Simmons’ Plan for Lockheed Flawed, Management Says

Harold C. Simmons, the Texas financier who wants to replace Lockheed Corp.’s directors with his own board slate, has made “simplistic” management proposals that could harm the aerospace company if implemented, Lockheed Chairman Daniel M. Tellep said Friday.

Tellep issued a statement responding to comments Simmons made Thursday during a news conference in Burbank. Simmons said if he wins the proxy fight, he would try to produce $1 billion in revenue from Lockheed’s electronic systems and technology services divisions--units with about $2 billion in assets--either by selling some operations or by increasing profit levels.

Simmons had claimed earlier that diversification within the two divisions had weakened the company. He has also said that if he wins control of the company he would sell some of its units if he cannot improve their profitability.

Simmons controls NL Industries, a Houston chemical firm that owns 18.9% of Lockheed stock and that promoted Simmons’ visit to Burbank in an attempt to attract the votes of other Lockheed shareholders. The results of the proxy battle will be made known Thursday at Lockheed’s annual meeting.

Tellep’s statement Friday said Simmons’ comments about possible asset sales “confirm our view that Simmons is fundamentally uninformed.” The technology services group, Tellep said, “represents our fastest-growing segment, with sales growth of 26% in 1989.”

Tellep said the electronic systems group provides “critical” technologies for Lockheed’s missiles, space and aeronautical businesses. He added that Lockheed shareholders would be “very poorly served” by such a sale at this time because many other firms have offered to sell electronic systems operations, glutting the market and driving down the market value.

In other developments, the Simmons camp reiterated claims that Lockheed has obstructed NL Industries’ efforts to gain access to Lockheed employees, who own nearly 19% of the aerospace firm.

Responding to previous NL requests, Tellep said Thursday that he would allow Simmons representatives to present to employees a 12-minute videotape explaining its positions. However, an NL spokesman said Friday that there is not enough time to prepare a 12-minute tape and that Lockheed would not allow NL to show a 24-minute tape it had already prepared.