Lockheed Martin's Unfortunate Silence
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Here are the business leaders who are – and aren’t – officially advising Trump, Business Insiders
CEOs of at least 3 major companies quit WH board over Trump Charlottesville response
“Thanks for checking in. We don’t have a comment,” said a spokesman for Lockheed Martin CEO Marillyn Hewson.”
As Trump disbanded advisory groups, this is who was in and who was out, CNBC
“Marillyn Hewson Lockheed Martin CEO No comment”
I’m reminded with this council and this President of a story that has kept me thinking since I first heard it as a child. It involved a scorpion and a frog.
“This morning, President Trump tweeted that he had made the decision to disband his economic councils out of courtesy to the executives serving on them. Now, one CEO is disputing that account.
After insisting that he was not bothered by the flood of executive evacuating White house economic councils over Trump’s refusal to fully condemn the white supremacist movement whose rally over the weekend led to the killing of 32-year-old Heather Heyer and injuries to at least 19 others, Trump abruptly announced the end of the councils:
Today, however, the leader of the Strategic and Policy Forum, Blackstone Group LP chief executive Stephen Schwarzman, told the Wall Street Journal that his group had already agreed to disband. Schwarzman said he phoned the president prior to the tweet to “cordially” let him know about the group’s decision and make clear that it came because of the president’s statements on the Charlottesville carnage”
http://washingtonjournal.co…
I was going to post something very similar. It’s not a stretch to believe Trump tweeted what he did to try and save face, even thou the facts–most likely–are what Schwarzman says.
Since this does touch on diversity in the aerospace community, and you seem to track that at relevant events, I’ll add a slight digression.
I’m at a conference organized by the International Academy of Astronautics (IAA) and they used the conference dinner to also announce and congratulate some newly elected members. Out of five new initial members (five year tenure) and three promoted to full (lifetime) membership, there was one woman in each category.
I couldn’t keep track of number of people from minority groups in a meaningful way. It is an international organization, and I couldn’t track who was a citizen of another country, an American citizen originally from another country or an American decended from someone from that country.
IAA membership, as I understand it, is based on nomination by a member and a vote of the members. I see that as a recipe for a closed club of people who only admit others who are “like them.” (And, no, I’m not a member. The conferences they organize are open to non-members.)
I do see the recipe, but I’d point out that, for instance, the male population of these United States extended voting rights to women, for instance, something that was done because it was the right thing to do. Sometimes groups do the right thing. And given the pressure currently bearing on the scientific community to become more inclusive I’d expect to see movement.
I’d rather hoped the movement would be dramatic, and soon.
Yes, but that could miss some of the real benefits of diversity. Specifically, involving people with different views, approaches and ideas. The whole idea of new members being nominated and elected by the current members invites more of the same. That system could be produce gender and ethnic balance, either by the good will of members or under pressure. But they would still, probably, be admitting women and minorities who share their views, assumptions and values.
It’s like hiring recent immigrants versus second or third generation, fully assimilated and Americanized people of the same ethnic background. Both increase ethnic balance and non-discretionary. But, except in a superficial sense, only one promotes diversity.
Yes, but it took almost 80 years for women to get the vote, along with technology and science advances that changed their role in the economy that put additional economic pressures to swing the argument in their favor.
Excellent points, and true, of course. My example wasn’t the best, but still: even self-replicating decision-making bodies can change. Perhaps the change is glacial. In this case the change WAS glacial. Often, though, glacial is about the right speed.
So annoying – I really feel for Ms Hewson and the tough spot she was put in by this president. You do what you can to try to establish a working relationship with the White House – in spite of its flaws – to try to get traction on ideas with real benefit for both the overall economy and your shareholders specifically, and then POTUS mouths off in a press conference and puts you in a position where you either have to negate all of that work by bailing off of his council or incur the wrath of the blogosphere for not reacting soon enough.
The resignations were political grandstanding. I know many employees agree that both sides were to blame here, not just one. Good for her not bowing to political pressure.
What is unfortunate is not Lockheed remaining silent but Lockheed being expected to become partisan. Why the deuce do you expect businesses to take political sides?
Duh. They made political decisions to serve on the committee in the first place.
Will you expect congress and senate to resign for something that trump did or didn’t do?
Wouldn’t they be abdicating their responsibility to keep trump in check if they did?
