Lockheed Martin Corporation - Essay Example

? LOCKHEED MARTIN CORPORATION Lockheed Martin is an American aerospace multinational that also specializesin defense, security and advanced technology industries. The corporation was instituted in 1995 following the merger between Lockheed Corporation and Martin Marietta (Yenne, 2000). The corporation is based in Bethesda in Maryland with global centers that specialize in different aspects of the Corporation’s many operations. Currently, the corporation employs over 120,000 employees scattered across the world. Presently, Lockheed is one of the largest defense contractors in the world and enjoys almost unlimited orders across the world. The operations of the corporation are divided into different segments comprising electronic systems (27%), aeronautics (27%), information systems and global solutions (27%) and space systems (19%). Today, US government contracts account for much of the corporation’s revenue while foreign government contracts also make up a substantial share of the revenue. On the other hand, orders from commercial clients only make up a mere 2 % of the total revenue the corporation nets in a year. In 1996, the corporation finalized the plans to acquire Lorad Corporation which subsequently became part of the Corporation at a cost of $9.1 billion. Like any other global corporation engaging thousands of employees across the world, Lockheed is certainly faced with a myriad of challenges that normally define business operations in the present world. One of the greatest challenges facing the corporation is the need to address employee concerns and effectively tackle the aspects of employee and industrial relations without many problems like is always the case. On certain instances the corporation has had to face the challenge of striking workers and go slow as employees complained about various aspects relating to their operations in the organization (Terris, 2010). In that regard, the aspect of dealing with these employee concerns has been one of the greatest employee challenges affecting the organization. Like most workers in the industry, most of Lockheed’s workers are unionized under the International Association of Machinists and Aerospace workers and are always part and parcel of the activities steered by the association. The International Association of Machinists and Aerospace Workers is a worker organization which draws its origin in 1888 when a group of nineteen machinists came together and formed the Order of the United Machinists and Mechanical Engineers. With time, the small organization grew up in membership and adopted the present name. The organization has had a turbulent history characterized by the growth of labor movements in the twentieth century. The growth of the union went in tandem with the development of the transport industry throughout the years as more and more workers became employed in the industry. During its formation, the organization was generally a secret affair given that employers of the time were very critical and hostile toward organized labor movements. However, the Order rapidly spread beyond its formation zone of Georgia and was soon a recognized affair in the United States. Much of the growth in the membership of the union was mostly evidenced during the World Wars when workers in the transport industry increased owing to the increased demand of vehicles and airplanes. In the course of the 1970s, the union was segmented into several divisions dealing with specific issues affecting the members. These included civil right, organizing, older workers and retired workers and women. At a convection held in 1984 in Seattle, Washington, the delegates voted and decided to use the Placid Harbor Education Center in order to train and educate the members of the union. In 1998, the center was renamed to the Winpisinger Education and Technology Center in order to recognize and honor the late President of the union. Throughout history, the union has always addressed the issues affecting the workers and negotiated with the relevant employers on specific aspects relating to the welfare of the employees. Over 3000 workers of Lockheed Corporation are unionized under the IAM and are always in track with the labor union. The union has always negotiated in several instances regarding the welfare of the workers of Lockheed. In 2009, IAM came under much negotiation with the management of Lockheed at Fort Worth where the corporation manufactures jets. The issues at play in that case were healthcare costs and pensions where the workers were over 3,900 people in total opposition with the management of the corporation. At an address to the workers on 19th April, 2009, IAM President promised the workers that the union would keenly negotiate for a fair and just contract between the members and the management of Lockheed (Julian & Denver, 2011). The core of the matter in this regard emerged out of the decision by Lockheed’s management to announce that it would eliminate pension programs for new hires and would also increase healthcare costs for all the workers at the corporation’s Fort Worth plant. The IAM Negotiating Committee promised that it would effectively address the issue with the parties and warned Lockheed against its wrong moves. There were also allegations that the company was planning to introduce very expensive healthcare plans if the workers rejected the idea of elimination of the then present healthcare plan. In the course of the negotiation, the union thwarted the efforts by the company to keep the proceedings away from the workers. They periodically informed the workers on whatever was transpiring between them and the management. Much of this effort was complemented when the union created a website from where information relating to the preceding talks was posted and the workers could easily follow. The union organized a series of committees to handle the various logistics of the strike and to keep the employees as well as the public well informed of the proceedings. Several committees came into formation, including the strike committee, communication, community service, film crew and kitchen (2010). These committees were basically assisting the union officials in addressing the challenge of the talks given that the public and the government had very special interest in the whole situation. In the course of the negotiations, the union officials presented the management of the corporation with an economic counter proposal. The management was supposed to go over the proposal and respond to the various questions that were thereby addressed. After