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Northrop Grumman Corporation

Type	Public (NYSE: NOC)
Founded	1927 (in 1994, company took on current name)
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	$30.721B USD (2.91% FY '04 to '05)
Employees	125,400 (2004)
Website	www.northropgrumman.com

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^[1], the world's largest radar maker (with over 850 ground-based radar installations), and the number-one builder of naval vessels. As of 2004, it had 125,000+ employees working at hundreds of sites in the U.S. and abroad, and an annual revenue of US$30.7 billion. Northrop Grumman ranks #58 on the 2005 Fortune 500 list of U.S. industrial companies.^[2]

1 Sectors
2 Products
3 Services
4 History
5 Accolades
6 Controversy
- 6.1 Government influence
- 6.2 Scandals
7 Corporate governance
8 References
9 External links

[edit] Sectors

Northrop Grumman is composed of eight sectors, covering a large portion of the defense and high-tech sectors. Each of these sectors operates independently, though there is still a large amount of sharing of information, services, and resources within the sectors. Each sector's logo is the main Northrop Grumman logo, with the sector name below the curve.

[edit] Electronic Systems

Northrop Grumman Electronic Systems develops and manufactures the electronics for radars, computer controls, sensors, avionics, and positioning systems that go into Northrop Grumman's aircraft, missiles, ships, C4I (Command, Control, Communications, Computers and Intelligence), and land-based systems.

Electronic Systems evolved from Northrop Grumman's 1996 acquisition of Westinghouse's Electronic Systems division. California Microwave Systems (1999), Navia Aviation AS (2000), Aerojet General Corporation's Electronics and Information Systems Group (2001), Litton Systems (2001), and Fibersense Technology Corporation (2002) were added added to the sector, as time went on.^[3]

[edit] Integrated Systems

Northrop Grumman Integrated Systems produces aircraft, airframes, and missiles for the department of defense, including the B-2, F/A-18, E2-C, and the new Joint Strike Fighter. Probably the most recognizable of Integrated Systems's products, however, was the (now decommissioned) F-14 Tomcat, the backbone of the US Navy's airpower, and a symbol of the United State's military power, worldwide. Integrated Systems also maintains the Department of Defense's Cyber Warfare Integration System.

Northrop Grumman Integrated Systems can be seen as the core business that began when Grumman Aeronautical Corporation produced the XFF-1 for the US Navy in 1930. Though this was the first military aircraft to be produced by what is now Northrop Grumman, this actually predates the formation of the parent company, which produced its first aircraft when the first N-3PB patrol bomber rolled off Northrop Aircraft Incorporated's plant in Hawthorne, California, in 1940. Together, these two aerospace giants formed the core of what is now Northrop Grumman. In 1999, the sector added Teledyne Ryan Aeronautical (who produced the Spirit of St. Louis) to their resources.

[edit] Mission Systems

Northrop Grumman Mission Systems produces C4I systems and solutions for the Department of Defense, using products and services from other sectors and outside sources, meeting the DoD's ever-increasing need for information gathering and sharing.

Mission Systems is the Northrop Grumman re-branding of TRW systems, acquired in 2002. In 2003, XonTech and Illgen Simulation Technologies joined the sector.

[edit] Newport News Shipbuilding

Northrop Grumman Newport News is the only shipyard in the United States capable of building and refueling nuclear aircraft carriers (CVNs) and, along with General Dynamic's Electric Boat division, one of only two shipyards to build nuclear submarines(SSNs, SSBNs, and SSGNs). Though NGNN occasionally takes on some commercial work, their relationship with the government remains pretty much along monopoly - monopsony lines.

Northrop Grumman Newport News consists solely of what was Newport News Shipbuilding and Drydock Company, purchased in 2001 after fierce competition with General Electric. As such, it maintains only two sites. The main shipyard in Newport News, Virginia, founded in 1886 as the Chesapeake Dry Dock & Construction Company. The second site is Continental Maritime, a former subsidiary of Newport News shipyard, which provides services to west-coast based ships out of San Diego, California, but does not build ships. Aside from the two shipyards, NGNN has engineers and technical representatives at all shipyards that service their ships, such as the navy-run Norfolk Naval Shipyard, to assist with overhaul and repairs.

[edit] Information Technologies

Northrop Grumman Information Technologies provides information and information technology related services to clients, as well as providing internal information technology services for Northrop Grumman's sectors. Their services take the form of networking solutions and network security, imaging technology, information infrastructure, software, and information management for their other products.

The core of the Information Technology sector was formed by the 1997 purchase of Logicon Corporation, merging it with its own in-house information technologies services.^[4] Inter-National Research Institute (1998), Data Procurement Corporation (1999), Federal Data Corporation (2000), Sterling Software Incorporated (2000), Litton Systems (2001), TRW Incorporated (2002), Integic Corporation (2005) were eventually added to the sector.

[edit] Products

Some of the most expensive vehicles in the world, such as this B-2 Spirit strategic bomber, are made by Northrop Grumman and purchased by the United States government.

Much of the company's focus is on missiles and missile systems. The best known products of Northrop Grumman are the B-2 Spirit strategic bomber, the RQ-4 Global Hawk unmanned aerial vehicle and the F-14 Tomcat carrier-based strike fighter.

