Leigh Munsil and Austin Wright
Lockheed Martin, the Pentagon’s largest and most diverse contractor, already nabs nearly 10 cents of every contract dollar and has long perfected the strategy of spreading jobs on weapons programs in key states and congressional districts.
Now its recent agreement to buy helicopter manufacturer Sikorsky Aircraft for $9 billion — its biggest acquisition in nearly two decades — represents not only an expansion into a new area of defense: It would also lock down one of the last remaining pieces in its already unrivaled political map.
The purchase of the Connecticut company, a sale that is widely expected to receive approval from government regulators, would stake a major claim for Lockheed Martin in New England, one of the few areas of the country where it has had relatively little presence — and few staunch political allies.
But as Lockheed continues to move into even more types of defense procurement and grows a political network that is already the envy of its competitors, some worry it means the Pentagon will have less and less leverage if its wants to terminate or even scale back one of its signature programs for technical or cost reasons. Lockheed has essentially made itself dominant on Capitol Hill – with defense jobs in virtually every state, its unprecedented corporate reach will make it even harder for scale back company programs the Pentagon may deem no longer necessary.
“Lockheed Martin looks like a classic case of a company that is too big to fail,” said William Hartung, senior fellow at the Center for International Policy and author “Prophets of War,” a recent history of the company which paints an unflattering portrait of the world’s biggest defense firm. “It supplies the Pentagon with so many kinds of weapons systems that it appears to have made itself indispensable.”
Yet, in his view, “there is no inherent reason that Lockheed needs to be as large as it is, nor should it receive special treatment on the flawed theory that it is essential to our defense industrial base that it persist in its current form.”
Lockheed Martin has employed its political heft on Capitol Hill to significant effect — most notably on its flagship F-35 fighter jet program, projected to cost more than $1 trillion in its lifetime and one of the most controversial weapons programs in history. The company boasts more than 1,300 domestic suppliers on the project in 44 states — virtually assuring widespread support. Members of Congress have read Lockheed-written talking points word-for-word in hearings. When going to bat for jobs in their districts, members of Congress resist at every turn attempts to scale back or shutter programs like F-35.
Enlisting new allies in New England will only strengthen the company’s position on the F-35 — and countless other contracts the company has or is pursuing, predicted former Sen. Joe Lieberman, who represented the state from 1989 to 2013 as a Democrat and independent.
Lockheed Martin executives and lobbyists “will get to know people in Connecticut and New England that they might not have known as well, and they can come back to them on other stuff,” he said in an interview. “I think the people in the Connecticut delegation will probably be feeling warmly toward Lockheed and even might be more receptive to their requests regarding other programs — even ones that aren’t manufactured in Connecticut.”
Indeed, joining Lockheed Martin’s camp would be a bipartisan congressional bloc that has historically been a vocal supporter of defense jobs — from the late Sen. Ted Kennedy (D-Mass.) to Rep. Rosa DeLauro (D-Conn.), who contends that the next presidential helicopter should be built by Sikorsky, located in her district.
But Lockheed Martin’s major competitors like General Dynamics, Raytheon and United Technologies, which have a far more established presence in the region, have drawn more political support there.
“Our presence in New England has been probably the least of any region in the country,” said Greg Dahlberg, who retired earlier this month as Lockheed Martin’s longtime chief Washington lobbyist. “It kind of rounds out an area where we were probably at less visibility than any other. It was a big positive for us politically.”
Lockheed Martin has been the Pentagon’s largest contractor for much of the past decade. Last year, it pulled in $25 billion worth of contracts — or nearly 9 percent of the total. In previous years its share was even higher, upwards of 12 percent. Since 2011, the company has spent $66 million on lobbying — more than any other defense firm except Boeing, which also has a large commercial business and spent $76 million, and Northrop Grumman, which spent $68 million, according to lobbying disclosures filed with the Senate.
Lockheed also ranks as one of the top five recipients of federal procurement dollars in 13 states and Washington, D.C., boasting a network of major manufacturing facilities and suppliers stretching from the South to the mid-Atlantic, Midwest and across the Rockies to California.
None of those states is in New England — and in Connecticut, the company barely cracks the top 100, according to a POLITICO analysis of fiscal 2014 contracting data.
But by acquiring Sikorsky, which employs 8,000 people in the state, Lockheed Martin would become the third-largest federal contractor in Connecticut overnight.
General Dynamics, the nation’s third-largest defense contractor, has its submarine business, Electric Boat, headquartered in Groton, Connecticut, on the state’s northeastern coast. The company also operates the Bath Iron Works shipyard in Maine.
The Pentagon’s sixth-largest contractor is United Technologies, which agreed to sell Sikorsky to Lockheed. Its corporate headquarters is in Hartford, Connecticut, and it has a research facility in East Hartford. UTC’s subsidiary Pratt & Whitney, which builds jet engines, is located in East Hartford.
Meanwhile, Raytheon, the fourth-largest defense firm in the country, is headquartered in Massachusetts and has a plant in Quonsett Point, Rhode Island. BAE Systems, the Pentagon’s eighth-largest contractor last year, employs 5,000 people in New Hampshire.
New England lawmakers have long been the recipients of campaign donations from those companies. United Technologies is a major campaign contributor to key members of the Connecticut delegation and the top contributor to Democratic Rep. John Larson, according to the Center for Responsive Politics. General Dynamics, meanwhile, is the top contributor to Rep. Joe Courtney (D-Conn.), a member of the House Armed Services Committee and a major advocate for its submarine programs.
Lockheed Martin is already focusing on lining up new political support of its own in the wake of the Sikorsky announcement.
The company will provide lawmakers with “information to further the understanding of the vital importance of our programs and capabilities to national security,” spokeswoman Katherine Trinidad said. “We look forward to continuing and deepening our relationship with the Connecticut delegation.”
Sen. Richard Blumenthal, a Connecticut Democrat, has long been a vocal supporter of key programs for defense contractors in his state, including United Technologies, the parent company of Sikorsky and Pratt & Whitney, and General Dynamics Electric Boat, which builds submarines in Connecticut. After Sikorsky changes hands from UTC to Lockheed, Blumenthal plans to keep advocating on its behalf.
“My conversations have been very reassuring, in my view, about their determination to continue producing helicopters in Stratford,” he told POLITICO. “I will continue to be an ardent and passionate supporter.”
The sale is the “best of all available options for Sikorsky,” Blumenthal added. Since Lockheed Martin doesn’t currently produce helicopters, “it will be very eager to stay in that business and maintain and enhance the workforce.”
But some worry about other implications.
“I have never known a congressperson who will oppose federal spending that provides many jobs in their district,”said Chares Knight, co-director of the Project on Defense Alternatives, a Washington think tank focused on defense reform. “What makes compelling political sense for the individual member of Congress often ends up in distorting federal spending priorities. As Lockheed Martin becomes even more dominant in the defense sector it becomes more likely that defense spending choices will be distorted by the particular business interest of this one giant corporation.”
Is Lockheed Martin too big to fail? – Leigh Munsil and Austin Wright – POLITICO.