Northrop Grumman Corporation is an American global
aerospace and
defense technology company formed by
Northrop's 1994 purchase of
Grumman. The company was the fourth-largest
defense contractor in the world as of 2010.
[4] Northrop Grumman employs over 68,000 people worldwide.
[5] It reported revenues of $25.218 billion in 2012.
[6] Northrop Grumman ranks No. 72 on the 2011
Fortune 500 list of America's largest corporations
[7] and ranks in the top ten military-friendly employers.
[8] It is headquartered in
West Falls Church, Virginia.
Business sectors
Northrop Grumman is made up of four business sectors: Aerospace Systems, Electronic Systems, Information Systems and Technical Services.
[9]
Aerospace Systems
Northrop Grumman manufactured the
B-2 Spirit strategic bomber.
Aerospace Systems, headquartered in
Redondo Beach, California produce aircraft, spacecraft, high-energy laser systems and microelectronics for the US and other nations. This includes surveillance and reconnaissance, protected communications, intelligence, battle management, strike operations, electronic warfare, and missile defense to Earth observation, space science and space exploration.
[10] 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
US Air Force. The US Army uses Northrop Grumman's
RQ-5 Hunter unmanned air vehicle, which have been in operational use for more than 10
[timeframe?] years. The U.S. Navy uses Northrop Grumman-built aerial vehicles such as the
BQM-74 Chukar, RQ-4 Global Hawk based BAMS UAS,
Grumman C-2 Greyhound,
Grumman E-2 Hawkeye, and the
EA-6B Prowler. Northrop Grumman provides major components and assemblies for different aircraft such as
F/A-18 Hornet,
F/A-18E/F Super Hornet and the
EA-18G Growler.
[citation needed]
As of 2006, Northrop Grumman intended 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."
[11] It continues to build the
RQ-4 Global Hawk, with many of the same long endurance and sensor technologies that are required for bombers.
[citation needed]
Northrop Grumman partnered with
EADS from the mid-2000s to offer the KC-30 Multi Role Tanker Transport aircraft
[12] in the U.S. Air Force's
KC-X tanker competition.
[13] In February 2008 the U.S. Air Force chose KC-30,
[14] but in September 2008 the Defense Department stopped the tanker program and in March 2010, Northrop Grumman announced it was withdrawing from the competition.
[15]
In November 2010, NASA selected Northrop Grumman for consideration of potential contract awards for
heavy lift launch vehicle system concepts, and propulsion technologies.
[16]
From 2013, Northrop Grumman participates in the DARPA Tactically Exploited Reconnaissance Node(
TERN) program, and received $2.9 million for Phase 1
[17] and $19 million for Phase 2.
[18][19] The TERN program attempts to launch and recover a
UAV from mid-size ships to provide long distance intelligence gathering.
[20]
Electronic Systems
Northrop Grumman Electronic Systems, headquartered in
Linthicum, Maryland creates military radar, sensors and related products, including
C4I radar systems for
air defense, Airspace Management radar systems such as
AMASS, and battlefield surveillance systems like the Airborne Reconnaissance Low (ARL). Tactical aircraft sensors include the
AN/APG-68 radar, the
AN/APG-80 advanced agile beam fire control radar Advanced Electronically Scanned Array (
AESA), and the
scalable agile beam radar (SABR) AESA upgrade for the
F-16 Fighting Falcon, the
AN/APG-77 AESA radar for the
F-22 Raptor, and the
AN/APG-81 AESA radar for the
F-35 Lightning II, and the
AN/AAQ-37 electro-optical Distributed Aperture System (DAS) for the F-35, and the APQ-164 Passive Electronically Scanned Array (PESA) radar for the
B-1 Lancer.
[citation needed] Electronic Systems produces and maintains the
AWACS aerial surveillance systems for the U.S., the
United Kingdom, NATO, Japan, and others. Northrop Grumman is the prime contractor for the development and integration of the Air Force's $2-billion
Multi-Platform Radar Technology Insertion Program. Many other smaller products are made by Northrop Grumman, such as
night vision goggles and secure communications equipment.
