The story of Lockheed Martin begins not in a boardroom or an investment bank but in a rented garage in Santa Barbara, California, in 1912, where brothers Allan and Malcolm Loughead — who would later Anglicize their surname to Lockheed — built their first seaplane from scratch using hand tools and raw intuition. That aircraft, the Model G, carried its first paying passenger on a ten-minute flight over San Francisco Bay in 1913, generating $10 in fare — not a bad return on a hand-built airplane. The brothers dissolved their first company during the slowdown following World War I and tried again in 1926, forming the Lockheed Aircraft Company in Hollywood, California. Their Vega monoplane, designed by the brilliant Jack Northrop, became a sensation of the aviation age: Amelia Earhart flew a Vega on her solo transatlantic flight in 1932, and Wiley Post circled the globe in one the following year. Those achievements put Lockheed on the map as a builder of genuinely advanced, record-setting aircraft at a time when aviation was the technological frontier equivalent of what software has been to recent generations.
The company was acquired out of receivership during the Depression by a group of investors led by Robert Gross for the improbably small sum of $40,000 in 1932, and it was under Gross's leadership that Lockheed grew into a genuine industrial power. The Hudson bomber and Ventura patrol aircraft became critical assets for the British Royal Air Force during the early years of World War II, years before American entry into the conflict. The P-38 Lightning, with its distinctive twin-boom, twin-engine configuration, became one of the most capable American fighter aircraft of the war and made Lockheed a household name — or at least a newsreel staple — across the United States. By the war's end, Lockheed had produced over 19,000 aircraft, employed tens of thousands of workers, and firmly established itself as one of America's premier aerospace manufacturers.
The parallel story of Martin Marietta begins with Glenn L. Martin, an Ohio-born aviation pioneer who built his first aircraft in 1909 and incorporated the Glenn L. Martin Company in 1912 — the same year the Loughead brothers built their garage seaplane. Martin's company built flying boats and bombers for the military throughout both World Wars, producing the B-26 Marauder medium bomber that flew more than 110,000 combat missions during World War II. After the war, Martin pivoted toward missiles and space systems as aviation technology shifted toward jets and rockets. In 1961, Martin Company merged with the American-Marietta Corporation — a maker of construction materials and industrial chemicals — to form Martin Marietta, creating a diversified industrial company with aerospace roots. That combination proved strategically wise as the Space Race began generating enormous government demand for launch vehicles and space systems: Martin Marietta built the Titan missile family, which served as both an intercontinental ballistic missile and the primary launch vehicle for NASA's Gemini program, carrying the astronauts who developed the spacewalk and orbital rendezvous techniques that made the Moon landings possible.
The modern Lockheed Martin came into existence on March 15, 1995, when Lockheed Corporation and Martin Marietta completed a merger valued at approximately $10 billion, creating a company with combined revenues of about $23 billion and approximately 170,000 employees. The merger was the product of two forces: the post-Cold War defense drawdown, which had shrunk the defense budget and created pressure for consolidation among the dozen-plus prime contractors that the Pentagon could no longer sustain at Cold War spending levels, and the vision of Norman Augustine — then chairman and CEO of Martin Marietta — who famously predicted in his 1987 book that the American defense industry would consolidate from many firms to just a handful of major primes. Augustine was both prophet and architect: he led the Martin Marietta side of the merger negotiations and became the first CEO of the combined Lockheed Martin, retiring later that year with the company's foundation established. The Clinton administration approved the merger over the objections of some antitrust advocates, accepting the argument that the defense industry's customer — the U.S. Government — was capable of maintaining competitive discipline even in a consolidated market.