Military leaders are drawing new lessons from conflicts in Ukraine, the Middle East and beyond

Terry Gerton I really appreciate that you are coming to me live from the Farnborough Air Show, where governments and companies are really showing off their latest military technology and platforms. I’m curious, as you walk the show, what feels different to you today than some of the past versions that you’ve been to?

OJ Sanchez Yeah, Terry, it’s a pleasure to be here. It’s a beautiful day out in Farnborough for those who haven’t come. England and the UK are just gracious hosts. And you’re right, we just see so many companies coming together with different nations and many delegations from the U.S. And what resonates with me that is the same is this focus on coming together to help talk about the problems that we can all mutually solve. What is different, I think, is we all are seeing around us is an increased sense of urgency. And we’re leaning in at Lockheed Martin to listening and then providing solutions with speed that can help match the urgency that our nations and our customers are feeling.

Terry Gerton Previously, the Farnborough Air Show was the critical platform for showing off fighter aircraft and it seems like maybe fighters are getting a little less emphasis these days. How much of what you’re seeing there is being driven by lessons from Ukraine and the Middle East and other ongoing conflicts?

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OJ Sanchez That’s a great question. Any time that we see active conflict, it’s on the top of all of our government’s minds. And certainly as a partner to these various teams, it is on our mind. And so we do see the lessons that are coming out of current conflicts where deterrence is working and where active combat is in progress, a focus on trying to solve those problems. And in many cases, the solution is interoperable. And so you may be right that in addition to airplanes and air power and fighter jets, we’re talking about other things like the impact of drones and the associated autonomy in the battle space. So to me, what I am seeing is not less of, but ‘and.’ I’m seeing airplanes, fighter jets and how are we gonna connect to this interoperable multi-domain battle space to meet the need. And then of course the conflicts drive an increased sense of urgency for all of us.

Terry Gerton One of the things that strikes me really is how much attention seems to be shifting from brand new platforms to finding new ways to use existing platforms and a lot of that seems to driven by the price of exquisite weapons versus the volume that seems to be required in modern operations. Are you seeing military customers looking harder at modernization or upgrades or outright Replacement?

OJ Sanchez So I think we’re seeing all of it, oftentimes gated by the budget available to do that. And so at Lockheed Martin, particularly in the aeronautics portfolio, I would remind you of a few things. So I’ll use the example, before I did this role as the president, I was running Skunk Works. And an iconic platform like the U2 — we celebrated the 75th anniversary of the U-2 recently, and yet it is still in active combat. And just recently we did a modernization package on that changing a capability in a very short amount of time, three weeks. And so you ask, how do we do that? Well, we design with that flexibility in mind. And so when nations need speed and when budgets are challenged, we absolutely lean into modernization. And we’re certainly seeing that on our United States Air Force F-22 program, we’re experiencing one of the largest modernization programs ever for a program that’s not in production. And so I think you’re right. We are seeing a need to modernize. And at the same time, If I look at the incredible program that the F-35 has become, that program built by eight partner nations now being purchased and flown by 20 nations is both producing. We produce over 1,300 airplanes and have backlogged for many decades to come and modernizing through existing Block 4 programs and more invention that’s coming through the base. What increasingly is happening is we’re seeing the collapsing of the domains. So I’m excited about, say, taking all these airframes that, quite frankly, start to become nodes in the battle space. Air power is so flexible that it’s great to couple with other capabilities, whether those be C2 capabilities that connect through space or down through a land-based system. We’re seeing the ability to do that at times. So some programs like the F-35 are on the ramp up for production. Others are being modernized at pace, but we see both of those activities happening at the same time.

Terry Gerton Orlando Sanchez is the president of aeronautics for Lockheed Martin Corporation. Mr. Sanchez, this air show is coming just a couple of weeks after the NATO conference in Turkey. How are you sensing that conversations among our European allies might be different for the marketplace now following that summit?

OJ Sanchez Here in Europe and amongst the NATO allies, it’s clear that the threat security environment is actually reinforcing the need for allies and partners. In addition to that, the capacity that we need and the speed that we need in order to keep our nation safe and the NATO alliance strong is also demanding that we expand the industrial base that we expanded the space that we’re all operating in. And so what we are seeing coming out of the NATO Summit or NATO 3.0 is a commitment to interoperability among the partner nations. So whether that be in my domain, like the F-16 that quite frankly we’re still producing over 4,600, still 600 flying in Europe, helping to provide that interoperabilty and also expanding supply chains and localization. So on the F35, for example, many may not know we produce the F-35 in partnership with Leonardo and deliver airplanes out of Cameri, Italy. We’ve expanded to taking the forward fuselage into Patria out of Finland. And then as you’ve seen the incredible need for defensive and offensive missile systems, we’re now expanding and announcing partnerships, whether it be with Rheinmetall on short range tactical missiles, or the center of the F-35 or looking at how we do maintenance and missile facilities for the PAC-3 system. So what we’re seeing coming out of the NATO summit is a recognition that partners matter, that interoperability is an absolute necessity and that we all need to move at pace to expand that ecosystem. And at Lockheed Martin, we’re leaning into that and that’s what I’m hearing here at Farnborough.

Terry Gerton The Sound of Freedom.

OJ Sanchez I was going to say, speaking of the sound of freedom, that was the F-35 doing its impressive first pass for the beginning of the demonstration.

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Terry Gerton That seems like a great place to leave that sound effect in. I do want to come back to what you were just talking about, though, because you were very carefully pointing out that Lockheed has production capacity kind of around the globe. And so in the U.S., we think of Lockheed as a U.S. defense prime, but you really are an international company. How challenging is it these days for the company and others like you to balance U.S. defense policy priority controls with what you’re facing in other countries that you also do business with?

OJ Sanchez Well, honestly, and I know I’m coming, reaching in there with you in D.C., there’s never been a time on the domestic space that I have seen where there has been more intention to partner across the Department of War, across the legislative branches, to both expand our own industrial base inside of the United States, as well as enable that to happen around the globe. And so we’re very grateful for the opportunities we’ve had to partner with the administration and try to expand that. Domestically, what that means is, I often tell people… I’ll often tell people that our adversaries don’t fear PowerPoint. What they fear is our production lines. And right there in Fort Worth, Texas, if you’ve never been, I’d welcome you, is a mile long factory. You can’t see from one end to the other, with over 250 airplanes being built at any given time. And in that factory, five times the speed and volume of any other fighter production line in the allied world is being produced just out of that factory. So we are a strong nation that’s producing an incredible amount of capability. Added to that, we’re partnered with many other allied nations to do what I described. And so I welcome the conversations we’re having back home around our own security, as well as how we can work with partners and allies to assure they are able to provide for that. And Lockheed Martin intends to be a big part of that going forward.

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