John Casper has served as vice president of finance and business operations for Lockheed Martin’s electronic systems business since June 2011.
Before joining Lockheed, Casper worked as a financial executive at a number of companies, spending time as a VP at Eastman Kodak, VP and CFO at Osmose Holdings, VP at ATK Space Systems, CFO at Ultralife Corporation and most recently COO and CFO of Event Photography Group.
Casper recently caught up with ExecutiveBiz and spoke about the international growth of Lockheed’s electronic systems business, how the contractor will navigate upcoming defense budget cuts and the ‘space fence’ prototype, which is meant to track and catalogue orbiting space objects.
ExecutiveBiz: What is it like to move back into the GovCon industry? Are there particular lessons you gained from previous stops that have helped your transition into your current role?
John Casper: It’s relatively easy when one understands the language of business and finance. The most significant lessons in business result from times of adversity. It’s easy to look good in business when the economy is good, sales are rising, and your product is in demand. The more challenging times are those of adversity, often created by changes in market forces or customer desires.
One such example is fixing a business model that has either changed or failed. For instance, when I worked at Kodak, it was the conversion of our business model from one that worked well in the chemical imaging world, to a new model which required significant adaptation to be successful in the rapidly expanding digital imaging market. At that time, it meant living with investments in new product lines that produced lower returns in the digital market, compared to the high-margin chemical imaging consumable business which was in rapid decline. Perhaps the most important lesson I learned was that business models are far easier to change than the associated business culture required to ultimately make those models successful.
ExecutiveBiz: Lockheed’s incoming President and Chief Operating Officer Marillyn Hewson recently told AOL Defense that Lockheed will pursue opportunities in international markets to generate revenue in a time of U.S. defense cuts. How is the company actively pursuing gains in those markets, and which country or countries show the most potential for international growth?
Casper: International growth is an area of significant focus within Lockheed Martin and the electronic systems business area. In 2011, international sales accounted for approximately 26 percent of the Electronic Systems total – more than half of the corporation’s total international sales. We see the greatest areas of growth potential for our products and services in the Asia-Pacific region and in the Middle East. Our missile defense portfolio, sensors and programs like the Littoral Combat Ship, are of considerable interest to countries seeking to address their security needs while expanding partnerships with the U.S.
ExecutiveBiz: The Defense Department is facing budget cuts of around $500 billion over the next 10 years. How is the Lockheed adjusting to these budget cuts, and what measures is it taking to preserve economic prosperity throughout this tough time?
Casper: Across the corporation, we’ve reduced our overhead, constrained capital expenses and consolidated facilities. We’ve removed 1.5 million square feet from our facilities’ footprint, and expect to reduce further before the end of 2014. We’ve taken the painful but necessary steps to reduce our workforce by 26,000, representing an 18 percent reduction from just three years ago. These are just a few examples of the ways in which we have adapted and responded to market changes in order to remain competitive for our customers. We will continue to remain focused on the need to be affordable, efficient and highly effective in our programs going forward.
ExecutiveBiz: Lockheed is engaged in a wide variety of large government contracts, including the F-35 aircraft, NASA’s Orion spacecraft crew module, and various military weapon contracts. What do you feel the proper next step is to expanding, placing more emphasis on a specific service or solution, or maintaining Lockheed’s current operating structure?
Casper: We are committed to servicing our products throughout their lifecycle and successful sustainment periods so that we can continue an ongoing relationship with our customers to support the long-term life of the hardware and software solutions that we sell and install. Along with further international expansion, areas which represent growth opportunities include products and solutions within cyber security and unmanned autonomous systems; both of which are in strong demand. These are examples of areas where we are going to continue to expand our reach beyond the core space and aircraft solutions that Lockheed Martin has created and delivered in the past. Similarly, missile defense and advanced sensor technology are another area of ongoing innovation.
A final example of significant innovation is our Space Fence prototype, which is currently tracking and cataloging orbiting space objects. With more than 60 nations operating in space today, the final frontier is far more complex than when current systems started tracking a few hundred objects in the early 1960’s. With hundreds of thousands of objects in earth orbit, space debris and the associated risk of potential collisions threaten space-based assets and critical systems that merit protection. Our ability to innovate has been a hallmark of the corporation for 100 years, and we look forward to meeting the important and changing needs of our U.S. and international customers well into the future.