My answer to How are companies that start out as large corporations started?
Answer by Ken Larson:
Those companies did not start out as huge as they are today.
The ones you have mentioned were started small by technical innovators, grew, and went public.
Lockheed, in particular, became mammoth by acquisition, swallowing up dozens of firms when the government loosened its philosophy on anti-trust in the defense industry.
Government contracting has made many of these firms huge – not necessarily profitable. They pass on immense overhead and general and administrative expenses to the taxpayer in managing immense operations worldwide.
I was Chief of Central Cost Control at the Martin Marietta Corporation during the bidding war called the “PAC Man Defense” as huge aerospace companies jockeyed for control of each other.
Lockheed eventually acquired Martin Marietta in one of the biggest defense company acquisitions in history. Slapping an engineering firm (Lockheed) together with a firm dominated by a Finance Organization (Martin Marietta) was an inefficient and difficult way to a huge taxpayer funded result that still operates enormously inefficient today on cost plus and time and material programs like the F-35.
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