David whatso unique about f35 . Marillyn it is the most advanced fhter in the world. David you were recently voted the 22nd most powerful woman in the entire world. Marillyn i get a note from my brother that said, well, why was oprah higher than you . Or sometng like that. David ok. Woman would you fix your tie, please . David well, people wouldnt recognize me if my tie was fixed, but ok. Just leave it this way. I dont consider myself a journalist. And nobody else would consider myself a journalist. I began to take on the life ve being an interviewerthough i have a day job of running ir a private equity fm. How do you define leadership . What is it that makes somebody tick . David since youve been the ceo, the stock has gone up roughly 330 , the market capitalization is up ughly 280 . Another company that you compete with, general dynamics, has a female ceo as well, and their stock is up about 250 since she became [applause] the ceo. Thats phebe novakovic. Do you think t women can run Defense Companies better than men, or therun all Companies Better than men . [laughter and applause] marillyn im just looking at the audience, how many women are out there clapping, but, david [cheers and applause] oh i would just say, david, its a team sport. It isnt all about me on the performance of o company, but im really proud about what our team has been able to accomplish over the last 5, 6 years. D so when you walk into the shareholders meetings, do they give you a standing ovation . They must be pretty happy. Marillyn we had some happy shareholders, yes, but th always, you know, theywayss to make sure that were constantly creating value, so its, what have you done for me lately . Dao, um. Ok. During the transition of the prident of the United States, donald trump sent out a tweet saying that your biggest produ, the f35, was too expensive. And i thcok you were out of thtry at the time . Marillyn i was. I was in israel where we were delivering their first two f35s. David so what was your reaction to the president of the unid states tweeting that you were charging the u. S. Government too much . Marillyn well, first of all, a we needed to get thocraft delivered. And, you know, one of the most interesting things was that Prime Minister netanyahu, he was at that event. Was going to get a better price on those aircraft and,now, maybe he should get a rebate so that presented a bit of a challenge. But what was important was to recognize what our president elect was communicating. He was trying to communicate to the American People that he was going to be that he was going to get good deals ha the equipment he purcd and that he was going to increase defense spending, but he was going to make sur th he spent the taxpayers dollar wisely, and so i personally engaged, my team engaged, and had a chance to have a dialogue with him. David was that the first time you ever met him or had you knownimefore . Marillyn no, id never known him before. But i had an opportunity with him. This was bhe was president , so this was in december before he camento his role in juary. So i went to maralago, i went to the trump tower. I just started the dialogue, because whats important was for him to for us to be able to answer his questions, for him to understand the pabilities that that was gonna bring our men and women in uniform, how important it was, and then what we were doing to drive the price down. David so you did give him a little discount . Marillyn we drove the price down, yes. We got the dea, and we did it in an accelerated fashion. And he definitely had an influence on that. David now, since hes been president , e budgets have gone up, and recently the budget caps have been lifted even further. The defense buanets now higher ts ever been, i think overwhen you count everything over 700 billion annually. So is this a great time to be a defense coany ceo . Marillyn well, let me just put it in perspective for you. Were certainly encouraged by the fact that our country is now spending more on defense. But if you just sort of look back over the last few years, were play catchup in a large way. We certainly want to maintain our technological superiority over our adversaries or over the potential adversaries. Ts meant for industry is that we manage through that downturn, just like any wellmanaged company, buidnt invest at the level that we would have in terms of innovation and in terms of other areas of the business because weere in a down cycle. Now with the up cycle, its time for us to really bring forth the innovations and continue to spend the efforts that whave in line with the priorities of our customers. David rightly or wrongly, many people in the public say, well, defense contractors are too expensive and they dontthe best image, you might say, some circles, maybe not in circles you travel in, but some circles, people would say Defense Companies ypare not the most popular of companies. Do you think thats an unfair image . And why do you think that imagexists in some parts of the country . Marillyn well, ill start by saying i tnk, unfortunately, that image is something that we see for large corporations and large institutes in general today. And its something that we face and have a dialogue around of how do we communicate to the American People what large corporations ti and what large instis do. And from a defense contractor standpoint, whats different for us is that things are much more transparent. You know awere no different thther fortune 500 or fortune 100 company thats engaged in the activities, but were investing in the communities where we work and live. Were spen lot on philanthropy. Were bringing a lot of economic growth. I mean, you consider you mentioned our 51 billion sales. You think about the jobs and all of that that it does for the economy and what we invest in stem education, david so to be the ceo of a Major Defense Company youre the largest defense contractor the United States government has, right . So do you need a security clearance . And how long does it take to get one of those . [laughter] marillyn well, you know, 60,000 of our employees have