Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor in the world, and the number-one builder of naval vessels. As of February 2007, Northrop Grumman employs almost 200,000 people wordwide. The presence of their much-valued sub-contractors and global vendors account for an additional 10-15% of an already formidable workforce. Its 2005 annual revenue is reported at US$30.7 billion. Northrop Grumman ranks #67 on the 2006 Fortune 500 list of U.S. industrial companies.
Products and services
|Northrop Grumman Corporation.|
|Type||Public (NYSE: NOC)|
|Founded||1927 (in 1994, company took on current name), Denver, Colorado|
|Headquarters||Los Angeles, California|
|Key people||Ronald Sugar, Chairman and CEO|
|industry||aerospace and defense|
|Products||aircraft carriers, military aircraft, satellites, missile defense systems, advanced electronic sensors and systems, Information Technology and systems|
|Revenue||$30.15 Billion USD (2006)|
|net income||$1.59 Billion USD (2006)|
Northrop Grumman: Naval.
Northrop Grumman's many products are made by separate business units. Newport News Shipbuilding manufactures all U.S. aircraft carriers, and is the only company capable of building Nimitz-class supercarriers. It also produces a large percentage of U.S. nuclear submarines. A separate sector, Northrop Grumman Ship Systems, produces amphibious assault ships and many other commercial and military craft, including icebreakers, tankers, and cargo ships. In a partnership with Science Applications International Corporation, Northrop Grumman provides naval engineering and architecture services as well as naval maintenance services
Northrop Grumman Aerospace.
Separate sectors, such as Integrated Systems, produce aircraft for the U.S. and other nations. The B-2 Spirit strategic bomber, the E-8C Joint STARS surveillance aircraft, the RQ-4 Global Hawk, and the T-38 Talon supersonic trainer, are used by the U.S. Air Force. The US Navy uses Northrop Grumman-built aerial vehicles such as the BQM-74 Chukar, C-2 Greyhound, E-2 Hawkeye, and the EA-6B Prowler. Northrop Grumman provides major components for aircraft such as F/A-18 Hornet. Many aircraft, such as the F-5, T-38 Talon, and E-2 Hawkeye are used by other nations.
The Space Technology sector builds a variety of military and NASA satellites and mission payloads, as well as various Strategic Defense Initiative ("Star Wars") defensive laser systems. Working with Boeing, the sector provides the chemical laser for the Boeing YAL-1 Airborne Laser system.
Mission Systems sector is engaged in supporting the U.S. ballistic missile program; integrating various command, control and intelligence systems; and providing technical and management services to governmental and military customers.
Northrop Grumman intends to bid for the U.S. Air Force's next-generation strategic bomber project. Though it has not built a large manned aircraft since wrapping up B-2 Spirit production in the 1990s, the company has "been working hard to turn that perception around, with the skills and capabilities that back it up."
Northrop Grumman is partnering with EADS in offering the KC-30 for the U.S. Air Force's KC-X tanker competetion. Should Northrop Grumman/EADS win the contract, it would be required to invest approximately US$600 million in a new assembly plant in the United States, which is currently planned for Mobile, Alabama.
Northrop Grumman Radar and sensors.
Northrop Grumman Electronic Systems creates C4I radar systems for air defense, and Airspace Management radar systems air traffic control. Other sensors produced by this unit are used on F-16 Fighting Falcons, F-22 Raptor, F-35 Lightning II, B-1 Lancer and other military aircraft, or in battlefield surveillance systems like the Airborne Reconnaissance Low (ARL). Remotec, a subsidiary, is the foremost manufacturer of remote control vehicles for explosive ordnance disposal and hazardous material handling. Many other smaller products are made by Northrop Grumman, such as night-vision goggles and secure communications equipment. They also have worked closely with Antenna Associates, Inc., a leading manufacturer of IFF(Identification Friend or Foe)/SSR(Secondary Surveillance Radar) Antennas located in Massachusetts. Electronic Systems also produces and maintains the AWACS aerial surveillance systems for the U.S., the United Kingdom, and other customers. A UK-based subsidiary, Park Air Systems, makes navigation, traffic control, and communications equipment for international customers.
Northrop Grumman is the prime contractor for the development and integration of the Air Force's $2-billion Multi-Platform Radar Technology Insertion Program.
Northrop Grumman Other services.
In addition to providing the products created by Northrop Grumman, the company also provides many military and non-military services, usually to governments. It is among the largest suppliers of IT services to the U.S. federal government, for instance. And Vinnell, a Northrop Grumman subsidiary within the Technical Services sector, provides training and communications services for the military.
