The latest firm to experience the effects of coronavirus pandemic is Lockheed Martin. The company is recording the lowest margins since its initiation.
Initially, that is in their first financial segment as of April 21, the effects of the pandemic are negligible. However, in the proceeding days, the results are materializing. The company says that its supply chain is incomplete. The reason is most of the intermediaries are under lockdown. Several of its employees and customers are facing a travel ban. Therefore, they have to halt their activities.
Marilyn Hewson, who is the company’s president and CEO, on a call, reiterates that the business is slightly motionless, especially in reaching the consumers. She adds that this problem is a result of the inaccessibility of the customers’ location due to lockdown.
The company’s vice president, Ken Possenriede, says there is an internal problem in the company. He says the social distancing rule is hindering the swift flow of processes within the company. This problem is affecting some of its valuable programs.
The vice president further comments that the aeronautics divisions have middlemen problems because of social distancing. For this reason, the company has to reduce the projections of net sales by over $300 million.
The company also faces other challenges like employee absenteeism due to lockdown. Some areas are also inaccessible to doing business. All these are effects of the pandemic on the Lockheed Martin supply chain.
Despite all the challenges they are facing, Lockheed is hiring new employees. This move aims to capture many of the valuable engineers from their competitors before things go back to normal.
The company hopes that in the next few months, the sales are going to be low before they pick once the situation normalizes. They hope that at the end of the first half of the financial year, the curve flattens.
The operating profits of Lockheed’s space unit are below $300 million, which is lower than for last year at the same time. The company says the decline is a result of the supply chain breaking and the retirement of government satellite programs.
The net sales, however, are high than last year because of the ‘go-ahead’ by the government to let the company launch missile warning satellite in addition to other space activities.
Finally, though Lockheed Martin is operating low on its profits, it is a promising space company to the government. The support it receives from the government is cushioning it from experiencing wild coronavirus pandemic problems. It is clear that to venture into space is crucial to be in good terms with the government.