Lockheed Martin Corp. Considers Downsizing to Improve FinancesTHE WASHINGTON POST -- WASHINGTON
The board of directors of Lockheed Martin Corp. met Thursday to consider shedding businesses worth at least $1 billion and removing at least one layer of top management at the suburban Bethesda, Md., aerospace giant.
Company officials refused comment on the options under review, but sources said one possibility is selling a portion of the company’s suburban Manassas, Va.-based space and electronics unit. The business makes radiation-resistant computers for use in space and is part of a larger unit that employs 900 people. The other part of the operation, which has about 800 workers involved in undersea-warfare technology for the Navy, is not believed to be on the block.
The board meeting was the final step in a previously announced plan to get the troubled company back on track. For more than a year now, the $26 billion company has been struggling with earnings shortfalls, losses of key Pentagon contracts and the departure of a top executive.
Lockheed chief executive Vance Coffman has vowed to restore the company’s credibility with Wall Street, which was shattered last fall when he surprised analysts by announcing the company would fail to meet earnings predictions, barely weeks after it had said it would.
EarthLink, MindSpring to MergeLOS ANGELES TIMES
In a surprise alliance that creates the United States’ No. 2 Internet access provider, EarthLink Network of Pasadena, Calif., agreed Thursday to merge with Atlanta-based MindSpring Enterprises in a deal that is expected to accelerate the deployment of high-speed Internet services.
The combination will create a $3.9 billion company and catapult EarthLink -- as it will be known -- ahead of Internet access providers CompuServe, Microsoft Network and AT&T’s WorldNet service, as well as fast-growing upstarts like Westlake Village-based NetZero that offer free Internet access.
But with 2.8 million customers, the new EarthLink will still be far behind industry leader America Online, whose nearly 18 million customers make up approximately half of the Internet population.
Executives from EarthLink and MindSpring said the merger will improve their chances of catching up because the companies will grow faster together than they would have on their own. For instance, they have already planned a $300 million advertising campaign that they expect to help them reach the 5 million subscriber mark by the end of next year.
Analysts said the merger is likely to be followed by others as Internet service providers scramble to keep up with AOL. The bigger the ISPs are, the better their chances of rolling out expensive broadband services like digital subscriber line and cable modem access.
The deal is structured as a merger of equals, with shareholders from EarthLink and MindSpring owning equal parts of the new company. The headquarters will move to Atlanta, but none of EarthLink’s 2,010 employees will lose their jobs or be forced to move. EarthLink Chief Executive Garry Betty, who will remain CEO of the new company, will continue to work out of Pasadena even though Atlanta is his hometown and he maintains a house there.