[citation needed]
Information Systems
Information Systems, headquartered in
McLean, Virginia, supports the U.S. ballistic missile program, integrates various command, control and intelligence systems and provides technical and management services to governmental and military customers, all with an emphasis on
cyber security.
Technical Services
The Techical Services sector headquartered in
Herndon, Virginia, works on logistics solutions "from modernization and sustainment, to supply chain management, training and simulation, and automated test equipment".
[21] Vinnell, a Technical Services Northrop Grumman subsidiary, provides training and communications for the military. In 2003, it landed a $48 million contract to train the
Iraqi Army.
[22] In 2005 the company won a $2 billion contract with
Virginia to overhaul most of the state's IT operations.
[23] Later that year, The
United Kingdom paid $1.2 billion in a contract with the company to provide maintenance of the country's defensive radar.
[24]
Northrop Grumman performs various 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.
[25][26]
Affiliated companies and partners
Remotec, a subsidiary, is the foremost manufacturer of
remote control vehicles for explosive ordnance disposal and hazardous material handling. A UK-based subsidiary, Park Air Systems, provides VHF and UHF ground-to-air communications systems for the civil and defense markets. Northrop Grumman has also worked closely with Antenna Associates, Inc., a leading manufacturer of
Identification friend or foe (IFF)/
Secondary Surveillance Radar (SSR) antennas located in Massachusetts.
[citation needed]
In August 2007, Northrop Grumman acquired
Scaled Composites in which it had previously owned a 40% stake.
In 2008, Northrop Grumman began working with DHS Systems LLC, manufacturer of the Deployable Rapid Assembly Shelter (DRASH) in New York, as part of the U.S. Army's Standard Integrated Command Post System program.
[27]
History
Originally formed in California in 1939 by
Jack Northrop, the
Northrop Corporation was reincorporated in Delaware in 1985.
[28]
1990s
In 1994, Northrop Aircraft merged with
Grumman Aerospace, famous for building the
Apollo Lunar Module to create Northrop Grumman (NG).
[citation needed] In 1996, the new company acquired
Westinghouse Electronic Systems, a major manufacturer of radar systems,
[citation needed] and Xetron Corporation. In 1997, the defense computer contractor Logicon was added, which had acquired Geodynamics Corporation in March 1996 and Syscon Corporation in February 1995.
[citation needed]
In 1998, a merger between Northrop Grumman and competitor
Lockheed Martin was not approved by the U.S. government,
[citation needed] slowing the consolidation of the defense industry.
[dubious – discuss] The same year it acquired Inter-National Research Institute Inc. In 1999, the company acquired
Teledyne Ryan, developer of surveillance systems and unmanned aircraft, California Microwave, Inc., and the Data Procurement Corporation. On March 19, 1999, Northrop Grumman announced to restate its fourth-quarter results downward to a net loss because of problems related to its dealings with start-up satellite launch company Kistler Aerospace Corp.
[30][vague] In 1999, Northrop Grumman and
SAIC created
AMSEC LLC as a joint venture, which grew "from $100 million in revenue in 2000 to approximately $500 million in fiscal year 2007."
[31]
2000s
In 2000, NG acquired Federal Data Corporation, Navia Aviation As, Comptek Research, Inc.,and Sterling Software, Inc.
[citation needed]
In 2001, the company acquired
Litton Industries, a shipbuilder and defense electronics systems provider for the
U.S. Navy. During the acquisition process, a new Delaware holding company,
NNG, Inc., was formed, which 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 was added.
On November 1, 2001, Northrop Grumman restated its third-quarter profit after stopping work on two ships for American Classic Voyages, which filed for bankruptcy protection.
[32]
In 2002, Northrop Grumman acquired
TRW Inc., which had acquired
Braddock Dunn & McDonald (BDM) in 1997, and became the Space Technology sector based in Redondo Beach, CA, and the Mission Systems sector based in Reston, VA, with sole interest in their space systems and laser systems manufacturing. The Aeronautical division was sold to
Goodrich, and the automotive divisions were spun off and retained the TRW name.
