By Claire Zillman, fortune.com
Lockheed Martin has found itself near the center of the international furor over the alleged murder of Saudi journalist Jamal Khashoggi. That’s because the defense contractor is an arms supplier to Saudi Arabia, whose regime, led by Crown Prince Mohammed bin Salman, is suspected of being responsible for the heinous and extrajudicial killing of Khashoggi, a Saudi critic.
At Fortune‘s Most Powerful Women International Summit in Montreal, Canada on Monday, Lockheed CEO Marillyn Hewson fielded questions about how she was weighing Lockheed’s weapons sales to Saudi Arabia in the wake of Khashoggi’s death.
The journalist’s killing—which consisted of choking and dismemberment, according to Turkish officials—was an “unacceptable situation” and “egregious,” Hewson said. But her condemning of the act isn’t translating to a halt of Lockheed sales to Saudi.
“We do business through the U.S. government,” Hewson said. “We take their lead on what we sell to 70 countries. That’s what we will do in this case; it’s a matter of following the government’s lead.”
Asked what it would take for Lockheed to back out of selling to a foreign government, Hewson reiterated that the structure of arms deals typically means Lockheed does not do business with those kinds of international buyers directly. “We don’t sell to them, we sell to the [U.S.] government, and then the government sells to a country,” she said.
The Trump administration has so far signaled that the October killing of Khashoggi will not disrupt a $110 billion arms deal between the U.S. and Saudi Arabia. President Donald Trump has claimed that the arms deal will create 500,000 U.S. jobs and that canceling the deal would put those opportunities in jeopardy. At the same time, documents from Lockheed and fellow defense firm Raytheon estimate that the deal will create hundreds—rather than hundreds of thousands—of jobs, according to Reuters. The deal will have a multiplier effect on new jobs and existing ones, meaning it could ultimately create between 84,000 and 168,000 jobs, according to Reuters’s estimates, or one-fifth to one-third of the total Trump has been touting.
There is, of course, lots at stake for Lockheed in the fate of the deal, since Saudi is a significant buyer of Lockheed’s jets, bombs, and weapons systems. The firm first did business with Saudi Arabia in 1965, and its 2019 and 2020 sales to the kingdom totaled about $900 million. For reference, the defense firm, run by Hewson since 2013, made $14.3 billion the third quarter of this year.