david: you think that women can run defense companies better than men, or they can run all companies better than men? [applause] marillyn: it is a team sport. it isn't all about me. david: donald trump sent out a tweet saying your biggest product, the f-35, was too expensive. marillyn: my team engaged and had a chance to have a dialogue with them. david: what is so unique about the f-35? marillyn: it is the most advanced fighter in the world. david: you were recently voted the 22nd most powerful woman in the entire world. marillyn: i get a note from my brother that says, why was oprah higher than you? [laughter] >> will you fix your tie please? >> well, people wouldn't recognize me if my tie was fixed, but ok.

i'll just leave it this way. all right. ♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job running a private equity firm. how do you define leadership? what is it that makes somebody tick? ♪ since you have been the ceo, the stock has gone up roughly 330%, the market capitalization is up roughly 280%, another company you compete with, general dynamics, has a female ceo as well and their stock is up 250% since she became -- [applause] david: ceo. you think that women can run

defense companies better than men, or they can run all companies better than men? [laughter] [applause] marillyn: i was looking at the audience -- how many women are out there clapping? [cheers and applause] marillyn: oh, ok. i would say, david, it is a team sport. it is not all about me. we are proud of what our team has been able to accomplish over the last five years, six years. david: when you walk into shareholders' meetings, do they give you a standing ovation? they must be pretty happy. happyyn: we have some shareholders, yes, but they always keep a bead on us to make sure we are constantly creating value, so it is what have you done for me lately? [laughter] david: ok. during the transition of the president of the united states, donald trump sent out a tweet saying your biggest product, the f-35, was too expensive. and i think you were out of the country at the time? marillyn: i was. i was in israel where we were

delivering their first two f-35's. david: so what was your reaction to the president of the united states tweeting that you were charging the u.s. government too much? marillyn: first of all, we needed to get those aircrafts delivered. the most interesting thing was that prime minister netanyahu , he was at that event. he asked me about the fact our new president was going to get a better price on those aircraft and maybe he should get a rebate on the ones we were delivering. [laughter] marillyn: so that presented a bit of a challenge. but what was important was to recognize what our president-elect was communicating. he was trying to communicate to the american people that he was going to be -- that he was going to get good deals on the equipment he purchased and that he was going to increase defense spending but he was going to spend the taxpayer's dollar wisely, so i personally engaged, my team engaged, and had a

chance to have a dialogue with him. david: so you did give him a little discount? marillyn: we drove the price down. we got the deal done and we did it in an accelerated fashion. he definitely had an influence on that. david: now, since he has been president, the defense fund is higher than it has been, over $700 billion annually, so is this a great time to be a defense company ceo? marillyn: well, let me just put it in perspective for you. we are certainly encouraged by the fact that our country is now spending more on defense. but if you look back at the last few years, we are playing catch-up in a large way. we certainly want to maintain our technological superiority over adversaries or potential adversaries. what it has meant for the industry is we manage through the downturn, just like any well-managed company, but we didn't invest at the level we would have in terms of innovation and other areas of the business because we were in a down cycle. now with the up cycle, it is time for us to really bring forth the innovations and continue to spend in line with the priorities of our customers.

david: do you need a security clearance, and how long does it take to get one of those? [laughter] marillyn: well, you know, 60,000 of our employees have security clearances, so it is an important element of our business. i personally have had to have certain -- there is classified information i need to be briefed on, so i have the appropriate clearance associated with that. david: let me talk about your background. you grew up in kansas, and your father died when you were nine years old, and you had four siblings, and how did your mother support five children? marillyn: well, it was tough, frankly. my father was with the department of the army. my mother was the at-home mom with five children. it knocked the props out of what was a -- we were an average family, but it set us back a lot. i give great credit to my mother who raised five children on her own. she just passed away a couple of

years ago at 97, so an incredible life that she had. [applause] david: wow. she was from alabama? marillyn: she was from alabama. but she taught us the value of a dollar. we had to learn how to economize at a very young age. and she would send us into pay the power bill, the electric ill. she got her kids out and said you have to learn how to do these things because -- it taught me to be very self-reliant, i would say. david: i was told she used to say to you, go to the grocery store. here are five dollars and bring back seven dollars worth of groceries. [laughter] marillyn: yes. that is true. that is very true. learn early how to economize. i learned early how to economize. david: you went to the university of alabama. did you get a scholarship? did you have to work? marillyn: oh no, i didn't have a dollar ship. i worked nights. -- scholarship. i worked nights. i worked what is called the graveyard shift from 11:00 at night to 7:00 in the morning, then i went to class from 8:00 to 1:00 2:00, then i would

