Technicians test the GRAIL Spacecraft at Lockheed Martin
Space Systems Company near Denver in this 2011 file photo." border="0"/>
Technicians test the GRAIL Spacecraft at Lockheed Martin Space Systems Company near Denver in this 2011 file photo. (Patrick H. Corkery, Lockheed Martin)

Declines in government spending are forcing behemoth defense contractor Lockheed Martin to consolidate operations by closing four of its U.S. facilities and laying off 4,000 employees, but Colorado stands to benefit from the nationwide downsizing.

The Bethesda, Md.-based company announced Thursday that its facilities in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; and Horizon City, Texas, as well as four buildings at its Sunnyvale, Calif., campus, will close by mid-2015. The work and some of the employees from these locations will be moved to Denver and Valley Forge, Pa.

Metro Denver is harvesting what other states are losing and will see an influx of space-related work and the addition of about 350 employees. These are high-tech, high-paying and highly skilled engineering and manufacturing positions, which will likely be a mix of relocated staff and new hires.

"In the grand calculus, they are putting more work in Denver, and that verifies the synergies that you need (as a state)," said Mark Muro of the Brookings Institute, who authored a recent study of Colorado's aerospace cluster. "All locations are in play and are subject to relocation, departures and additions. In an economy and industry where there will constantly be restructuring, it is really important to win in those restructurings."

Much of this can be attributed to the fact that Jefferson County is the global headquarters of Lockheed Martin Space Systems — one of the company's main business sectors affected by the consolidation. The Waterton Canyon campus will undergo a 200,000-square-foot facility modification as a result of workloads that are moving from Newtown and Sunnyvale.


Lockheed's Newtown facility designs and develops military, civil and commercial satellites for clients including the U.S. Air Force, the U.S. Navy and the National Oceanic and Atmospheric Administration. Sunnyvale does assembly and testing of critical national-security programs as well as remote sensing and infrared satellites.

Over the next one to two years, the company plans to improve its manufacturing, assembly and test operations in Denver. The move date is targeted for the end of 2014, and Lockheed hopes the merged operations are fully functioning by the end of 2015.

Apart from the space-systems work, Lockheed's Deer Creek Canyon site in suburban Denver is a part of the company's Information Systems & Global Solutions division. Lockheed plans to move programs operating out of its soon-to-be-closed Goodyear facility in Arizona to Deer Creek Canyon, but it is unclear how many — if any — of Goodyear's 600 affected employees will be relocated to Denver.

Chip Eschenfelder, a spokesman for Lockheed Martin Space Systems, said the consolidation decisions were based off a corporate review that balanced existing facility capacity with future workload projects.

"Reducing our workforce of dedicated employees and closing facilities are among the most difficult decisions to make," Marillyn Hewson, Lockheed Martin CEO and president, said in a statement. "These actions are necessary for the future of our business and will position Lockheed to better serve our customers."

Peter Arment, a senior research analyst for brokerage firm Sterne Agee, notes that the latest round of job cuts will take total employment at Lockheed Martin to 116,000, which is 23 percent below peak-level employment in 2008. The Department of Defense — which Lockheed depends on for contracts — has seen its base budget decline 17 percent since the 2009 fiscal year.

While these cuts to overhead costs are proactive, Marco Caceres, a senior space analyst for aerospace/defense adviser Teal Group, worries that this is not the end of Lockheed's downsizing.

"They are becoming very realistic about their future of space systems," which is changing because of budget cutbacks, budget stagnation, increased competition from international players and competition from other U.S. commercial companies, Caceres said.

"They are being smart. They are moving now as opposed to two to three years from now when it might be too late," he said. "If they can't see a significant way to lower their costs, they could be scooted out of the business in the future."

Lockheed employs more than 6,000 people in metro Denver and about 8,200 statewide.

Kristen Leigh Painter: 303-954-1638, This email address is being protected from spambots. You need JavaScript enabled to view it. or

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