Was Lockheed Martin’s India CEO sacked?

(Photos: courtesy Ajai Shukla)

A Lockheed Martin F-16 IN Super Viper on display at the Aero India 2009 show in Bangalore in Feb 09

By Ajai Shukla

Business Standard, 13th July 09

With several major defence procurements blocked after the arrest, on 19th May 09, of former Ordnance Factory Board (OFB) Chairman, Sudipta Ghosh, alarmed defence contractors posted in New Delhi are now riveted by another drama.

This fortnight, Ambassador Douglas A Hartwick, CEO, Lockheed Martin India, who was spearheading the world’s largest defence manufacturer’s campaign to sell India the F-16 IN medium fighter aircraft, was withdrawn from India in an unusual hurry. Sources describe Hartwick as “having barely enough time to pack” before catching his flight out of Delhi.

Indian Ministry of Defence (MoD) sources tell Business Standard that Hartwick was removed as CEO after Lockheed Martin was found in possession of two folders containing classified information relating to defence purchases. According to this account, these folders found their way to the corporate headquarters of Lockheed Martin, in Bethesda, Maryland, USA. There, in January 2009, they were mistakenly placed on the desk of an officer unfamiliar with the Lockheed Martin’s operations in India. Reading the “Government of India, Ministry of Defence” heading on the file, the Lockheed Martin official referred the folders back to the Indian MoD in New Delhi.

Since then, a furious MoD had been trying to ascertain how Lockheed Martin obtained those folders and whether ethical standards had been flouted. Since January, through the Aero India 2009 air show in February, where Lockheed Martin displayed its products including the F-16 IN fighter, the MoD has trodden cautiously with Lockheed Martin, without actually taking action against the company. The general elections placed the controversy on the back burner; now, however, comes Hartwick’s departure.

Lockheed Martin strenuously denies possessing any India-related documents that were not already in the public domain. But in a telephone interview with Business Standard, Richard Kirkland, President of Lockheed Martin’s South Asia operations, admitted that, in early 2009, the company did write back to “the appropriate ministry” about issues that “we did not sense as understood well enough… or came through a channel that we would expect.”

Mr Kirkland explained, “We had a couple of issues that we did not understand how they would be treated in terms of (the Defence Procurement Policy – 2008) procedures. We have had occasion to ask various agencies of the Government of India for clarification about information that was contained within a larger context or larger report…”

Mr Kirkland declined to provide details of the two reports referred back to India’s MoD, but emphasised that neither related to the Indian tender for 126 Medium Multi-Role Combat Aircraft (MMRCA), worth an estimated $11 billion.

Lockheed Martin also denies that the Government of India asked, either formally or informally, for their India CEO to be replaced. Richard Kirkland insists that this is a routine turnover as Lockheed Martin moves into an “execution phase”. He said, “I have had discussions with Ambassador Hartwick as early as Aero India in Bangalore last February, about the transition of office…”

Despite Lockheed Martin’s insistence that this move was envisioned since February, Ambassador Hartwick’s successor has not yet been decided. Lockheed Martin’s spokesperson, Jeffrey Adams said, “Richard Kirkland will look after India operations until the company finds a replacement for Ambassador Hartwick.”

Douglas Hartwick is an old New Delhi hand, having served two tenures in India as a diplomat; the second of them was as the Economic and Scientific Affairs Counsellor in the US embassy from 1994-1997. He went on to serve as US ambassador to Laos before he retired, thereby obtaining the honorific of “Ambassador”. He joined Lockheed Martin in 2007.

Headquartered in Bethesda, Maryland, Lockheed Martin is the world’s largest defence corporation with annual sales in excess of $40 billion (Rs 200,000 crores). It employs 140,000 people worldwide, the bulk of them in the United States.

Lockheed Martin is pushing a range of military systems in India including the F-16 IN fighter; the F-35 Lightening II Joint Strike Fighter (JSF) as the IAF’s next generation fighter; and the Aegis Combat System for the Indian Navy’s warships. Last year India signed a contract, under the US government Foreign Military Sales (FMS) programme, to buy six Lockheed Martin C-130J Super Hercules transport aircraft, worth over a billion dollars. India is likely to exercise its option for another six C-130J aircraft.