Department of Defense and the U.S. federal government agencies. Lockheed Martin is the largest provider of IT services, systems integration, and training to the U.S. Government and employs approximately 120,000 in the U.S. and internationally. (Lockheed Martin Corporation, 2012) According to Lockheed’s 2011 Annual report 82% of that year’s net sales were attributed to the U.S. Government. In 2011 Lockheed had $46.5 billion in net sales. (Lockheed Martin Corporation, 2012, p. 3) As a U.S. Army Corps of Engineers employee I have daily contact with Lockheed Martin as they are the contractor providing technical support and referred to within the Corps as the Army Corps of Engineers Information Technology or more commonly...
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...Discrimination in Employment Act (ADEA) enforced by the U.S. Equal Employment Opportunity Commission (EEOC). III. RESEARCH IN SUPPORT OF YOUR ANSWER * Jason, a 35 yr. old employee was promoted to foreman while passing over David and has been with the company 2 years. * David, a 60 yr. old employee has been with the company for 15 years with excellent evaluations. * The immediate supervisor told David that “Jason is going to places in this Company”. * When David applied for the job, the supervisor told him he was too old for the job and preferred a younger man who would be in the job for “more than just a couple of years.” CASES RESEARCHED A. Jones v. Dillard’s, Inc. Discrimination claim based on age from Gerda Byrd who alleged that Dillard’s took adverse action against them in their jobs. Alabama based case tried in 2003. In 1998 Gayferd’s Department Store was purchased by Dillard’s, Inc which she was an office and credit manager. There was no position at Dillard’s and she was placed as an assistant area sales manager to keep her at the same pay rate. She then learned the AASM position was being eliminated with no intention of ever hiring them again. In 1999 they offered her an opportunity to sell cosmetics which she declined due to lagging sales and the likelihood of termination when she couldn’t meet sales goals. She took severance pay due to the position being eliminated and took 47 weeks of pay. Byrd later discovered that one month later...
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...LOCKHEED TRI STAR Analysis & Recommendations Toby Odenheim 10‐OCT‐2013 Executive Summary With the L-1011 Tri Star program, Lockheed, well respected for military aircraft contracts, started to move into the civilian commercial aviation sector in direct competition with Airbus, McDonnell Douglas and Boeing. By 1971, having already invested $700 million in development costs, Lockheed was struggling with cash flow and sought $250 Million in federal loan guarantees, funding which was needed to complete development. Despite Lockheed’s assertion to the contrary, NPV analysis demonstrates that the project was never financially viable. However, given the sunk costs, Lockheed’s best option is to continue with production to minimize the project loss. Continuing to production yields an expected NPV loss of $584 million (assuming estimated sales of 210 aircraft) versus a loss of $900 million if production is scrapped outright. Recommendations: Secure the needed $250 million in funding to complete R&D and move into production. Pursue every option possible to boost total sales, including o Adding an option to lease the aircraft rather than purchase outright. This could help more customers afford the L-1011 thereby driving up sales on reducing unit production costs. o Pursue possible sale of the L-1011 to military and (international) government buyers, rather than focuses exclusively on the commercial market. o Attempt to voluntarily...
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...For over a year, and $26 million over budget, the FBI’s computerized Sentinel case management system is finally up and running (project was expected to be completed in September 2009 but took 2 years extra (2011) to complete), according to reports. The project started in 2006 with a $425 million budget and after several delays; it was showcased on March 2012. Sentinel, is a digital records storage system that was designed to replace old fashion paper files. The program is also a web-based interface for the FBI employees to use to gather up documentations and reviews. The systems user interface was described as an appearance similar to Microsoft’s outlook email with event calendar, and RSS feeds for keeping up to date with changes to case files and search engines. The initial bill for the project was supposed to be $425 million but ended up costing $451 million. Sentinel was supposed to be up and running since 2009 but problem arise such as Lockheed Martin's role as the prime contractor being reduced, complaints from the Justice Department and IT related issues, the project got delayed by many months and is finally up and running. Some lessons learned from the article are that one should not deploy new software on old hardware. According to one of the articles, during a four hour test, 743 users suffered two outages. The mistake was that the agency ran the test on the legacy hardware which was then forced to upgrade to a rollout. This caused many delays. Another lesson learned...
