Responding to attacks from a group seeking to replace his board of directors, Lockheed Chairman Daniel M. Tellep on Monday predicted that his 1989 plan for cutting non-productive assets and other costs will help the aerospace firm generate larger profits.
Tellep also criticized his rivals' strategic proposals for Lockheed, calling them "vague and superficial."
Tellep's comments, made in an interview, were designed to counter assertions made by NL Industries, a Houston company controlled by Harold C. Simmons. NL Industries, which supports Simmons and his rival slate of Lockheed board candidates, Sunday had charged that the aerospace firm's restructuring plans had been a failure.
Tellep said Simmons does not understand Lockheed or the restructuring plan, which was announced in April, 1989. The plan calls for asset sales, cost cutting and for action designed to stimulate the growth of Lockheed's commercial operations--projects outside the firm's core business of aerospace and defense contracting.
NL Industries has said that Lockheed's diversification efforts divert the attention of Lockheed executives from their "core" businesses of contracting for the Department of Defense and the National Aeronautics and Space Administration. The assertion was made in an NL proxy statement mailed to shareholders.
The statement, issued Sunday, said Lockheed "should not be foreclosed from pursuing sensible diversification" but said Lockheed management should "now be focusing on the immediate task (of) strengthening the space, missiles and aeronautical operations."
Said Tellep: "I believe the statement is vague, superficial and contradictory."
Simmons and NL Industries President J. Landis Martin restated their criticisms during a presentation to Wall Street financial analysts in New York Monday.
Simmons, who will seek shareholder support for his board slate at Lockheed's March 29 annual meeting, told analysts that Lockheed's operations were not being managed efficiently. He also said his group would hire Salomon Bros., the New York-based investment banking firm, to analyze Lockheed's financial situation.
"We can do a better job of cost control," Simmons said.
Martin, who also spoke at the presentation, criticized Lockheed for deciding to retain CalComp, a firm that makes computer graphics materials. Lockheed last April announced it would sell CalComp and other units in it informations systems wing, but later removed the firm from the sales block. Martin also said Lockheed had recently sold two other information systems units at a price he considered too low.
However, Tellep said Lockheed made a profit on the two deals, selling them for a combined price of $90 million.
Tellep discussed his restructuring plans with institutional investors in Boston on Monday. A statement from Tellep on restructuring is also being delivered to Lockheed shareholders this week. The letter said restructuring "will position Lockheed for growth in profitability and shareholder value."