Defense

Lockheed Martin's Hewson to step down as CEO

Key Points
  • Lockheed Martin said on Monday company veteran Marillyn Hewson will step down as chief executive officer, and tapped board member and American Tower Corp boss James Taiclet as her replacement.
  • Hewson became the first woman to run Lockheed Martin — America’s biggest defense contractor — and investors have reaped the rewards of her leadership.
  • Lockheed Martin has seen its stock surge more than 224% through Monday's session and its market capitalization expand to $83.6 billion from around $30 billion.
Lockheed Martin CEO Marillyn Hewson speaks prior to the arrival of President Donald Trump during a visit to Derco Aerospace Inc., a Lockheed Martin subsidiary, in Milwaukee, Wisconsin, July 12, 2019.
Carlos Barria | Reuters

WASHINGTON — Lockheed Martin said on Monday company veteran Marillyn Hewson will step down as chief executive officer, and tapped board member and American Tower Corp boss James Taiclet as her replacement.

Hewson joined the defense titan more than 35 years ago as an industrial engineer. She held more than 20 different leadership positions within the company before ascending to the top spot in January 2013.

"I know it is the right time to transition the leadership of Lockheed Martin. I'm pleased the board agreed with my recommendation. As Lockheed Martin's next CEO, Jim will lead the company forward in its next phase of growth and value creation," Hewson said in a statement.

Under Hewson, the first woman to run America's biggest defense contractor, Lockheed Martin has seen its stock surge more than 224% through Monday's session and its market capitalization expand to $83.6 billion from around $30 billion.

In addition to pleasing the company's shareholders, the Kansas native has had to navigate testy waters with America's commander-in-chief.

US President Donald Trump listens to Lockheed Martin CEO Marillyn Hewson speak during the first anniversary of the administration's Pledge to The American Worker initiative at the White House in Washington, DC, on July 25, 2019.
Nicholas Kamm | AFP | Getty Images

Before taking office, then president-elect Donald Trump lambasted the crown jewel in Lockheed's portfolio: the F-35.

A day after meeting with Hewson at his Mar-a-Lago resort in Florida, Trump announced via tweet that he asked Boeing to "price-out a comparable" jet because the F-35 program had "tremendous" cost overruns.

 

Trump's tweet knocked Lockheed's stock down about 2%, while Boeing shares were up 0.5%. At the time, the tweet shaved off about $1.2 billion of Lockheed Martin's market value.

And while the fifth-generation stealth fighter has become one of the most challenging programs in the history of the Department of Defense, in October the Pentagon announced the largest F-35 contract yet.

What's more, before the market plunge sparked by the coronavirus, the iShares U.S. Aerospace & Defense ETF (ITA) was outperforming the broader market since Trump's inauguration. It was up nearly 70% from the inauguration through mid-February. The S&P 500 was up about 50% in that time.

A naval aviator with Marine Fighter Attack Training Squadron 501 flies an F-35 above North Carolina during aerial refueling training on April 14, 2015.
Cpl. Unique Roberts | U.S. Marine Corps

Michele Evans, who took over as executive vice president of Lockheed's aeronautics division in October 2018, was widely seen as a leading candidate to succeed Hewson. Taiclet has been the chairman, president and CEO of American Tower Corp, a REIT that invests and operates telecom assets, since 2004.

He has previously worked with Honeywell Aerospace Services, a unit of Honeywell International and Pratt & Whitney, a unit of United Technologies. He was also previously a consultant at McKinsey & Company, specializing in telecommunications and aerospace strategy and operations.

Taiclet, a United States Air Force veteran, holds a master's degree in public affairs from Princeton University and an engineering degree from the United States Air Force Academy.

Lockheed said the CEO changes are effective June 15. The company also named Frank St. John as chief operating officer.

— Fred Imbert contributed to this report from CNBC's global headquarters in Englewood Cliffs, New Jersey. Reuters contributed to this report.