[edit] Naval products

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 assault ships and many other commercial and military craft, including icebreakers, tankers, and cargo ships. In a partnership with Science Applications International, Northrop Grumman provides naval engineering and architecture services as well as naval maintenance services

[edit] Aerospace products

A BQM-74 Chukar unmanned aerial drone launches from a U.S. Navy vessel

Separate sectors, such as Space Technology, produce aircraft for the U.S. and other nations. The B-2 Spirit strategic bomber, the E-8c surveillance aircraft, the RQ-4 Global Hawk, and the T-38 Talon supersonic trainer are used by the U.S. Air Force. The Navy uses Northrop Grumman-built vehicles such as the BQM-74 Chukar, C-2 Greyhound, E-2C Hawkeye, and the EA-6B Prowler. Many aircraft, such as the F-5 Tiger, T-38 Talon, E-2C Hawkeye, and the F/A-18 Hornet, are sold to other nations. Northrop Grumman Electronic Systems produces and maintains AWACS aerial surveillance systems for the U.S. and Great Britain. A UK-based subsidiary, Park Air Systems, makes navigation, traffic control, and communications equipment for aircraft in the UK.

The Space Technology sector builds NASA satellites, propulsion systems, and mission payloads, as well as various Strategic Defense Initiative ("Star Wars") defensive laser systems. Rocket launch systems are produced by the Information Technology sector.

[edit] Other products

Northrop Grumman Electronic Systems creates C4I radar systems for air defense, and Airspace Management radar systems air traffic control. Other radar are used in F-16 Fighting Falcons and other military aircraft, or in battlefield surveillance systems like ARL. Another UK subsidiary manufactures remote control vehicles for handling explosives or hazardous materials. Many other smaller products are made by Northrop Grumman, such as night-vision goggles and secure communications equipment.

[edit] 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 the largest supplier of IT services to the U.S. federal government, for instance. And Vinnell, a Northrop Grumman subsidiary, 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 the most of the state's IT operations.^[5] 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.^[6]

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.^[7]^[8]

[edit] History

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.

A merger between Northop Grumman and competitor Lockheed Martin was not approved by the U.S. government in 1997, slowing the consolidation of the defense industry. But in 1999, the company acquired Teledyne Ryan, which developed surveillance systems and unmanned aircraft. Then in 2001 it acquired Litton Industries, a shipbuilder and provider of defense electronics systems to the U.S. Navy. Later that year, Newport News Shipbuilding & Dry Dock Company (one of only two producers of nuclear submarines) was added to the company. And in 2002, Northop Grumman acquired TRW, a space systems and laser systems manufacturer. There have been many other smaller acquisitions throughout the same period.^[9]

Northrop Grumman and Boeing have also recently collaborated on a design concept for NASA's upcoming Crew Exploration Vehicle. Northrop Grumman announced formation of a new business unit (sector), effective January 1, 2006 called Technical Services.

[edit] Accolades

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."^[10] Northrop Grumman no longer appears on their list of America's 400 Best Big Companies, however.^[11] Northrop Grumman is credited with sponsoring educational programs^[12] and donating thousands of dollars to various charities.^[13]^[14] Many members of the U.S. government have attended company events and spoken highly of the company and its contributions.^[15]

[edit] Controversy

Northrop Grumman produces many products used in modern warfare.

[edit] Government influence

According to the company's 2005 filings, 90% of the company's income that year came from the United States government, "principally the Department of Defense".^[16] This, along with many millions spent on lobbying and campaign contributions, has led to perennial charges of improper lobbying and influence peddling. In 2002, the World Policy Institute noted "After a decade of consolidation, the merger [between Northrop Grumman and TRW] will leave the U.S. with three major defense contractors... The 1990s bout of government-backed 'merger mania' in the military industry accomplished one thing: it resulted in a... much more politically powerful corporate military sector."^[17] In a separate article, the institute revealed: "Together Northrop Grumman and TRW have spent over $20 million on lobbying members of Congress and given about $4 million in campaign contributions"^[18]

Many members of Congress and executive officials have pushed heavily for purchasing items like Stealth Bombers and a national SDI system, purchases that would signify a windfall for Northrop Grumman if approved. Senators Trent Lott, John Warner, and Ted Stevens each received over $10,000 from the company.^[19] Several former officials, consultants, or primary shareholders of Northrop Grumman have held high posts in the Bush administration, including Paul Wolfowitz, I. Lewis Libby, Richard B. Myers, Dov Zakheim, and Sean O'Keefe.^[19] One of the company's vice presidents, William O. Studeman, was the deputy director of the CIA in the 1990s.^[20] One of the company's largest subsidiaries, Vinnell Corporation, was previously owned by James A. Baker III and Frank Carlucci, former Secretaries of State under successive Republican administrations.^[21]. Many commentators point to Northrop Grumman as a primary example of a player in the military-industrial complex.^[22]^[23] By contracting military services to private contractors such as Northrop Grumman, the U.S. Government is seen as avoiding responsibility for its actions.^[7]

[edit] Scandals

In addition, Northrop Grumman has had to deal with several scandals throughout its history. Before the companies merged, in 1972 Northrop was shown to have bribed several Saudi Arabian officials to purchase F-5s.^[24] More recently, the company was sued in 1999 for knowingly giving the Navy defective aircraft. This suit seeks $210 million in damages and is ongoing.^[19] 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.^[21]^[25] Northrop Grumman also landed a $48 million contract to train the New Iraqi Army, a job that many have complained has been poorly managed.^[20]^[26]

[edit] Corporate governance

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.^[27] 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 Larson, Richard B. Myers, Philip Odeen, Aulana Peters, Kevin Sharer, John Brooks Slaughter.