DAVID RUBENSTEIN (DR): Since you’ve been the CEO, Lockheed Martin stock has gone up roughly 330 percent. The market capitalization is up roughly 280 percent. Another company that you compete with, General Dynamics, has a female CEO as well, Phebe Novakovic, and their stock is up about 250 percent since she became the CEO. Do you think that women can run defense companies better than men, or they can run all companies better than men?
MARILLYN HEWSON (MH): I’m just looking at the audience—how many women are out there clapping. But, David, I just say it’s a team sport. It isn’t all about me on the performance of our company. I’m really proud of what our team has been able to accomplish over the last five or six years. I’m in my sixth year as CEO.
DR: When you walk into the shareholders’ meetings, do they give you a standing ovation? They must be pretty happy.
MH: We have some happy shareholders, yes. But they always keep a bead on us to make sure we’re constantly creating value. It’s “What have you done for me lately?”
DR: During the presidential transition, Donald Trump sent out a tweet saying that your biggest product, the F-35, was too expensive. You were out of the country at the time?
MH: I was in Israel, where we were delivering their first two F-35s.
DR: What was your reaction to the president of the United States tweeting that you were charging the U.S. government too much?
MH: We needed to get those aircraft delivered. Prime Minister Netanyahu was at that event, and he asked me about the fact that our new president was going to get a better price on those aircraft, and that maybe he should get a rebate on the ones that we were delivering. That presented a bit of a challenge.
It’s important to recognize what our president-elect was communicating. He was trying to communicate to the American people that he was going to get good deals on the equipment he purchased, and that he was going to increase defense spending but he was going to make sure he spent the taxpayers’ dollar wisely. I personally engaged my team to have a dialogue with him.
DR: You did give him a little discount?
MH: We drove the price down. We got the deal done, and we did it in an accelerated fashion. He definitely had an influence on that.
DR: You grew up in Kansas. Your father died when you were nine years old, and you had four siblings. How did your mother support five children?
MH: It was tough, frankly. My father was with a department in the army. My mother was the at-home mom with five children. We were an average family. It set us back a lot.
I give great credit to my mother, who raised five children on her own. She just passed away a couple years ago at ninety-seven. It was an incredible life that she had.
DR: She was from Alabama.
MH: She was from Alabama. She taught us the value of a dollar. We had to learn how to economize at a very young age. She’d send us in to pay the electric bill. She just got her kids out and said, “You’ve got to learn how to do these things.” It taught me to be very self-reliant.
DR: I was told that she used to say to you, “Go to the grocery store. Here’s five dollars. Bring back seven dollars of groceries.”
MH: That’s true. I learned early how to economize, yes.
DR: You went to the University of Alabama. Did you get a scholarship and not have to work?
MH: I didn’t have a scholarship. I worked nights, on what was called the graveyard shift, from eleven at night to seven in the morning, and then I went to class from eight to one or two. Then I’d sleep. Unless I had a date—then I’d go right back to work, without sleeping, because you can do that when you’re eighteen or nineteen years old. I worked full-time, paid my own way through school. Finished in three and a half years. You do what you have to do.
DR: After you graduated, did you say, “I want to be the CEO of Lockheed Martin”?
MH: No. I started looking for a job. I took a job out of college as an economist here in Washington with the Bureau of Labor Statistics. They were in the midst of redoing the producer price index. It was a good job for a recent graduate. So I actually started my career here. Four years later, I interviewed with several companies, one of which was Lockheed, in Marietta, Georgia, and started there as a senior industrial engineer.
DR: When you went to Marietta, you worked your way up. You had, I think, twenty-two different leadership positions. You must have been moving around a lot.
MH: I was in Marietta for about thirteen years. Eighteen months in, I was promoted to supervisor in industrial engineering, and then, at about the two-year mark, I was put on a general management development program—great credit to my sponsor that he put me forward for the program—so I spent two years rotating around the company. At the end of the two years, I was a manager over all of our production estimating and budgets.
DR: At one point your husband was unemployed, and he got a job interview with a company. What company was that?
MH: His company went out of business, and he was out looking for a job. We had a five-month-old baby, so we were very much hoping he’d find a job. It was a tough labor market at the time, but he came home one day and he said, “Okay, I got a job.” I said, “Where?” And he said, “At Lockheed.” And I said, “You’re at Lockheed? Why my company?”
It turned out he went to work in the finance department. We didn’t really cross paths. I was running industrial engineering by that time. He retired from Lockheed after five years.
