Lockheed Martin adding machining capabilities in Owego

• With about 2,600 employees in Owego, Lockheed Martin is one of the region's largest the employers
• About 48 percent of the Lockheed Martin workforce is in engineering
• About 60 percent of the production at the Owego plant is for the U.S. armed services

OWEGO – The most recent example of Lockheed Martin's local success comes in the form of the Manufacturing Center of Excellence, an $18 million investment that will add about 90,000 square feet of space and give the Owego site new machining capabilities.

Right now, work is wrapping up on the new center, with a ribbon cutting planned for early May. The center is the result of operations transitioning from Lockheed Martin's Akron, Ohio, plant to the Owego facility. The building will have CNC machining areas, an assembly space, a welding shop and a spot for additive manufacturing.

"The nice thing about the Akron transition is that it brings capabilities into this site that are unique in the market," said Dan Spoor, vice president of Aviation and Unmanned Systems for Lockheed Martin's Mission Systems and Training business and general manager of the Owego site.

The Owego plant is part of Lockheed Martin's Mission Systems and Training business, which is headquartered in Washington, D.C., has about 16,000 employees across the globe and had 2014 sales of $7.1 billion.

The Owego campus totals 1.7 million square feet, occupying just a fraction of the 675 acres Lockheed owns off Route 17C.

"You can walk a mile without ever having to go up a step of stairs inside this facility," Spoor said. Indeed, as Lockheed Martin has an indoor walking path for employees.

The Owego site has also expanded its footprint in sustainable energy: There's an on-site biomass facility, which uses the byproduct from Wagner Lumber and generates steam for the entire site. A groundbreaking will also be held this summer for a waste-to-energy plant, which, in combination with the biomass facility, is expected to create an impressive one-two punch of sustainability in Owego.

The Owego plant employs 2,600 people, a number Spoor is confident will hold steady over the next couple years. Of those, about 48 percent work in engineering.

That job figure makes Lockheed one of the region's largest the employers, trailing Cornell University, Corning Inc., United Health Services, Arnot Health and Binghamton University.

Lockheed is the second largest manufacturer in the region behind Corning Inc. with 5,000 workers at its Steuben County glass manufacturing plants. Just behind the Owego plant are The Raymond Corp. in Greene, which makes lift trucks and now employs more than 1,500 people, and BorgWarner with about 1,400 employees producing automotive engine components in Tompkins County.

The Owego site has diverse capabilities, ranging from electronics manufacturing operations, engineering development labs and integration hangars and support facilities. Employees can do everything from build printed circuit boards from scratch to machine the enclosures that surround an electronic assembly.

"If you get down to it, we're really an electronics firm here in the Southern Tier," said Eric Dibble, senior manager of manufacturing engineering at Lockheed Martin in Owego.

Right now, U.S. defense contracts represent a majority of the Owego plant's customers. In total, the U.S. Navy and U.S. Marine Corps make up 42 percent of the business, while the U.S. Air Force totals 15 percent and the U.S. Army represents 3 percent. The remaining 40 percent is international and other customers.

Spoor said Lockheed Martin is currently in pursuit of several "serious international programs." Spoor said he expects international and the U.S. Air Force to make up larger portions of the business moving forward.

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One of the big reasons why Spoor believes the Air Force business will grow moving forward is the multi-billion-dollar combat rescue helicopter contract, which the Air Force officially awarded to the Lockheed-Sikorsky Aircraft team early last summer.

The $1.28 billion engineering and manufacturing development contract awarded last June is the first step in eventually providing 112 combat rescue helicopters by 2029. The potential value of the contract has been reported at $7.9 billion.

For the program, Connecticut-based Sikorsky will provide the helicopters and Lockheed Martin, in Owego, will be assigned to handle the new chopper's modernized mission systems and other special equipment.

A little more than a month before the CRH contract award, the U.S. Navy in May 2014 announced the Lockheed-Sikorsky team won a $1.24 billion fixed-price-incentive-firm target contract for the engineering and manufacturing development phase of the Presidential Helicopter Replacement Program.

Similar to the CRH contract, Sikorsky will provide the helicopter — the VH-92, based off the company's S-92 helicopter — and Lockheed, in Owego, will install the integrated communications and mission systems. The final paint for the presidential helicopters will also be done in Owego.

By 2023, the Sikorsky-Lockheed team will provide 21 operational presidential helicopters and two test aircraft.

Spoor said one aircraft is in Lockheed's facility now, and testing will occur at the end of the year.

The VH-92 contract is especially sweet for Lockheed Martin, given the bitter disappointment that came with the original Marine One contract, which was canceled in 2009 and led to Lockheed serving layoff notices to about 600 employees.

"I think it's a great win for everyone," Spoor said. "Part of it is the relationship we have with our partners at Sikorsky. We've been with them for 40 years. We've done great things together, and now we have another program together — this one for the president's helicopter. What better program can you have than that?"

Lockheed Martin credits its success, from winning lucrative helicopter contracts to the upcoming boost expected from new machining capabilities, to its group of employees in Owego.

"This site is exceptional in its abilities to execute," Spoor said. "The quality, the delivery performance, the engineering expertise that they put into what we design, I put them second to none."

So when Lockheed Martin decides to consolidate, Spoor said, the Owego site is the recipient of transferred operations. That occurred in 2011 with the Eagan, Minn., plant and, most recently, with operations moving in from Akron, Ohio.

"It's like any business situation: The longer we continue to execute and perform, the better our position is," Spoor said. "We have done exceptionally well in terms of that. Because of that, I feel great about the future for this site."

Follow Jon Harris on Twitter @PSBJonHarris.

Lockheed Martin Corp.

Year founded: 1995.

Local address: 1801 Route 17C, Owego.

Company headquarters location: Bethesda, Md.

Number employees locally: 2,600.

Number employees total: 112,000.

Owned by: Publicly traded.

Annual revenues/sales: 2014: $45.6 billion.

Annual net income (profit): 2014: $3.6 billion.

To what do you attribute your continuing success?

Dan Spoor: "The success of the Owego facility can be directly linked to the exceptional skills and performance from our employees. They that have put, and continue to put, their talents, energies and selfless dedication towards meeting our customer commitments. I am fortunate to represent this business at many high-level meetings both domestically and internationally and rarely am I in a conversation that has to do with our lack of performance on customer programs; our past execution has afforded us the opportunity over the years to take on our customers greatest challenges and solve them."

Three key strategies:

•Focus on the customer: Know the customer at a level that allows you to partner with them to meet their needs.

•Create an environment that allows your team to be creative at growing the business and supporting customers.

• Cultivate relationships with customers and other companies that are built on a foundation of "trust."

Two greatest challenges:

•Growing business internationally.

•Positioning the present and future workforce for the future challenges that customers will face. To address this challenge, Lockheed said it will continue to support local STEM initiatives and foster a work environment where employees can excel. Lockheed said the more it can do to support its employees, the more its business will flourish.