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THE LOCKHEED-MARTIN MERGER : PROFILE: NORMAN R. AUGUSTINE : His Success Is Likely to Turn on a Scalpel

August 31, 1994|DAVID W. MYERS and STUART SILVERSTEIN | TIMES STAFF WRITERS

Norman R. Augustine, the native Coloradan designated to take the helm of the proposed Lockheed Martin defense behemoth within a few years, is a man of many talents.

An author and nature photographer, Augustine also likes to go dog-sledding and mountain climbing. He plays a solid game of tennis too.

But the skill that most likely will determine his success at the head of the merged company involves how well he can wield a corporate scalpel. Analysts say that to make the Lockheed-Martin Marietta merger successful, the new company will have to slash thousands of jobs.

"This merger can't create more revenue. It can only pay off through reduced costs, and that means people" will be laid off, said Robert D. Paulson, who heads the aerospace industry practice for the consulting firm McKinsey & Co. in Los Angeles.

Based on Augustine's recent background and his book "Augustine's Laws," it's clear that the 59-year-old executive won't shrink from the task. In the executive's 1983 book of business aphorisms, Law NO. 5 pronounces: "One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output."

Moreover, Augustine engineered Martin Marietta's $3-billion purchase of General Electric Co.'s huge aerospace division last year, then quickly moved to close 10 U.S. plants and slash 2,000 jobs he considered duplicative. That comes along with other cuts that would bring the company's overall work force reduction to about 11,000 during 1993 and '94.

But not everyone is impressed with how Augustine handled the layoffs and cut costs. "He hasn't done much with the General Electric aerospace business" acquired by Martin Marietta in 1993, said one aerospace analyst who asked not to be identified.

Augustine won't bear full responsibility for the cuts immediately. Lockheed Chief Executive Daniel M. Tellep, 62, will initially head the new Lockheed Martin if the merger is completed successfully.

Yet even before the merger was announced Tuesday, directors of the two companies had already agreed that Augustine would succeed Tellep upon the elder executive's retirement. And observers say it would be Augustine who would chart the new aerospace behemoth's course into the next century.

At this point, the top executives of the proposed merger partners say they don't know how many of their combined work force of 170,000 employees would lose their jobs.

Known as a straight talker, Augustine explained his approach to management in "Augustine's Laws," which he wrote while still a Martin Marietta vice president.

The book grabbed the interest of executives and policy-makers both inside and outside the industry and, as one of his longtime business associates said, "provides a real good window into Norman's soul."

Among Augustine's "laws":

* "It is better to be the reorganizer than the reorganizee."

* "The optimum committee has no members."

Augustine is known as a tireless worker. When he travels out of town, his staffers every day send him by overnight mail briefcases filled with new paperwork to review.

Don Fuqua, a former Democratic congressman from Florida who has known Augustine for more than 20 years and who now is president of the Aerospace Industries Assn., also recalls the long hours Augustine put in as head of an advisory panel named by President George Bush to study the nation's space program.

As Fuqua, who also served on the committee, tells it, Augustine often would hold meetings until 10 or 11 at night. Then, Fuqua said, Augustine would write up the panel's findings by himself that night and present his draft in time for breakfast meetings the following the day.

"I didn't see when he had the time to do all of this. It impressed me," Fuqua said.

While Tellep is a lifetime employee of Lockheed, Augustine has spent most of 36 years in the industry moving back and forth between jobs in the private and public sectors--a background that many analysts say gives Augustine an edge because he knows how the defense game works from both sides of the fence.

Augustine, who holds bachelor's and master's degrees in aeronautical engineering from Princeton University, got his first aerospace job with what was then Douglas Aircraft Co. in 1958. He later put in several stints with the government--first as assistant director of defense research and engineering at the Defense Department from 1965 to 1970, and finally as Army undersecretary in the mid-1970s.

In 1977, he joined Martin Marietta as vice president of aerospace technical operations. By December, 1987, he was elevated to chief executive, and he took on the added title of chairman early the following year.

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