DR: You have given him a lot of credit for what you’ve been able to achieve. You might describe how, after he retired, he took on the role that many people would say a wife might have normally taken on.
MH: Yes. I say he “retired.” Our boys were three and six. We moved from Marietta to Fort Worth, Texas, because my job moved us. You know how stressful it is to have a couple of young children at home. I said, “Why don’t we try you working from home for a year?”
And we just never changed the model. He became the at-home dad. He was the coach. He was the Scout leader. He went on the field trips. He managed that, because I travel a lot in my job. We were maybe a new-age family back then, in the way we worked, but it worked for us.
Today our kids are in their twenties, and they’re off doing their thing. When I said he retired, he basically hit that five-year mark. He got a retirement check from Lockheed Martin not long ago.
DR: So I guess he’s happy with shareholder performance as well.
MH: Yes, he is.
DR: Let’s talk a moment about the product I mentioned earlier—fighter jets. There’s an F-14, F-15, F-18. There was an F-22. Then you’d come up with something called the F-35. What happened between 22 and 35?
MH: Aircraft are not numbered by Lockheed Martin. The U.S. government determines what the number is. F stands for fighter, and B for bomber. The terminology is kind of general, and usually it is sequential.
We won the contract with our X-35. You named them with an X or a Y if they were experimental or a prototype. Lockheed was the winner of this competition, and the secretary of the air force said, “The F-35.” We were all shocked, because we thought it was going to be the F-23. Once he named it, that’s what it became.
DR: You didn’t want to tell him he made a mistake, I guess, since he just awarded you the contract.
In the history of our country, this is the biggest defense contract ever. Tens of billions of dollars, I assume. Why does it cost that much to make these planes? What’s so great about the F-35?
MH: The F-35A, which is your conventional variant of aircraft, was priced at $94.3 million. We’re on a path to drive that down to $80 million by 2020. Think about that. Maybe you fly a Gulfstream.
DR: Occasionally.
MH: Think about what you pay for that. Then think about the most sophisticated jet fighter in the world that might cost $80 million. That’s pretty remarkable, in my mind.
It is the most advanced fighter in the world. It has stealth. It has sensor fusion. Not only is it a game changer in terms of providing air superiority, it can communicate with all assets on the battlefield. It is basically a force multiplier. I don’t have to tell you that. Talk to some of the pilots who fly it.
DR: What’s it like to be the CEO of our nation’s largest defense contractor? You get about 70 percent of your revenue from the U.S. government. How much of your time do you have to spend with the government? How do you spend your time in a typical week?
MH: Between 60 and 70 percent of my time is spent on the strategy of the business, the customers, and engagement—traveling around the world on the customer side of the business. It’s important, in my role, to be out meeting with not only our congressional leaders and our government leaders to make sure we’re aligned with what their needs are, and their priorities. I also travel a lot outside the country. Thirty percent of our business is outside of the United States, with governments around the world.
DR: You were recently voted the twenty-second most powerful woman in the entire world—not just in business. When you saw that, did you say, “I should be higher”? How does it feel to be the twenty-second most powerful female on the entire planet of 3.6 billion women?
MH: I don’t focus on it that much, David. I got a note from my brother that said, “Why was Oprah higher than you?” That’s not something I’m focused on. There are a lot of lists. It really comes down to having the privilege of leading a national asset, a company that’s doing some of the most important and interesting work in the world.
DR: When you started out, were you often the only woman in the room at Lockheed?
MH: I was, yes.
DR: Was that intimidating, or was it the kind of thing where you said, “I can show them that I’m better than them”?
MH: It’s like any team you come into: you have to establish your credibility. Recognizing that I was a different gender, maybe the first moment I was different in that sense. Once you’re contributing and you’re part of the team, it was no longer a factor—for me, at least—through my career.
What is really positive is that today, 22 percent of our leaders are women; 24 to 25 percent of our workforce are women. There’s a pipeline of women. There’s no longer only one woman in the room. We have many women leaders in the room.
Thirty-five years ago, there weren’t as many women coming out of engineering and other fields into the workforce. But you look at our customers today, look at our military services, women are in uniform and in leadership positions. It’s just a pipeline issue. We’re always working to get more women into that pipeline.
DR: What do you do for relaxation? Are you an exercise person? A traveler? Do you play sports?
MH: My husband and I like to get out and play some golf as relaxation. Our family gets together and travels. I travel a lot for the job; probably 40 to 50 percent of my time I’m on business travel, but one of the things we really enjoy is traveling together as a family. I always try to create some travel that our kids will find fun. As long as Mom and Dad pay for it and it’s fun, they’ll come.