Lockheed Corporation

Lockheed Corporation was a major American aerospace manufacturer whose history combined experimental aircraft design, large-scale military production, commercial aviation, missiles, space systems, and highly classified advanced-development work. The corporation described by this article was founded in Hollywood, California, in December 1926 as the Lockheed Aircraft Company. It was a new enterprise, although it drew on technology associated with an earlier Loughead aircraft business founded by Allan Loughead and his brother Malcolm in 1912. That earlier company operated independently until 1920 and should not be conflated with the later corporation. The 1926 company was established by Allan Loughead, John Northrop, Kenneth Kay, and Fred Keeler. It adopted the spelling “Lockheed” phonetically to reduce pronunciation problems and moved to Burbank in 1928. Its early success came from the Vega, a fast, efficient monoplane that became associated with record flights by aviators including Amelia Earhart, Wiley Post, and George Hubert Wilkins. Lockheed then broadened its civil portfolio with the Model 10 Electra, Electra Junior, and Super Electra. The Model 14 also provided the basis for the Hudson bomber, which served British and American forces before and during the Second World War. The Great Depression severely damaged the aircraft market. Detroit Aircraft Corporation, which had acquired a controlling interest in Lockheed in 1929, failed, and an investment group led by Robert E. Gross, Courtlandt S. Gross, and Walter Varney acquired the company from receivership in 1932. Robert Gross became chairman of the reorganized Lockheed Aircraft Corporation in 1934. During the Second World War, Lockheed and its Vega subsidiary produced large numbers of aircraft, including the P-38 Lightning, Hudson, Ventura, and aircraft built under license. The P-38, developed under the direction of Clarence “Kelly” Johnson, served as a fighter, interceptor, ground-attack aircraft, and tactical bomber. Lockheed’s postwar civil aviation landmark was the Constellation, developed with Trans World Airlines. Its pressurized cabin, long range, and distinctive triple-tail configuration made it one of the defining piston-powered airliners of the era. The company also pursued military transports, jet fighters, missiles, and space-related systems. Its C-130 Hercules, first flown in 1954, became one of the world’s most durable military transport platforms. Other notable Cold War programs included the F-104 Starfighter, C-141 Starlifter, C-5 Galaxy, Polaris submarine-launched ballistic missile, and later Poseidon and Trident missile systems. The company’s Advanced Development Division, widely known as Skunk Works, became central to its reputation. Operating with unusual autonomy and secrecy, the division produced the P-80 Shooting Star, U-2, SR-71 Blackbird, and F-117 Nighthawk, among other advanced systems. These programs established Lockheed as a leading contractor for high-performance and low-observable aircraft. Lockheed nevertheless experienced serious financial and managerial difficulties. The C-5 Galaxy and L-1011 TriStar encountered delays, technical problems, and cost pressures. The TriStar was also affected by delays in the development of its Rolls-Royce engines. Losses associated with these programs, the canceled AH-56 Cheyenne helicopter, and shipbuilding contracts pushed the company toward insolvency in the early 1970s. Congress approved a federal loan guarantee in 1971, allowing Lockheed to avoid collapse; the company later repaid the guaranteed loan and associated fees. The corporation was also damaged by bribery investigations covering aircraft sales and political contributions from the late 1950s through the 1970s. Revelations that Lockheed officials had made improper payments to foreign officials caused political crises in several countries, contributed to the resignation of chairman Daniel J. Haughton, and helped generate support for the Unite…