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...DEFENSE ACQUISITION REVIEW JOURNAL Joint Strike Fighter Courtesy of Lockheed Martin Corporation 172 Report Documentation Page Form Approved OMB No. 0704-0188 Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. 1. REPORT DATE 2. REPORT TYPE 3. DATES COVERED 2004 4. TITLE AND SUBTITLE N/A 5a. CONTRACT NUMBER 5b. GRANT NUMBER 5c. PROGRAM ELEMENT NUMBER The Lean Enterprise-A Management Philosophy at Lockheed Martin 6. AUTHOR(S) 5d. PROJECT NUMBER 5e. TASK NUMBER 5f. WORK UNIT NUMBER 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) Office of the Under Secretary of Defense for Acquisition Technology & Logistics 9820 Belvoir Road Fort Belvoir, VA 22060-5565 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES)...
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...Jones International University February 7, 2015 BC465: Managing Conflict in Organizations To begin this assignment I began to explore Theme 2 of the Jones International University database and an EHow website to get a better understanding of the style of conflict experienced between the Lockheed Martin Corporation and the Pentagon. I began to get a better understanding of the conflict styles by reading Theme 2; coincidentally I looked for the specific one that I thought fit the conflict style read in the article from the Washington Post—it just so happened to be 5 categories of conflict styles present. Next, I focused my attention toward the article were the conflict was first contacted by discovery and read the article entirely. I then used the EHow website to locate and read the five categories of conflict and chose “compromising style” because I remember in the article that the Pentagon asked the Lockheed-Martin Corporation to remove potential conflicts of interest within government contractors. The Lockheed-Martin Corporation did so by divesting most of two units -- in part to head off conflict-of-interest concerns. Furthermore, assertive efforts to rename the two divested units and Lockheed will also form a new business unit called Global Training and Logistics under its Electronic Systems business by combining two information systems units -- Readiness & Stability Operations and Savi Technology -- with its Simulation, Training, and Support unit (The Washington Post, 2010)...
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...partition and just shot him,” Martin recalled. “I just saw the shells go. He reloaded in front of me”. Martin ran, grabbling a radio in the process. As he ran away, calling into her radio for help, she heard another gunshot. Mike Toney had just arrived and was now the second victim. Carrie Woggerman was able to flee after the first shot, but Paul Medlen, 41, while attempting to come to the aid of Toney, was shot in the chest by Meyers just before Meyers turned the gun on himself, taking his own life. Of the three employees shot by Meyers, two survived. Unfortunately, Thacker died from his wounds. Regrettably, the shooting at the Toledo assembly plant was not an isolated incident. Just 2 years earlier, Doug Willaims, an employee at Lockheed Martin, left in the middle of an ethics meeting, went to his car, and came back with several guns. He then shot six coworkers to death and wounded eight others before committing suicide. Every year, nearly half of US workers report...
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...Personal Branding Plan Josh Barnett MKT/421 April 21, 2015 Wendy Bullock Personal Branding Plan Work ethic, reliability, and results. These are three of the important character traits that I feel separate me from other candidates when it comes to competing for a job. The time that I spent in the military is what I credit a large part of my work ethic to. From Day one in the military you are required to do everything to the best of your ability and to continue to do so until the task is completed. Even as a child, I was told that that if I say am going to do something or be somewhere, then I am to keep my word and follow through with every commitment. Once again the military further hammered in that mindset and even introduced me to the phrase; “if you are 15 minutes early, you are on time. If you are on time, you are late.” Both of these influences have molded me to value the characteristic of being reliable not only by presence but by carrying my own weight as well. The third trait that I feel solidifies my value as an employee is my ability to produce results. Of course the first two characteristics play a role in my ability to get results but I have always had a competitive nature as well. Coming from an athletic background and excelling at sports my whole life, I developed a hunger to be the best at whatever it was that I was doing. If I were to make a list of dream companies that I would like to work for, the first job that would have to be at the top...
