updated 3/1/2004 10:04:23 PM ET 2004-03-02T03:04:23

Lockheed Martin chairman and chief executive Vance Coffman announced plans Monday to retire this summer after 37 years with the defense contractor.

Coffman, who served as Lockheed’s CEO for seven years, will be replaced by president and chief operating officer Robert J. Stevens, 52, as of Aug. 6. Coffman, 59, will remain as chairman of the company’s board until April 2005.

Lockheed spokesman Tom Jurkowsky said Coffman left by his own choice, telling the company board of directors last week that he was going to step down.

“He believes that the time was right and he wanted to allow adequate time for transition,” Jurkowsky said.

Neither Coffman or Stevens was available for comment, Jurkowsky said. In a statement, Coffman said working at Lockheed was a “great experience” and praised Stevens as “an exceptional leader.”

Some analysts surprised
The timing of the announcement surprised some analysts, who expected that Stevens would eventually ascend to CEO but thought Coffman would stay longer.

But Paul Nisbet of JSA Research said there aren’t any indications that Coffman was forced to leave.

“Things were going well, particularly in the last couple of years, so there don’t appear to be any reasons at all internally within Lockheed for him to be encouraged to leave.”

With Coffman as CEO, Lockheed grew into the nation’s largest defense contractor, winning contracts such as the multibillion-dollar Joint Strike Fighter and the F/A-22 fighter. The company is involved in space projects ranging from the shuttle to Mars missions to International Launch Services, a U.S.-Russian joint venture. It also has a thriving business in government information technology services.

Turmoil and turnaround
Coffman took over a company that was in turmoil following the 1995 merger between Martin Marietta and Lockheed Corp. The new company was burdened with nearly $12 billion in debt from the merger and a string of acquisitions, including the $2.6 billion purchase of Comsat. It also suffered a series of failed rocket launches that hurt investor confidence.

Coffman purged the company top management and elevated Stevens, then the company’s chief financial officer, to president. That move was generally applauded by investors.

Lockheed proceeded to trim its debt to about $6 billion, shed its telecommunications division and Comsat, and resurrected its sagging stock price. The company now has a record backlog of $77 million and has doubled its stock dividend.

Nisbet credited Stevens for much of Lockheed’s turnaround.

“He set up the people and procedures and very much improved the financial management of the company,” he said.

Shares of Lockheed fell 5 cents to close at $46.23 on the New York Stock Exchange. The announcement was made after the markets closed. In after-hours trading, the shares fell another 5 cents.

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