The Lockheed Corporation’s lineage has two distinct stages. Allan and Malcolm Loughead operated an earlier aircraft enterprise from 1912 to 1920, building aircraft and providing sightseeing flights in California. The business failed after the First World War when surplus aircraft depressed prices. The later Lockheed company was founded in 1926 by Allan Loughead, John Northrop, Kenneth Kay, and Fred Keeler. The new company used the Lockheed spelling and developed the Vega, an aircraft noted for speed, efficiency, and record-setting flights. It relocated from Hollywood to Burbank in 1928 and expanded rapidly before Detroit Aircraft acquired control in 1929. The Depression brought Detroit Aircraft into bankruptcy. In 1932, Robert E. Gross, Courtlandt S. Gross, Walter Varney, and associated investors bought the company from receivership. The reorganized Lockheed Aircraft Corporation entered a period of sustained growth under Robert Gross. Its Model 10 Electra and related designs expanded the civil market, while the Model 14 Super Electra formed the basis for the Hudson bomber. Lockheed and its Vega subsidiary became major wartime producers, manufacturing nearly 19,300 aircraft during the Second World War. The P-38 Lightning was the company’s most prominent wartime design and served across multiple combat roles. After the war, Lockheed capitalized on its work with Trans World Airlines to produce the Constellation, a pressurized long-range airliner that helped shape postwar intercontinental travel. The company also explored large transports, including the unsuccessful R6V Constitution. During the early jet age, its secretive Advanced Development Division developed the P-80 Shooting Star. The division later became known as Skunk Works and developed a sequence of influential high-speed and stealth aircraft. The Cold War expanded Lockheed’s dependence on government procurement. The C-130 Hercules became a long-lived military transport, while the F-104 Starfighter established a reputation for extreme performance. Lockheed also developed the C-141 and C-5 strategic transports and became a principal developer of submarine-launched ballistic missiles, beginning with Polaris and continuing with Poseidon and Trident. Reconnaissance and stealth projects such as the U-2, SR-71, and F-117 reinforced the company’s position in classified aerospace work. The 1960s and 1970s exposed the risks of large, technically ambitious programs. The C-5 experienced developmental and structural difficulties, while the L-1011 TriStar suffered schedule and engine problems and faced intense competition from the DC-10. The canceled AH-56 Cheyenne, shipbuilding work, and other losses added to the pressure. In 1971, the United States enacted a loan-guarantee measure intended to prevent Lockheed’s insolvency. The assistance remained controversial because it supported a private corporation with public backing, but Lockheed eventually repaid the guaranteed loan and fees. Bribery investigations further damaged the corporation. Senate inquiries and public disclosures in the mid-1970s established that Lockheed representatives had made improper payments in connection with foreign aircraft contracts. The affair contributed to political turmoil in West Germany, Italy, Japan, and the Netherlands, damaged confidence in corporate governance, and preceded the resignation of chairman Daniel Haughton. In the United States, the controversy helped shape the Foreign Corrupt Practices Act. Lockheed adopted its corporate name in 1977 and continued operating as a diversified aerospace and defense company. It remained active in aircraft, missiles, electronics, and space systems, but the industry’s consolidation eventually led to its 1995 merger with Martin Marietta. The resulting Lockheed Martin inherited many of Lockheed’s programs, facilities, technologies, and organizational traditions, including the Skunk Works legacy.

1. 1995Merger with Martin Marietta

   Lockheed combines with Martin Marietta to form Lockheed Martin.

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2. 1977Company renamed Lockheed Corporation

   The company adopts the Lockheed Corporation name.

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3. 1976Bribery scandal becomes public

   Senate investigations and disclosures expose improper payments associated with foreign aircraft sales.

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4. 1971Emergency loan guarantee enacted

   Congress and the Nixon administration approve federal backing intended to prevent Lockheed’s insolvency.

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5. 1956Polaris missile development contract

   Lockheed receives a contract to develop the Polaris submarine-launched ballistic missile.

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6. 1954C-130 Hercules first flight

   The four-engine transport flies for the first time and becomes one of Lockheed’s most enduring products.

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7. 1943Skunk Works development tradition begins

   Lockheed’s secret advanced-development work produces the P-80 Shooting Star program.

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8. 1934Robert E. Gross becomes chairman

   The reorganized Lockheed Aircraft Corporation enters a long period of growth under Gross.

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9. 1932Reorganization after Detroit Aircraft bankruptcy

   Investors led by Robert and Courtland Gross acquire the company from receivership.

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10. 1928Move to Burbank

    The company relocates to Burbank, California, and rapidly expands Vega production.

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11. 1926Lockheed Aircraft Company founded

    Allan Loughead, John Northrop, Kenneth Kay, and Fred Keeler establish the company in Hollywood.

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12. 1920Earlier company closes

    The earlier Loughead aircraft business folds after postwar surplus aircraft depress the market.

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13. 1912Earlier Loughead aircraft enterprise begins

    Allan and Malcolm Loughead begin operating an earlier, separate aircraft company that later provided part of the family’s aviation legacy.

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High-technology American aerospace and defense manufacturer, combining mass-production aircraft programs with classified advanced development and strategic missile systems.