sleep, unless i had a date, then i would go back to work without sleeping because you can do that when you are 18 years old or 19 years old. i worked full-time, paid my way through school, finished in 3.5 years. and, you know, you do what you had to do. david: after you graduated, did you say i want to be the ceo of lockheed martin, or what did you say? [laughter] marillyn: no, i started looking for a job. i took a job as an economist in washington at the bureau of labour statistics out of college. they were in the midst of redoing the consumer price index. it was a good job for a grad student to come in. i started my career here. four years later, i interviewed at several companies, one of which was lockheed. that was in marietta, georgia. i started there as a senior industrial engineer. david: when you went to marietta, georgia, you worked your way up. you had 22 different leadership positions, so you must have been moving around a lot. marillyn: i was in marietta for about 13 years. 18 months in, i was promoted to supervisor of industrial

engineering. about the two-year mark, i was put on a general management development program, great credit to a sponsor, he put me forward for the program. so i spent two years rotating around the company. and at the end of the two years, i was manager over all of our production and estimating -- production estimating and budgets. david: at one point, your husband was unemployed. he got a job interview with the company, and what company was that? marillyn: he surprised me a bit. his company went out of business, so he was looking for a job. we had a five-month-old baby and we were pretty much hoping he would find a job. it was a tough labor market at the time. but he came home one day and said ok, i got a job. i sent, where? he said, lockheed. i said, what? why my company? it just turned out he went to work in the finance department. we did not really cross paths. i was running industrial engineering by that time. but it is interesting. for about five years, he retired from lockheed after five years.

david: so you have given him a lot of credit for what you have been able to achieve. you describe that after he retired, he took on a roll that many people would have said a woman, wife, would have taken on. he took on that traditional role. is that fair to say? marillyn: i say he retired. our children were three years old and six years old. two boys. we moved from marietta, georgia to fort worth, texas, because my job moved us. at the time -- you know how stressful it is to have young children at home. i said, why don't we try you working from home for a year? we just never changed the model. he became the at-home dad, the coach, the scout leader, went on the field trips, and he managed that because i travel a lot. we were maybe a new age family back then in the way that we worked, but it worked for us, and today our kids are in their 20's and they are off doing their thing. when i said he retired, he basically at that five-year

mark, he got a retirement check from lockheed martin not long ago. five years, right. david: so i guess he is happy with the shareholder performance, as well. [laughter] marillyn: yes, he is. david: it costs a lot of money to make because you have to have all kinds of security things in there. marillyn: that is right. it is based on a great commercial helicopter. if you are interested in a helicopter, i suggest you look at it. david: i guess i could get a good deal. do i get a discount if you buy two or something? [laughter] marillyn: we can do a deal. ♪

david: let's talk a moment about the product i mentioned earlier, fighter jets. i have known for long time there is an f-14, f-15, f-18, f-22, and then you had come up with something called an f-35. what happened between 22 and 35? [laughter] marillyn: the fact is that aircraft are not numbered by lockheed martin. the u.s. government determines what the number is. so "f" standing for fighter, "b" for bomber, that terminology is general. and usually it is sequential. we won the contract with our x-35, which was the experimental -- you name them with an "x" or "y" if they are experimental or a prototype. we had named our offering in this competition, but when they announced the winner, lockheed was the winner, and the secretary of the air force said,

the f-35, and we were all shocked because we thought was going to be the f-23. so once he named it, that is what number it became. david: you didn't want to tell him he made a mistake because of the contract. [laughter] david: in the history of our country, this is the biggest defense contract ever, tens of billions of dollars, i assume. why does it cost that much to make these planes, and what is so great about this plan? what is so unique about the f-35? marillyn: the f-35a was priced at $94.3 million, and we are on a path to drive that down to $80 million by 2020. think about that. think about if you fly gulfstream or something like that, think about what you paid for that -- [laughter] david: ok. marillyn: think about the most sophisticated jet fighter in the world that may cost $80 million. i mean, that is pretty remarkable in my mind. it is the most advanced fighter in the world, a force multiplier.

