Global Supply Chain Deed Signed Between Lockheed Martin Corporation and the Australian Government

CANBERRA, February 16, 2011 – Lockheed Martin Corporation [NYSE: LMT] has today announced its signature of a Global Supply Chain (GSC) Deed with the Defence Materiel Organisation (representing the Australian Department of Defence), which is designed to create a new environment for Australian-based suppliers to gain access to the Corporation's global supply chain (GSC).

The GSC Deed was signed in Sydney on January 18, 2011, by The Honourable Jason Clare, MP, Australian Minister for Defence Materiel, and Paul Johnson, CEO of Lockheed Martin Australia Pty. Ltd. (representing the Corporation), in the presence of James R. Gribbon, President, South Asia for Lockheed Martin Global Inc.

Under the terms of the GSC Program, a dedicated Lockheed Martin team will work to identify business opportunities for Australian companies, both within its own operating companies and its external supply chain. The industrial capacities of Australian firms will be progressively assessed and evaluated, and then considered for the preparation of bids for work opportunities on merit, as determined by best value benchmarks set against other globally competitive options.

Johnson noted that while the project Air 6000 Joint Strike Fighter (JSF) acquisition was excluded from the terms of the new Deed, “experience gained since 2002 in structuring that program – which has already delivered over A$220 million of work to local firms - has been critical in helping the Australian Government develop its new GSC participation arrangements, which are a key element of the overall Australian Industry Capability (AIC) program.”

“Insights gained into the capacities of local firms over the past eight years in bringing forward our Australian JSF Industry Plan, will help us to rapidly implement the new Deed,” said Johnson, noting another arm of the Corporation would shortly release a request for information for a critical piece of aerospace hardware relating to a current naval helicopter bid. “Substantial opportunities for local suppliers also lie ahead on phase 4 of project Land 121, should Lockheed Martin’s Joint Light Tactical Vehicle (JLTV) be ultimately considered the most cost-effective option for Australian Army requirements,” he added.

Johnson said that in advancing the Australian F-35 program, Lockheed Martin “had already seen constructive working relationships established with a wide range of Australian technology and industrial suppliers. To date, some 23 of these entities have successfully proved they can meet and beat international competition to achieve recognition as reliable suppliers into our Joint Strike Fighter Program”.

By virtue of winning JSF related contracts, Australian companies automatically become registered on Lockheed Martin’s global supply chain network, and - under the new GSC Deed – will immediately be queued for consideration on other production contracts not specifically JSF related. In this way, operation of the GSC Deed works to compound activities within the Corporation’s supply chain environment for the identification of new business areas, and therefore, substantially improve the prospects for Australian suppliers in their quest to develop long-term business in the international marketplace.

Four key areas in which the Australian Government and the Corporation will co-operate under the GSC program are:

(i) the identification of opportunities for Australian industry to bid into global supply chains across all Lockheed Martin business lines;
(ii) assisting Australian companies to become more competitive in the world market by way of mentoring senior managements, and brokering GSC contacts;
(iii) providing agreed training in relation to GSC initiatives, and assessing potential opportunities for appropriate technology transfer; and
(iv) committing to undertake timely Program Management Reviews with the Australian Government, to both assess performance to date, and opportunities to improve the overall utility of the GSC Deed.

Under the terms of the GSC Program, the DMO will provide a three-year funding package to support GSC business opportunity identification activities.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 132,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation’s 2010 sales from continuing operations were $44.8 billion. Lockheed Martin Australia is a 100% subsidiary of the parent company employing over 600 staff throughout Australia.