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Business Economics/ 4
Current Event
Part 1- Works Cited
Jacobs, Karen. "Lockheed Sees Contract Cuts, Delays Hurting 2011." Reuters. 19 Oct. 2010.
Web. 19 Oct. 2010. <http://www.reuters.com/article/idUSTRE69I66220101019?pageNu
mber=2>.
Part 2- Summary
The article I chose concerns the economic condition of Lockheed Martin, a major entity
in the aeronautics industry and the largest government contractor company. In sight of an ailing
economy, the government has had to tighten its budget considerably, making cuts in areas such
as defense spending. Since Lockheed Martin is so intricately tied to the government, the
decrease in funding has strained the company. With the government pressured by the populace
to control deficit spending, it will be difficult for a company such as Lockheed Martin to
experience any economic growth or expansion. Moreover, Britain has recently announced that it
is making huge budget cuts in the sector of defense spending. This will make it even more
challenging for Lockheed Martin to make its sales quotas and maintain a healthy company. In
response to these developments Lockheed Martin has tried to shift the emphasis to more efficient
means of production and the trimming down of company structure. Thus far Lockheed Martin
stock values have fallen, and analysts have lowered expectations for the overall growth and
revenue of the company.
Part 3-
This article chiefly pertains to the economic aspects and repercussions of an ailing
economy for a major corporation, but it also contains several areas of socio-cultural,
technological, and political/legal interest. Throughout the article, references are made to
business cycles, such as times of economic growth or times of economic contraction. This is an
economic aspect of the article just due to the fact that the company is dealing with increase and
decreases in money supply according to the cycles. Other economic aspects include the
mentioning of stock value, which measures the success of the company, and talk of executive
buyouts, which involve both unemployment and fiscal management within the corporation. The
article also contains some socio-cultural implications, especially for workers at Lockheed
Martin. The faltering economy has strained the company, resulting in unemployment, pay cuts,
and changes in lifestyles among the employees. Furthermore, there exists a part of the article
that has political ramifications. Due to the recession, Britain has made cuts in defense spending
that will affect Lockheed Martin in trying to meet quotas with its projected aircraft sales. Thus, a
political situation is seen altering the economic outlook of a company. Finally, due to the nature
of Lockheed Martin, technological aspects pervade the article. This is illustrated by the
government’s investing in Lockheed Martin to develop a new jet fighter, which is clearly of
technological interest and is paramount in determining the future of the company.
Part 4-
Recently in class, we have been learning about economic forecasting and the meaning of
gross domestic product (GDP). The article I chose deliberates on what part of the business cycle
is currently in. Mention of low quarterly growth and falling stock shares point to a stagnant
point in the cycle, probably near an economic trough. The article also has implicit insight into
the GDP of both the United States and Great Britain. The GDP measures consumer, business,
and government purchases of final goods and services, while also taking into account the net
exports of a country. When the number of imports outweighs the number of exports and a
country’s economy, and consumers and businesses aren’t buying many goods and services, the
economy will suffer. The government has two choices: to insert stimulus in the economy by
increasing spending or to cut back on spending to reduce deficit. Either way, defense industries
such as Lockheed Martin are going to be under careful scrutiny, and government purchases of
their products will decline. The article shows this going on in both the countries of Britain and
the United States. Finally, information on Lockheed Martin’s stock shares is contained in the
article, which goes back to what we learned about the stock market in the first six weeks.
Part 5-
This article was of particular interest to me because of its relevance and importance to my
future. As a senior about to enter college, I have decided that I want to major in aerospace
engineering and work on projects for the military. One of the main companies I would be
looking at would be Lockheed Martin, so their economic performance could determine my future
career. Furthermore, this article affects more than just my life; it affects the nation as a whole.
As the largest government contractor company, Lockheed Martin serves as a good indicator of
economic health. As I said earlier, it is intricately tied to the government and our GDP, so when
it is doing well, the economy as a whole is most likely doing well. Thus, keeping a vigilant eye
on the condition of Lockheed Martin gives insight into all government contractor companies and
the entire United States economy. Anyone who is interested into entering the aeronautical field
should continue to monitor companies such as Lockheed Martin to see how their development
could affect job climate and opportunities.