The seeds of the merger that spawned the world's largest defense contractor were planted in the late 1980s, when Norm Augustine -- then CEO of Martin Marietta Corp. -- realized that deep defense-spending cuts were on the horizon.

"While Reagan was still in office, I began to see the handwriting on the wall, for a whole variety of reasons," Augustine recalls. 

Every Friday afternoon, Augustine and his executive team would meet in his basement rec room to discuss how Martin Marietta could survive the impending downturn. They devised a three-part plan that called for the company to diversify, build up its financial coffers and grow through acquisitions.

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"It was a simple strategy: Join with other companies that, like us, had half-full factories, get rid of half the factories and operate the rest of them full," Augustine explains. 

Augustine's strategy played out in a series of epic deals, beginning with Martin Marietta's $3 billion acquisition of General Electric Co.'s aerospace business in 1992 and $1.9 billion acquisition of Grumman Corp. in 1994. 

The game changer came in 1995, when Augustine engineered "a true merger of equals," between Martin Marietta and Lockheed Corp., creating the world's biggest defense contractor -- Lockheed Martin Corp. (IW 500/30). The company reported $46.5 billion of net revenue in 2011.

Since retiring in 1997, Augustine has been devoting much of his time to another mission that's been on his radar since his days as an aerospace executive: the deterioration of American innovation and competitiveness. 

His efforts have focused on raising awareness of the critical role that the STEM disciplines -- science, technology, engineering and mathematics -- play in getting the United States back on track in a hypercompetitive global economy.   

"We aren't going to have a Sputnik moment, a Pearl Harbor, a World Trade Center," he told aerospace and aviation executives at a summit in October. "This is a slowly impacting disease that we have -- more like a frog being boiled."

For a full list of the Manufacturing Hall of Fame inductees, click here.