security clearances, so its a very important element of our business. I persally have to have ceain we have sensitive and classified information that i need to be briefeon, so i have the appropriate clearance associated with that. David so let me talk about your background. You grew up in kansas, and your father died when y were 9 years old, and you had 4 siblings. And how di mother support 5 children . Mariugyn well, it was frankly. I mean, my father was with the department of the army. My mother was the athome mom with 5 children. And it knocked the out of, you know, what was a we werewe were not we were anverage family, but it set us back a lot. I reat credit to my mother who raised 5 children on her own. And she just passed away a couple of years ago at 97, so, i mean, an incredible life that she had. [applause] david she was from alabama . Marillyn she taught us she was from alama. But she taught us the value of a dollar. We had to learn how to g onomize at a very youne. Shed send us in to pay the power bill, the electric bill. She just got her kt and said, youve got to learn how to do these things because youve got to be v it taught me to y selfreliant, i would say. David well, i was told that she used to say to you, go to the grocery stor. And bring back 7 of groceries. Marillyn yes. Thats true. Thats very true. Learn how to econoze. So i learned early how to economize, yes. David ok. So you went to the university of alama. And did you get a scholarship . You didnt have to work . Marillyn oh, no, i didnt have a scholarship. I worked nights. I worked what was called the graveyard shift, so to speak, from 11 00 at night to 7 00 in the morning, then i went to class from 8 00 to 1 00 or 2 00, and then id sleep, unless i had a date, and then i would go right back to work without slping because you can do that when youre 18 years old or 19 years old. But yes, i worked fulltime, paid my own way through school, finishedn 3 1 2 years. And, you know, you do what you had to do. David ok. So after you graduated, did you say, i want to be the ceo of Lockheed Martin . Or what did you say . Marillyn no, i started looking for a job. I took a job as an economist here in washington with the bureau of labor statistics out of college. They were in the mrost of redoing thecer price index. It was a good job for a grad student to come in. And so i actually started my career here 4 years later, you look for the next position, and i interviewed at several comnies, one of which was lockheed in marietta, georgia, and started there as a senior industrial engineer. Dao have you everun into any people from the bureau of labor statistics who, or you know, you wereng for in those days and now youre the ceo of Lockheed Martin . Have they ever called you for a job or anything since then . Marillyn no, but i do hear from them now and then. You know, this era of social media, now and then ill ge an email from sobody or i might run into somebody in the local area worked with, that was many years ago. I mean, think about it, ive been at lockheed 35 years, so that was a long time ago. David but they all say they knew you were going to be successful . They always say that. Marillyn oh, no, no. David they dont say that . Marillyn no. David so when you went to marietta, georgia, you worked your way up. You had, i think, 22 different leadership positions, so you must have been moving around a lot. M marillyn i was ietta for about 13 years. 18 months in, i was promoted to supervisor of Industrial Engineering. And at about the twoyear mark, i was pumeon a general Mana Development program. And great credit to a sponsor that e put me forward for ogram. So i spent two years rotating around the company. And at the end of e two years, i was manager over all of our production estimating and budgets. David now, at one point, your husband was unemployed. And he got a job interanew with a co and wh company was that . Marillyn he surprised me a bit. His company went out of business, d so he was out looking. We had a 5monthold baby, so we were very much hoping hed find a job. And it was a toue labor market at time. But he came home one day and said, k, i got a job. And i said, where . He said, at lockheed. And i went, what . Sorry. I said, what . Why my company . You know. But it just turned out he went to work in the we didnt really cross paths. I waing Industrial Engineering by that time. But its interting. For about 5 yearshe retired from lockheed after 5 years. David so you have given him a lot of credit for what you have been able to achieve. Because you might describe after he retired, he took on a role that sa many people woul a woman might have normally taken on, or a wife, and he took on that traditional ro. Is that fair to say . Marillyn ye i say he retired. Our kids were 3 and 6, two boys. We moved to fort worth, texas, because my job moved us. And so at the ti you know how stressful it is to have a couple of Young Children at home. I said, why dont we try you workinom home for a year . And we just never changed the model. So he became the athome dad, he was, you know, the coach, he was the scout leader, he waswent on the field trips, and he managed that because i traveled a lot in my job. We were maybe a newage family back then in the way that we worked, but it worked for us, and day our kids are in, and theyre off doing their thing. But when i said he retired, he basically was that 5year mark, he got a retirement rtk from lockheed not long ago. David so i guess hes happy with the shareholder performance, as well. Marillyn yes, he is. [laughter] david now lets talk a moment about the product i mentioned earlier, theyre fighter jets. Now ive known for a long time theres an f14, f15, f18, there was an f22. And then you come up with something called the f35. What aappened between nd 35 . [laughter] marillyn well, the fact is that aircraft are not numbered by Lockheed Martin. The u. S. Government determines soand f standing for fighter, a b for bomber, you know, that terminology is kind of general, and usually it is sequential. We hadwe won the contract with our x35, which was the experimental you know, you name them with an x or y if they were experimental or a prototype. So we had named our offering in this competition, but when they announced the winner, lockheed was the winner, and the secretary of the air force said the f35, and we were all shocked because we thought it was going to be the f23. Tso once he named it, t what number it became. David you didnt want to tell him he made a mistake, i guess, becaujust awarded the contract, but. So in the history of our country, thfe is the biggest e contract er, tens of billions of dollars, i assume. Why does it cost that much to make these planes . And what i so great about this plane . What is so unique about the f35 . Rillyn the f35a, whichis yourl variant of the aircraft, was priced at 94. 