Contradicting Lockheed Martin Executive, Former Senior Military Officials Say Tax Reform Isn’t A Priority

In TYT Investigates by TYT Investigates1 Comment

On October 9, 2017, Lockheed Martin’s Marillyn Hewson appeared on a panel in Washington, D.C., at the Fortune “Most Powerful Women Summit,” alongside Ivanka Trump, Deloitte CEO Cathy Engelbert, and co-chair, Most Powerful Women International, Nina Easton. (Photo by Paul Morigi/Getty Images for Fortune)

By Michael Tracey

While Lockheed Martin’s top executive has helped push the message that President Trump’s proposed tax cuts will spur hiring, a former high-ranking military official now working in a senior capacity at the company could not identify a connection between tax cuts and defense industry job creation.

The comments came at one of the year’s premier gatherings for defense contractors, and were echoed by other former military officials in attendance who are now working in the private sector.

TYT previously reported that Lockheed Martin financial filings, and quarterly calls its executives held with Wall Street analysts, show no sign of any plans to ramp up U.S. hiring as a result of anticipated tax cuts.

Lockheed Martin Chairwoman, President, and CEO Marillyn Hewson has been a vocal participant in Trump’s efforts to push tax cuts as a way of increasing job growth in the U.S., appearing with Trump at events boosting his economic agenda, and participating in his Business Advisory Council before it disbanded in August.

In March, Hewson said that corporate tax reform “would help our nation’s defense industrial base,” and added that Lockheed’s “contributions to U.S. job creation are poised to grow” as a result. Company executives, including Hewson, belong to business groups that are actively promoting tax cuts as job creators. Lockheed has retained at least two high-power lobbying firms to press Congress for tax reform.

When asked by TYT how many jobs Lockheed Martin expects to create if Trump succeeds in lowering the corporate tax rate from its current statutory level of 35 percent to his proposed rate of 20 percent, the company’s media spokespersons have declined to respond.

At the annual Air Force Association convention, held September 18 to September 20, several former high-ranking military officialsnow working outside government—were either unable to identify a link between tax cuts and industry hiring, identified other factors that drive hiring, or reported that in private conversation industry executives are not raising taxes as a significant issue.

Gerald Murray, who served in the Air Force as chief master sergeant—the branch’s highest-ranking noncommissioned officer and personal advisor to the Air Force secretary—was asked by TYT about Lockheed Martin’s advocacy for tax cuts. Murray, now a senior director for Lockheed Martin, spent at least eight years at Lockheed as a senior manager for business development. Despite his experience in industry and the military, Murray was unable to identify a link between tax cuts and industry jobs.

Former Air Force Secretary Whit Peters, now national chairman of the Air Force Association, told TYT that in his extensive liaisons with industry leaders, the subject was hardly broached. “That’s really not come up. The key financial issue that’s coming up is the dreadful impact of this continuing resolutions, late budgets stuff,” he said.

Asked if there is a belief that a lower corporate tax rate could have an appreciable effect on overall defense sector employment levels, Peters replied: “I don’t get a sense with the defense industry that that’s something on their top of mind.”

Larry Spencer, a retired four-star general and now president of the Air Force Association, gave a similar report at the end of the three-day conference, during which he interacted with a slate of high-ranking officials, including Defense Secretary James Mattis. Spencer told TYT that lowering the corporate tax rate was never mentioned. “To be honest with you, taxes haven’t come up at all this week. If you’re asking me: Is that a priority for industry to have a lower tax rate? I don’t know, because it never came up.”

Keith Zuegel, senior director of government relations for the Air Force Association, previously served as Air Force liaison to the congressional Budget and Appropriations committees. Zuegel told TYT that in conversations he was privy to at the event, the main concern expressed was that Congress’s focus on taxes could complicate passage of a comprehensive defense appropriations bill.

In terms of advocacy for tax reform itself, Zuegel said, “I wouldn’t say we heard any of that during the conference.”

Despite record profits of $5.3 billion last year, Lockheed Martin cut its workforce from 126,000 down to 97,000. The company spent over $2 billion buying back its own stock and another $2 billion on payouts to investors in the form of dividends.

Lockheed Martin’s press office did not respond to a TYT email regarding the disparity between Hewson’s comments and Murray’s public statements.

You can find all of our reporting on this here: TYT Investigates Series: Tax Cuts & Job Creation – Lockheed Martin.

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Click here for TYT Investigates’ series on Fed Ex & UPS’ push for tax cuts as job-creation tools.


  1. Yet again another quality report well constructed, easily read.

    Thank you Mr. Tracy. From the old woman in Alaska.

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