Many smaller nations and individual states in the U.S. have contracted Northrop Grumman for various large-scale projects. In 2005, for instance, the company won a $2 billion contract with Virginia to overhaul most of the state's IT operations. And later that year, Great Britain paid for a $1.2 billion contract with the company to provide maintenance of many aspects of the country's defensive radar.
Northop Grumman also performs various foreign functions in the War on Drugs. The company sends planes to spray herbicides on suspected cocaine fields in Colombia and opium poppy fields in Afghanistan.
History of Northrop Grumman.
Originally formed in California in 1939, Northrop Corporation was reincorporated in Delaware in 1985. In 1994, Northrop Aircraft merged with Grumman Aerospace to create the company Northrop Grumman. Both companies were previously established in the airplane manufacturing industry, and Grumman was famous for building the Apollo Lunar Module. The new company acquired Westinghouse Electronic Systems in 1996, a major manufacturer of radar systems. Logicon, a defense computer contractor, was added in 1997. Previously, Logicon had acquired Geodynamics Corporation in March 1996 and Syscon Corporation in February 1995.
A merger between Northrop Grumman and competitor Lockheed Martin was not approved by the U.S. government in 1998, slowing the consolidation of the defense industry. But in 1999, the company acquired Teledyne Ryan, which developed surveillance systems and unmanned aircraft. It also acquired the California Microwave, Inc., and Data Procurement Corporation, in the same year. Other entities acquired included Inter-National Research Institute Inc. (1998), Federal Data Corporation (2000), Navia Aviation As (2000), Comptek Research, Inc. (2000), and Sterling Software, Inc. (2000).
In 2001 the company acquired Litton Industries, a shipbuilder and provider of defense electronics systems to the U.S. Navy. During the acquisition process, a new Delaware holding company, NNG, Inc., was formed. It merged with Northrop Grumman through a one-for-one common shares exchange in April 2001. Both Northrop Grumman and Litton became subsidiaries of the new holding company. The original Northrop Grumman Corporation then changed its name to Northrop Grumman Systems Corporation; the holding company, NNG, Inc., changed its name to Northrop Grumman Corporation.
Later that year, Newport News Shipbuilding (one of only two producers of nuclear submarines) was added to the company. And in 2002, Northrop Grumman acquired the maximum amount possible of TRW without placing JCP out of majority ownership, with their sole interest in their space systems and laser systems manufacturing. The Aeronautical devision was sold onto Goodrich and the automotive section being spun-off and remaining as TRW. There have been many other smaller acquisitions throughout the same period.
Northrop Grumman and Boeing have also recently collaborated on a design concept for NASA's upcoming Orion spacecraft (previously the Crew Exploration Vehicle), but that contract went to rival Lockheed Martin on August 31, 2006. Northrop Grumman announced formation of a new business unit (sector), effective January 1, 2006 called Technical Services.
Accolades for Northrop Grumman.
Northrop Grumman was named Forbes's Company of the Year in 2002. Forbes's announcement credited the company with "master[ing] the art of innovation." Northrop Grumman no longer appears on their list of America's 400 Best Big Companies, however. Northrop Grumman is credited with sponsoring educational programs and donating thousands of dollars to various charities. Many members of the U.S. government have attended company events and spoken highly of the company and its contributions
Scandals at Northrop Grumman.
Northrop Grumman has had to deal with multiple scandals during its history. The company was sued in 1999 for knowingly giving the Navy defective aircraft. This suit seeks $210 million in damages and is ongoing. Then in 2003, the company was sued for allegedly overcharging the U.S. government for space projects in the 1990s. Northrop Grumman paid $111.2 million to settle that suit out of court. Northrop Grumman also landed a $48 million contract to train the Iraqi Army, a job that many have complained has been poorly managed
Kent Kresa was the CEO of the company until he was required to retire in 2003 due to age restrictions. At this point, Ronald Sugar, formerly the chief operating officer, took over as CEO. He also serves as the company chairman.
Besides Sugar, current members of the board of directors of Northrop Grumman are: John Chain, Lewis Coleman, Vic Fazio, Stephen Frank, Phillip Frost, Charles R. Larson, Richard B. Myers, Philip Odeen, Aulana Peters, Kevin Sharer, John Brooks Slaughter.
Business units (sectors)
The company is split into several business units, each of which operates fairly independently. These business units have generally been created through acquisitions.