• VegaCivil aircraft1927

  The Vega was Lockheed’s first major production success. Its streamlined monoplane design became associated with long-distance and record-setting flights and helped establish the company’s reputation for efficient, high-performance aircraft. The type was flown by prominent aviators including Amelia Earhart and Wiley Post.

• P-38 LightningMilitary fighter aircraft1939

  A twin-engine, twin-boom fighter developed under Clarence Johnson, the P-38 served as an interceptor, air-superiority fighter, ground-attack aircraft, and tactical bomber during the Second World War. It remained in production throughout American participation in the war and became one of Lockheed’s defining wartime designs.

• ConstellationCivil airliner1943

  Developed with Trans World Airlines, the Constellation was a pressurized, long-range piston airliner. Its performance and distinctive triple-tail layout made it a landmark of postwar commercial aviation before jet airliners transformed the market.

• P-80 Shooting StarJet fighter aircraft1944

  The P-80 was developed secretly by Lockheed’s Advanced Development Division and became the first American jet fighter to achieve an aerial combat kill. It marked the beginning of the Skunk Works tradition, although the aircraft was later outclassed by newer designs.

• C-130 HerculesMilitary transport aircraft1954

  The C-130 is a four-engine military transport designed for logistics, troop movement, cargo delivery, and operations from relatively austere airfields. Its adaptability and durability made it one of the most widely used and long-lived aircraft families associated with Lockheed.

• F-104 StarfighterSupersonic fighter aircraft1958

  The F-104 was a high-performance interceptor designed for speed and altitude. It became one of the earliest operational fighters capable of sustained Mach 2 performance and was adopted by the United States and several allied air forces.

• C-5 GalaxyStrategic military transport1968

  The C-5 was developed as a very large strategic airlifter. Its program encountered developmental and structural problems, illustrating the technical and financial risks of Lockheed’s ambitious 1960s military projects, but the type became an important heavy-transport platform.

• SR-71 BlackbirdStrategic reconnaissance aircraft1962

  Developed by Skunk Works, the SR-71 was a high-altitude, high-speed reconnaissance aircraft designed to avoid interception through performance and specialized engineering. It became an enduring symbol of Lockheed’s classified advanced-development capability.

• F-117 NighthawkStealth attack aircraft1978

  The F-117 was a pioneering operational stealth aircraft developed through Lockheed’s advanced-development organization. Its faceted shape and low-observable design demonstrated the military value of reducing radar detectability.

• 1995Merge with Martin MariettaM&A

  The aerospace and defense industry was consolidating, and combining the two companies offered broader capabilities across aircraft, missiles, space, and defense systems.

  What changed. Lockheed merged with Martin Marietta to create Lockheed Martin.

  Aftermath. Lockheed Corporation ceased to exist as an independent company, while its programs and organizational heritage continued within Lockheed Martin.

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• 1971Seek federal loan guaranteesOther

  Large losses connected with the L-1011 TriStar, C-5, helicopter, and shipbuilding programs left Lockheed heavily indebted and threatened its solvency.

  What changed. Lockheed sought government-backed financing, and the United States enacted emergency legislation providing a loan guarantee framework.

  Aftermath. The measure generated intense debate about public support for private defense companies and commercial aerospace risk. Lockheed later repaid the guaranteed loan and associated fees.

  • McDonnell Douglas — McDonnell Douglas opposed the legislation, expressing concern that government support could distort competition and procurement.
  • General Electric — General Electric also opposed the measure in the congressional debate.
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• 1976Lockheed bribery scandalsControversy

  Investigations revealed that Lockheed officials had made improper payments and contributions to foreign officials and intermediaries in connection with aircraft sales. The disclosures caused political crises in West Germany, Italy, Japan, and the Netherlands, intensified scrutiny of defense contracting, contributed to Daniel Haughton’s departure, and helped build momentum for the United States Foreign Corrupt Practices Act.

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• 1995Lockheed merges with Martin Marietta

  The merger combined the two aerospace and defense companies to form Lockheed Martin and ended Lockheed Corporation as an independent entity.

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• 1971Lockheed receives federal loan guarantee to support the L-1011 program

  The United States approved emergency loan guarantees after Lockheed faced severe financial pressure from commercial and defense programs.

  RegulationOther
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1. Lockheed Corporation
2. Lockheed bribery scandals