it is a fabulous aircraft. i do not have to tell you that. talk to some of the pilots who fly it. david: the sr-71 is a famous plane that is now in the air and space needs them in the -- museum in the smithsonian. it went six times the speed of sound. something like that. marillyn: three times. david: very high. there was a rumor in the defense press somewhere that you are making an sr-72. so can you tell us right now, is that true? [laughter] marillyn: you know, we are working on hypersonics, s would be something over mach 5. we are doing work on that technology, important technology, so that's probably all i am going to say about it. [applause] david: ok. let's talk a moment about artificial intelligence. presumably that will be very important for defense contractors as it is for other companies. marillyn: it is an important area we are investing in. we think our customers are looking for solutions to use that technology.

but in artificial intelligence, you can think about -- we are working on a helicopter that will be unmanned. that's an opportunity. david: an unmanned helicopter? marillyn: unmanned helicopter. we have other unmanned vehicles that will use autonomy and artificial intelligence for the actual flying. david: what is the price for the unmanned? [laughter] david: that sounds pretty novel. marillyn: even in the cockpit of our aircraft, they are using artificial intelligence by fusing information in a way the pilot doesn't have to -- the human mind cannot move at the same speed as what you can get through that computing power, so they can make the right decisions to deal with the situation. we have such things as collision avoidance, so even on f-16's, and we will put this on our f-35, we have artificial intelligence that if a pilot is not realizing that they are not ready to hit the ground, this aircraft will take control. we have already saved six

pilots' lives with that technology. that's just a few examples of how we apply the artificial intelligence. david: one of your other products is helicopters. you bought sikorsky helicopter from united technologies. why did you buy it, and how much e, theine on president's helicopter, how much did that cost? marillyn: you are into the prices, aren't you, david? [laughter] david: i'm always negotiating for a good deal. marillyn: i see, all right. first of all, yes, we bought sikorsky and have been doing business with them for 40 years. when the opportunity came up, we took the opportunity to buy the company. great integration into our company. it brings the black hawk helicopter, the ch-53, the marine corps helicopter, and , as you mentioned, the marine one. i'm happy to say that that program is on schedule and on cost in producing that. david: it costs a lot of money to make marine one because you

have got to have all kinds of security things in there. so it's something you cannot sell to any other country, i assume. you only make -- 23 or something you will make? marillyn: that's right. david: when will they be available? marillyn: i think it's 2019 or so. i was going to mention to you, 2, whichsed on the s-9 is a great commercial helicopter. if you are interested in a helicopter, i could suggest one. [applause] [laughter] marillyn: they are only around $35 million, $40 million. i'm sure you can do that. david: maybe we can negotiate. maybe if i can get a good deal. do you get a discount if you buy two? [laughter] marillyn: we can do a deal. david: when you started out, were you often the only woman in the room at lockheed? marillyn: i was. but after that, once you are contributing as part of the team, it was no longer a factor. david: you were recently voted the 22nd most powerful woman in the entire world. did you say i should be higher, or did you say that is pretty high? [laughter] marillyn: i got a note for my brother about why was oprah higher than you or something like that. [laughter] ♪

david: what is it like to be the ceo of our nation's largest defense contractor? you get about 70% of your revenue, i think, from the u.s. government. how much of your time do you have to spend with the u.s. government? how you spend a typical week, percentage time? marillyn: i would say it is --

somewhere between 60% to 70% is with strategy, the customers, and engagement around the world, traveling around the world on the customer side of the business. because it is important in my role to be out meeting with not only our congressional leaders and our government leaders to make sure we are aligned with what their needs are and their priorities, but i travel a lot outside the united states. 30% of our business is outside the united states with governments around the world. david: you were recently voted the 22nd most powerful woman in the entire world, not just business, everything. when you saw that, did you say, i should be higher? [laughter] david: or did you say that is pretty high? and how does it feel to be the 22nd most powerful female on the entire planet of 3.6 billion women? marillyn: you know, i don't focus that much on it, david. i got a note from my brother that said, well why was oprah higher than you or something like that. [laughter] david: ok. marillyn: but that is not

something that focus on. there are lots of lists. it comes down to having the privilege of leading a national asset and a company that is doing some of the most important and interesting work in the world. david: when you started out, were you often the only woman in the room at lockheed? marillyn: i was. david: was that intimidating or was it the kind of thing were you can show them i am better than them, the men? marillyn: it is like any team you come into. you have to establish your credibility, recognizing i am a different gender, so maybe the first moment i was different in that sense, but after that, once you are contributing and part of the team, it was no longer a factor, at least for me in my career. but i will tell you what is really positive is that today 22% of our leaders are women, 24%, 25% of the workforce is women, so the pipeline is there is no longer only one woman in the room. we have many women leaders in the room, and we have come a long way on the pipeline. in fact, 35 years ago, there

