New CEO Wants Lockheed to Become a 5G Player
And Jim Taiclet wants the government to underwrite its new direction.
Lockheed Martin’s new CEO wants to help build a 5G network that the Pentagon can use to connect all its weapons and retain military advantage over China.
Jim Taiclet didn’t unveil many details, but the former telecom executive said on Tuesday that he wants the firm to adopt “tech industry practices and maybe some new partnerships in technologies,” a shift for a company whose revenues largely turn on weapon sales.
“I’ve got an idea called 5G.mil that we’re going to try to figure out how to create and really bring that technology…into our space and drive performance at this company as a result of that,” Taiclet said on the company’s second-quarter earnings call with Wall Street analysts.
Taiclet, who spent most of the past two decades as CEO of American Tower, which specializes in wireless communications infrastructure, said the Pentagon needs to incentivize companies to invest in areas like 5G by reimbursing firms for their research and development.
“If we can get our customers convinced that certain types of independent research and development need to be compensated for in perhaps new ways by the government so that companies like ours and others can take risks and we can bring in partners that are willing to take risk, at least knowing they may have a path to compensation at the end of the day, then we’re going to be able to accelerate our growth,” he said.
“It’s going to require cooperation with our customer and their sort of authorizing us to try some of these things,” Taiclet added. “Because no one is going to take any risk on the defense industrial base by implementing these technologies in a different way if they’re not sure they’re going to get paid for it.
Taiclet’s selection to succeed former CEO Marillyn Hewson was viewed by some as a desire to change the way the company operates and adopt more commercial business practices.
The creation of a 5G military network has been a top priority of Pentagon leaders. It is experimenting with the technology at military bases across the country.
“[W]e see an opportunity for 5G technologies to bring greater connectivity, faster and more reliable networks, and new data capabilities to support our customers’ multi-domain and autonomous operations on 21st century battlefields,” John Torrisi, a Lockheed Martin spokesman, said in an email. “In partnership with our customers, we believe Lockheed Martin is uniquely positioned, leveraging commercial best practices and the expertise of our leadership, to bring 5G connectivity and capabilities to the defense industry rapidly and affordably. We look forward to working with the U.S. government to inform, fund and execute this vision.”