going through the contents of the proposal, the officials of the organization invited the union officials to the bargaining table. In their arguments, the management enunciated that their plan to cut off the pension for the new hires was just appropriate and was basically a process of addressing the challenges the organization was facing at that time. In the process, it appeared that the management of the corporation was very adamant and did not want to cede ground on the bargaining table. While the management claimed that they actually paid their workers well and they could therefore afford the new proposal it was putting forward, the union members totally rejected the notion as giving through one hand and taking by the other which was basically unethical in business practice. As part of the initial negotiations, the management of Lockheed confirmed that it had given the union the option of accepting a 3 percent wage rise increase for the contract workers who were facing the challenge of the healthcare plan (Boyne, 2010). Moreover, additional signing bonus of $3,000 was also offered per worker as part of the deal. This was to be supplemented by $ 800 to cover the annual increase in the cost of living in the United States. According to the management, this was basically to be a contingency plan in order to address the fundamental issue at hand and enable the workers to return to their work. In the same process, Lockheed was facing similar pressure from Pentagon and was seriously in a fix to accept the proposals of the union. It was, however, a blow for the company when the union officials totally rejected the contingency plans on the account that they had never been successful in the past and that the company had always not honored such obligations (Anderson, 2009). In retaliation, Lockheed created the view that it could effectively continue its operations without much regard to the unionized workers who were seeking a change of the healthcare plans. The corporation announced that the employed workers would effectively replace the unionized workers in the course of the operations (2012). For a while, amid the negotiation talks, it appeared that the strike was actually an unending affair given that most operations in the corporation had began resuming despite the striking unionized members. It was certainly a blow and a great challenge to the negotiation process and it created the need for further talks and measures to address the situation. The emerging situation presented the union officials with a lot of challenges and they opted to seek for alternative measures of operations while continuing with the negotiation process. Collective bargaining was effectively used in the negotiation between the union officials and the management of the corporation. For a while, it appeared that much of the efforts of the union and the workers would not bore any fruit given the obduracy of the management in seeking to rescind the initial plans. However, light was seen at the end of the tunnel when finally the management of Lockheed agreed to give their presentation regarding a new pension plan that they had opted to adopt instead of their earlier proposal. However, the union was very keen on accepting the proposal and several more negotiations were further made before an amicable solution was reached. In any case, collective bargaining had been the most applicable strategy in the negotiation process and it certainly appeared that most of the challenges of the workers at that time had been resolved at least for a while. The unit that was involved in the collective bargaining process was drawn from the members of the union and also had representation from the unionized members. The committees that were established had actually been drawn from the corporation’s workers. The negotiation process basically consisted of the union officials and the management of Lockheed who were mostly represented by the top officials at the corporation. The corporation being the largest defense contractor in the United States and beyond meant that the government has a lot of interest in its operations. Pentagon, therefore, played a great role in the negotiation process by its advice on the management to seriously regard the specific aspects that were under consideration in order to avoid any disruption of the production process. At the end, it was realized that the basic issues of health care and pension plans that had actually affected the workers were resolved quite amicably and the whole episode ended effectively. The management of Lockheed is certainly faced with a myriad of challenges which normally affect the operational process. In any case, the corporation has always continued to address the issues affecting the employees in the most effective manner that mutually benefits all the parties in the negotiating table. In conclusion, it has to be stressed that the aspects of employee relations is a fundamental issue that affect large and small corporations alike. The most important concern is, however, the need to provide effective working environment and address the challenges facing the employees in the most effective way possible. The role of the labor unions in this regard cannot be overemphasized given their imperative role in representing the needs of the workers. In the collective bargaining process as a way of seeking to arrive at amicable solution with regard to the issues affecting the organization, it is realized that mutual understanding on each part of the bargain team is certainly an important consideration in the process. Whichever the case, negotiations can always help address the issues so long as the parties approach such negotiations with the seriousness they certainly deserve. References "Fifty years of cooperation": International Association of Machinists & Lockheed Corporation. (2010). United States: [International Association of Machinists and Aerospace Workers, Lockheed Corporation]. Anderson, R. A. (2009). A look at Lockheed. New York: Newcomen Society in North America. Articles Tagged 'negotiations' - IAMAW. (n.d.). Labor Union for the 21st Century: GOIAM. Retrieved April 29, 2012, from http://www.goiam.org/tags.php/negotiations Boyne, W. J. (2010). Beyond the horizons: The Lockheed story. New York: Thomas Dunne Books. Julian, D. L., & Denver, C. (2011). Turnover at Lockheed Martin a study in how to retain team members. Denver, Colo.: Regis University. Terris, D. (2010). Ethics at work: Creating virtue in an American corporation. Waltham, Mass.: Brandeis University Press. Yenne, B. (2000). Lockheed. New York: Crescent Books. Read More