The champagne flowed at Lockheed Martin last Friday when they won the $200 billion Joint Strike Fighter project, which could keep the cash flowing until 2040.

They’ve certainly won well over rival Boeing, but there’s one problem: Based on the average life cycle of major U.S. corporations, there is no more than a 50-50 chance that the company will still be in existence by 2040.

A recent McKinsey study concluded that the average life of major U.S. corporations was 40 years. To check the accuracy of this, I dug up a modest collector’s item, “Fortune” magazine for June 1962, which contains the “Fortune 500” for 1961. By looking at, say, the top 50 such companies and seeing what can happen to them, one can get a reading on Lockheed’s chances of being around to collect the final check from the government.

The year 1962 was a very different age from today, as one can tell from Fortune’s ads. All the well-dressed men patronizing major commercial banks, or buying expensive cars, are wearing trilby hats. The 55-year-old “Businessmen in the News” look as if they’ve never seen a treadmill in their lives. A news article profiles the great new corporate success story, Xerox, whose 914 copier is available only on lease, and whose stock is selling for the unheard of price of 53 times earnings. (Xerox’s sales and profits forecasts for the next five years would, however, prove laughably conservative, so the multiple was fully justified.)

Beginning at the top, the first five companies on the list are General Motors, Standard Oil (New Jersey) — now Exxon, Ford, General Electric and Socony-Mobil Oil. Even at this exalted level, where one would expect stability to be greatest, there has been one casualty — Socony Mobil is now part of ExxonMobil. Score four survivors out of five among the top five.

The next five are U.S. Steel, Texaco, Gulf Oil, Western Electric and Swift. Here there has been more mayhem. U.S. Steel is now USX-Marathon Group and has just agreed to split into steel and energy entities, reversing a 1982 merger. Texaco was bought by Chevron in 2000, and Gulf is long gone (taken over in 1984 by Chevron), Western Electric disappeared in 1984 as part of the breakup of AT&T and Swift was taken over by Beatrice Foods in the mid-1980s and subjected to a prolonged and painful leveraged buyout by Kohlberg, Kravis and Roberts, and bought by ConAgra in 1987. Score one out of five only among those ranked fifth to tenth.

The next five, Du Pont, Chrysler, General Dynamics, Standard Oil of California and Bethlehem Steel also had mixed fortunes. DuPont, SoCal (now Chevron) and General Dynamics are still flourishing. Chrysler was bailed out by the U.S. government in 1979 and sold to DaimlerChrysler in 1998. Bethlehem Steel filed for Chapter 11 on Oct. 15 this year. Score three survivors out of five; you could count Chrysler as a half, I suppose, but in a free market it would have disappeared in 1979.

Boeing, one of the two finalists for the JSF contract, is one of the next five, which also include Standard Oil of Indiana, Westinghouse Electric, Shell Oil, and National Dairy Products. Here Boeing and Shell are still in business, as is Westinghouse, but entirely in financial services, not electrical equipment. Standard Oil of Indiana (later Amoco) was bought by BP in 1998. National Dairy Products, a New York-based company with 48,000 employees, appears to have disappeared altogether. Score three out of five, though you wouldn’t have wanted to be a career employee at Westinghouse, other than in the company secretary’s office.

The next five include IBM, Proctor and Gamble, and Union Carbide, still going strong, the latter after a scare in the mid-1980s following the Bhopal disaster, but also Armour, now owned by ConAgra, and International Harvester (Chapter 11 in 1982). Score three out of five.

Lockheed, the winner of the JSF competition, is in the next five; it shouldn’t really count as a survivor because it was bailed out by the U.S. government in 1971. Others are survivors Goodyear and GTE, and losers Radio Corporation of America (bought by GE in 1986) and North American Aviation (merged with Rockwell in 1967, which was bought by Boeing in 1996) Score again three out of five.

The next five are mostly losers. Phillips Petroleum paid greenmail to Boone Pickens in 1985, but is still in business. Martin Marietta was bought by Lockheed in 1982. Sinclair Oil is still in business; it is a private company and much smaller than in 1962. Firestone Tire was bought by the Japanese Bridgestone in 1988, and Sperry Rand merged with Burroughs in 1986 to form Unisys; it is no longer a leading manufacturer of computers, as it was in 1962. Score two out of five.

The next five includes three survivors, in General Foods, United Aircraft (now United Technologies) and International Paper. Of the other two, Continental Can was sold to Suiza Foods, a private company based in Dallas in 1998, while American Can turned into a conglomerate called Primerica, bought the investment bank Smith Barney, was bought by Sandy Weill, and is now part of Citigroup. Score three out of five.

The next five are again mostly losers. Eastman Kodak survives (just), Borden was acquired by Kohlberg, Kravis and Roberts in 1995, and broken up, Cities Service was sold to Gulf Oil in 1982, Republic was merged into LTV in 1984, and has been reorganized several times since then — the successor company is currently once again in Chapter 11. U.S. Rubber is also a survivor; it changed its name to Uniroyal in 1967. Score two out of five.

The last five of the top 50 include three survivors: Monsanto, Burlington Industries and Armco Steel, and two losers, International Telephone and Telegraph (broken up in the 1990s, with the central part being bought by Hilton in 1997) and American Motors (bought by Chrysler in 1987, and closed down.) Score three out of five.

I’ll stop at No. 50, because as the companies get smaller they become increasingly difficult to trace — it is clear, however that their survival rate as independent entities tends to decrease, not increase as you go further down the Fortune 500.

For the top 50, there are thus 27 survivors over the 40-year period, or just over half. McKinsey’s thesis, that the average life of a Fortune 500 company is about 40 years, is thus verified.

This has important implications for the economy, and for career choices. For the economy, it is clear that the private sector is unlikely to enter into any projects where the expected payoff, however, large, is more than a decade or so into the future; the company itself, let alone current management, are unlikely to be around to see the project come to fruition. Indeed, in the 1980s and 1990s the pace of corporate change has tended to increase, with the trend towards leveraged buyouts in the 1980s and stock-option fueled takeovers in the 1990s.

A further acceleration in the pace of corporate decay would be very clearly bad for the U.S. economy. A slowing in the pace of corporate change, toward the more stable levels prevalent in Europe and to a large extent Asia, appears both likely and desirable. A lengthy recession, accompanied by a period of quiescence in the stock market, and thus by a decline in takeover activity, is in any case likely in the next decade.

What this study makes clear is that, in order to ensure that long-term investments are carried out, such a period of quiescence is highly desirable.

On a personal basis, it is also very clear that there is no point expecting lifetime employment from a major U.S. corporation, given that the average person’s working life exceeds the 40-year average life of the corporation. Instead, as has increasingly been the case over the last few decades, employees should expect to move from employer to employer over the course of their working lives, upgrading their skills sets where necessary and never indulging in the luxury of corporate “loyalty” that is only too likely to end in redundancy and the unemployment line.

In U.S. corporate life, it has been truly said: “If you want a friend, get a dog.”

-0-

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)

This article originally appeared on United Press International.