weren't as many women coming out of engineering and other into thens to come workforce, just as the case was for our customer. you look at our customer, military services, how many women are involved, how many women in uniform and in leadership positions, it is just a pipeline issue. we are always working on the pipeline to get more women. david: right. and what you do for relaxation? are you an exercise person, a traveler, sports? marillyn: i like to get out and play some golf. my husband and i like to get out and play some golf for relaxation. i like to travel. our family gets together and travels. i travel lots on the job. 40%, 50% of the time, business travel, but one of the things we enjoy is getting together as a family to travel. i always try to create some fun travel that our kids will find and as long as mom and dad pay for it, and it is fun, they will come. david: some say the higher the handicap of the ceo, the better the stock will perform. if it is a low handicap, it means the ceo is spending too

much time is playing golf. so -- marillyn: you are not going to ask me for my handicap, are you, david? david: you are not a scratch golfer? marillyn: no way. i don't play enough for that. [laughter] david: today -- it sounds like it must be pretty low. can you beat your husband or is he better than you? marillyn: he is better than me, but i always remind him there is the average for women and the average for men. david: ok, and if he has a close putt, you give it to him? [laughter] david: so today, what is the biggest challenge the u.s. defense industry has? marillyn: the challenge we have is really the challenge our customers have. we have an environment where the threats today are so difficult around the world, the global security environment is so unpredictable and is changing so rapidly, so you have a need for

solutions to address that and to stay ahead of the threat and the adversaries. at the same time, we have constrained bus it's -- budgets and the budget pressures we have faced the last several years, and maybe we are having to spend money near-term getting back up to readiness instead of investing what we need to to address the power competitions we have out there with our adversaries, so that then in turn is a challenge for industries, because if you have not been investing along the way, we have to move with speed while at the same time driving costs down. david: what about cyber warfare? that must be an important side of your business now. howdy you make sure -- how do you make sure that our enemies around the world are not trying to get your secrets? marillyn: they can't -- i mean, they are trying to get our secrets. this is a constant threat that a company like ours and many companies have in the u.s., other countries trying to get at our secrets. we take it very seriously because we know that we are a target and government customers are a target, so we have

invested a lot in the technology to protect that, but it is a constant. these threats are advanced and they are asymmetric and constantly changing. it is really important for us to stay on top of that and keep investing in it. david: i mentioned earlier since you became ceo, your stock is up. if i bought some stock tomorrow, what i also -- would i also see a significant gain in four years or five years? or you think the prices are already so high for the defense stocks? marillyn: david, i am not going to advise you on stock price today. [laughter] [applause] marillyn: i think you are really good at that. i would tell you this, for our company, we are always focused on creating shareholder value. just know that is our commitment and we are going to drive the company for growth and innovation and for shareholder value. david: as long as you are the ceo, i would be happy to be an investor. how long might you be the ceo? [laughter] david: do you have any plans? if the president of the united

states said, i would like you to be secretary of defense, would you entertain that, or would you stay where you are for a while? marillyn: in our company, i feel very privileged. i love the work that we do. i love the team of remarkable people that i work with. they have the highest integrity, they are so dedicated and so talented. i love working at lockheed martin. and i serve at the pleasure of the board of directors, so how long i work will be up to them. but today, i am really enjoying the work i am doing and have no intention of stepping down from my role. david: well, whenever you do step down at some point, 10 years, 15 years, 20 years, would you consider the higher calling of private equity? [laughter] [applause] marillyn: i have a passion for business. i might very well consider that, david. david: well, whenever you do step down, please let me know. i will be happy to talk to you. thank you very much. marillyn: thank you. [applause] ♪

david: coming up on "bloomberg best," the stories that shaped around the world. the week in business uncertainty remains a constant for investors and drama continues to escalate on trade, diplomacy, and politics. >> looks like the trade cease-fire is no more. >> we may yet see a freefall of oil production from australia. >> we seem to be in the midst of a currency crisis right now. >> president trump is trying to keep the door open. david: deutsche bank is ready to see its shareholders at its annual meeting.