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...LOCKHEED TRI STAR CASE STUDY 10/18/2010 Group #8 Case Write-Up Lockheed Tri Star Case Study EXECUTIVE SUMMARY Although highly regarded by the military, Lockheed sought to move into the lucrative civilian commercial aviation sector and compete with Boeing, McDonnell Douglas and Airbus. Lockheed began design and testing in 1966 on their entry, the “Tri Star”, which boasted a range of over 6,000 miles with nearly 400 passengers and speeds of close to 600 mph. They had already invested nearly $900 million in development costs. Carried by state of the art Rolls Royce turbofan engines, the L-1011 was by all accounts, a technological winner and might be the company’s ticket back to solvency. The summer of 1971 found the once formidable company on the brink of disaster. Despite the nearly a $1 billion in sunk costs, Lockheed was in need of $250 million more to bring the plane to market, but its bankers would not commit without federal loan guarantees. Spokespersons for Lockheed claimed before Congress that the Tri-Star program was economically sound and that their problem was mere liquidity crisis. However, opposition to the guarantee focused on estimated break-even sales – the number of jets that would need to be sold for total revenue to cover all accumulated costs. This case illustrates the importance of NPV analysis in capital budgeting. We examined the decision to invest in the Tri-Star project by forecasting the cash flow associated with the project...
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...four fundamental functions of management ? Answer : Managers in all organizations engage in four basic functions. These functions are generally referred to as planning, organizing, leading and controlling. Planning: Planning is the first managerial function, is the process of determining the organization’s desired future position and deciding how to best to get there. In this case Lockheed martin decided its goal and outlining strategies for achieving those goals . Example: The goal of Lockheed martin is to design and make 6000 aircraft within 40 years the total value of these is 200 billion dollar . The main strategy of the managers of Lockheed martin was naming Burbage to head the program because he credits his time as a Navy test pilot. Improving relation with BAE and Northrup Grumman as a partner was another important strategy. Organizing: The second managerial function is organizing--the process of designing job, grouping jobs into manageable units, and establishing patterns of authority among jobs and groups of job. organizational function of The managers and Burbage of Lockheed martin was made the unheard of decision to grant Northrup and BAE a 30 parcent financial and strategic share in the program and by this decision they divide the job as well as establish a patter of authority among themselves. LLeading: Leading , the third managerial function, is the process of motivation members of the organization to work together toward achieving the organization’s...
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...through the trouble of learning new things. But people are not drones and they want to be included in decision making. It is easiest to stick with what is known because that is what is comfortable; it is fear of the unknown. In order to overcome the resistance to change, the workforce must be convinced that the change is needed, the problem is real, and the change will solve the problem. There has to be constant support, so that workers can overcome the fear associated with the change. Change Initiative The change initiative that I am going to discuss is still on-going and will most likely not be completed for at least another 12 – 18 months. My company was recently acquired by Lockheed Martin. We are now a wholly-owned subsidiary of Lockheed Martin, and we will be known as Systems Made Simple, A Lockheed Martin Company. Here is a little history on the company I work for...
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...Raytheon is a company that serves the main purpose of being a U.S. defense contractor and industrial corporation that mainly focuses in manufacturing weapons, military, and commercial electronics according to Wikipedia.com (Source 1). It all started on July 1922, when according to “Raytheon.com (Source 2)” it said, “a few passionate visionaries created a high-tech venture in the shadow of a great university and developed a breakthrough product that transformed a nation.” Raytheon was established in Cambridge, Massachusetts, founded by Vannevar Bush, Laurence Marshall, and Charles G. Smith, which they named the company American Appliance Company before Raytheon based on Source 2. According to the text, “fundinguniverse.com (Source 3)” it states, “Raytheon was founded in 1922 when a civil engineer named Laurence Marshall was introduced to an inventor and Harvard physicist names Charles G. Smith by Dr. Vannevar Bush…” During the beginning years of their company, they created the S gas rectifier tube which according to “(Source 2)”, was a “device that eliminated one of the cumbersome expensive batteries that previously powered home radios.” It changed the radio into become an affordable appliance for the Americans that they used in various ways. Raytheon became one of the leading innovation company in the electronics industry according to (Source 2). During World War II, Raytheon tried to assist in the war effort. According to the website, “(Source 2)” it says, “During World War II...
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