3 million, and were on a path to drive that down to 80 million by 2020 think about that. You know, think about if you fly maybe you fly a gulfstream or Something Like that, think about what you paid for that david occasionally. Marillyn think about the most sophisticated jet fighter in the world that might cost 0 million. I mean, thats pretty remarkable in my mind. It is the dvanced fighter in the world. So it is basically a force muiplier. Its a fabulous aircraft. I dont have to tell you that. Talk to some of the pilots that fly it. David r71 was a very famous plane that, i think, now is in the ai sand space museum in tthsonian. It went 6 times the speed of sound, or Something Like that. Marillyn 3 times, yeah. David very high. Theres a rumor in t Defense Press sowhere that youre making an sr72. Ht so can you tell us r now, is that true . And hypersonics would be something over mach 5. Were doing work in that technology, hn and its important tology. So thats probably all i am going to say about it. David ok. [applause] all right. Ok. Lets talk a moment about Artificial Intelligence. Presumably thats gog to be very imptant for defense contractors, as it is for other companies. Marillyn wellreits a very important that were investing in. We think our customers are looking for solutionse that technology. But in Artificial Intelligence, you cathink about were working on a helicopter that will be unmanned. So thats d opportunity. Dan unmanned helicopter . Marillyn an unmanned helicopter. We have other unmanned vehicles that we have, but that autonomy and using the Artificial Intelligence for ly flying the helicopter david whats the price for the unmanned . Is that a little bit. [laughter] all ricot, so unmanned heer, that sounds pretty novel. Marillyn but even in the cockpit of our aircraft, you know, theyre using Artificial Intelligence by fusing information in such doway that the pilont have to the human mind just cant move at the same speed as what you can get through that computing power, and so they can make the right decisions to deal with the situation. And we have such things as collision avoidance. So even on our f16s, anl be putting this on our f35, we have technology there through Artificial Intelligence that if a pilot doesnt realize that theyre about ready to hit the ground, this aircraft will take control and avoid. Weve already saved 6 pilots lives with that type of technology. So thats just a few examples of how we apply the artifceial intellig david now, one of your otptr products is helicos. You bought sikorsky helicopter from united technologies. Why did you buy it . And are they making the marine one, which is the president s helicopter, how much does that cost . Marillyn you are into the prices, arent you, david . [laughter] david im always trying to get you know, im always negotiating for a good deal. Marillyn i see. Ok, all right. Well, first of all, yes, we bought sikorsky and have been doing business with em for 40 years. So, when the opportunity came up, we took the opportunity to buy the company. Great integration into our company. Brings the black hawk helicopter, it brings the ch53, k helicopter for the marine cor, and, as you mentioned, the marine one. Im happy to say that that program is on schedule and on cost in producing that for the president. David by it costs a lot of mo make mari one because you have got to have all kinds of security things in there. So its not something you can sell to any other country, i assume. So you only make, what is it, 23 of them youre gonnmake or Something Like that . Marillyn yes, thats right. David and when araithey going to be lable . Marillyn well, well be were on a path of theyllyou know, we have to go through e test flight. We had the first flight and things like that, it takes time for them to roll out. I think its 2019 or so that theyll. I was going to mention to you, it is based on the s92, which is a great commercial helicopter. If youre interested in a helicopter, david, i could suggest one. I mean, i think theyre only around, you know, 3llion, 40 million. I mean, im sure you can do that. David maybe we can negotiate. Maybe if i can get a gd deal. Do you get a discount if you buy two or something . Marillyn we can do a deal. David whats it like to be the ceo you get about 70 of your revenue, i think, from the u. S. Government. You know, how much of your time do you have to sovnd with the u. S. Nment . How do you spend your time, lets say in a typical week, percentage time . Marillyn i would say somewhere between e 60 to 70 of my t is with strategy of the business, the customers, and engagement around the world, eling around the world on the customer side of the business. Because it is important in my role to be out meeting with not only our congressional leaders r government leaders to make sure were aligned with what their needs are and their priorities, but i travel a lot teoutside the united s 30 of our business is outside the United States with governments around the world. David you were recently voted the 22nd most werful woman in the entire world, not just business,ut everything. So when you saw that, did you say, i should be higher . Or did you s thats pretty high . I mean. On the entire planet of 3. 6 billion women . Marill you know, i dont cus that much on it, david. I get a note from my brother