Wouldn’t the businesses be abdicating their responsibility to keep trump advised if they resigned?
OK Trump Guy and AltRighter. I get the message.
Congress has a responsibility to balance the President. The relevant powers and roles are written down and the swear an oath to do the job when they take office.
Businesses have no such responsibility to advise the President. Their responsibility is, well, to do business in a way which benefits their stockholders or owners. If they think advising the President accomplishes that, fine. If they think being associated with him doesn’t help their business, then that’s also fine.
Politics in the Swamp is all about money. Look at SLS. Lockheed Martin is primarily a government contractor and this Administration had already made it clear one goal will be increasing defense spending. So as with any government contractor they are going to follow the money.
The mistake here is to equate Nazi craziness with a ‘political side’.
Nothing surprising – the firms that resigned all have major consumer product lines that could have sales impact by boycotts. Same with Elon Musk (Tessa, Solar City).
By contrast Lockheed Martin exists almost entirely on government contracts. They need to stay on the Administration’s good side, especially if military spending is going to increase.
What you see as ethics is really nothing more than decisions being made based on the impact on their future revenue streams. As always follow the money.
Or he just feared the impact on sales at Tessa/Solar City by the prime markets for both firms. What you see as ethics I see as nothing more than a simple business decision.
On one hand, I sort of get it. On the other hand, I keep thinking that quitting isn’t typically a way to get things done and influence people (even a President). What better position is there to influence the future in a positive direction. That would include, as a by product, a moral future, if that’s really what this is or was all about.
Yes, they probably would have had more influence staying on the board, but they couldn’t risk their firm’s revenues.
And that, my friends, encapsulates the current thinking that separates business from ethics.
It’s not the current thinking, it’s how the business and the swamp has always worked. If those CEO’s didn’t resign and their firms lost significant revenue as a result of boycotts from their political activities they would be sued and/or fired. Their most important legal responsibility is to make money for their shareholders.
So if the Lockheed Martin CEO did resign and Lockheed Martin got less than their “fair” share of the DOD spending increase they would also be sued and/or fired for making the Administration angry with them.
Of course, as you point out, the correct business decision could go either way. So a CEO being fired or (successfully) sued is unlikely. The CEO could simply say she was balancing the losses from harm to the corporate image and boycotts against the benefits from influencing DoD spending decisions. If both were considered, I don’t think there would be a winning case for negligence.
Except that Lockheed Martin is not known for consumer products. There just aren’t that many households that need a F-35 or even a F-16 🙂 So there is nothing for the consumers to boycott.
Yea. They don’t even have an indirect vulnerability to public opinion. With Boeing, a campaign against airlines flying (or ordering) their aircraft might have some effect. Things like that did help trade unions establish themselves, back a hundred or more years ago. But LMA hasn’t built commercial aircraft since Martin Marietta was a competitor, and I haven’t seen a lucky 1011 in years.
Is this what is being taught these days, Professor? Worship at the Altar of Stock Price? any decision is Ok because “Hey! It’s bidness!”
Whatever happened to corporate social responsibility? You know, the notion that doing right is best for everyone, including but secondarily the company? Or the idea that there ought to be fealty to a greater good—that being the good of the country?
It’s what the courts, via shareholder lawsuits, and Board of Directors require of CEOs. Remember, those like Elon Musk who own their firms are few and far between. When you work for someone else they set limits on what you may or may not do.
In this case the CEO from firms that depend on consumer revenues had to resign to protect their firm. Those dependent on government revenues didn’t dare to protect their firm.
This is a big advantage of free markets and how they are a force for social progress – the markets force corporations to reform. In the 1960’s and 1970’s it was free market pressures that forced the TV networks to show more diversity in their programs. In the 1980’s and 1990’s it forced firms to go green and organic. The boycott/dis-investment campaign of firms invested in South Africa role in changing that nation’s government is another example.
BTW if you ever get the chance watch “Back to School” with Rodney Dangerfield. It shows well the difference between classroom theory and the real world of business. Tell me, should students be taught the physics of Artistole because it makes more sense from the perspective of philosophy? Or the physics of how the universe really works?
Other companies stepped forward. Lockheed Martin did not.
That in itself can be a slippery slope. Fifty years ago, many companies did justify discrimination on the basis of just doing business: “We’re not racist, but our customers are, so we can’t hire [insert ethnic group] as salesmen.”