There have been 15 acquisitions from 1994-2003
[which?]period.
[33]
On January 1, 2006, Northrop Grumman opened its business sector called 'Technical Services'.
[citation needed] Northrop Grumman and
Boeing collaborated on a design concept for
NASA's upcoming
Orion spacecraft (previously the Crew Exploration Vehicle), but the contract went to rival
Lockheed Martin on August 31, 2006.
[citation needed]
On July 20, 2007, Northrop Grumman became the sole owner of
Burt Rutan's Scaled Composites.
[34]
In 2007, Northrop Grumman created 'National Workforce Centers' as an alternative to
Offshoring.
[35] Locations are Auburn, Alabama; Corsicana, Texas; Fairmont, West Virginia; Helena, Montana; Johnstown, Pennsylvania; and Lebanon, Virginia. The Rapid City, South Dakota location closed in January 2012.
[36]
In July 2008, three of four Northrop Grumman employees (
Thomas Howes,
Marc Gonsalves and
Keith Stansell) were freed during
Operation Jaque after five years of captivity following their aircraft crash in the Colombian jungle. The fourth employee Tom Janis had been killed by the
FARC shortly after the crash in 2003.
[37]
Rendering of the $8.7B James Webb Space Telescope
In January 2008, Northrop Grumman combined its Newport News and Ship Systems sectors into a new business unit named Northrop Grumman Shipbuilding.
[38] On March 31, 2011, this was spun off as
Huntington Ingalls Industries Inc (
NYSE:
HII).
[39]
2010 to present
In July 2013, Northrop Grumman won a training-simulation contract potentially worth $490 million to support the
U.S. Air Force's next-generation
aerial warfare virtual-training network.
[40]
As of 2014 Northrop Grumman is the primary contractor for the
James Webb Space Telescope.
[41]
Corporate governance
From 1990-2003, before the merger with Grumman in 1994,
Kent Kresa was the
CEO of the company, who led the serial-acquisition strategy with a total of 15 additional acquisitions from 1994-2003, including Litton, Logicon, Westinghouse's defense electronics business, Ryan Aeronautical and Newport News Shipbuilding, and TRW. He retired in 2003 at age 65.
In 2003
Ronald Sugar, the former
chief operating officer, took over as CEO.
[42] Sugar also served
[when?] as the company
chairman of the board.
[citation needed]
In January 2010,
Wes Bush succeeded as CEO and became company president.
[43]
Corporate headquarters
Since 2011, Northrop Grumman's headquarters are in
West Falls Church, Virginia (previously Jefferson),
unincorporated Fairfax County, Virginia.
[44][45][46]
Until 2010 headquartered in
Century City, Los Angeles, California,
[47][48] it announced plans on January 4, 2010 to move to the
Washington Metropolitan Area by 2011,
[49] to be closer to government customers.
[50] CEO Wesley Bush stated that the company needed to be located close to
Capitol Hill lawmakers and officials from intelligence and military communities.
[51] Northrop Grumman considered sites in
Washington, DC and in suburbs in
Maryland and
Virginia.
[50] The
Los Angeles Business Journal wrote "In a way, the announcement was not a surprise" due to the trend of aerospace companies moving to the DC area, the fact that the new CEO is from West Virginia and that CEOs often move corporate headquarters to places that they want the headquarters located. A Los Angeles area economic development consultant described the move announcement as a "structural failure at all levels for Los Angeles County."
[51]
District of Columbia economic development officials were "pitching the city's urban hipness and proximity to Capitol Hill power brokers" to Northrop Grumman.Maryland promoted its highly educated workforce and its large number of federal facilities, while Virginia marketed itself as a state with relatively low taxes.
[52]
In July 2010, the company announced its purchase of an existing building in Fairfax County and its move in the summer of 2011. It planned to consolidate its Century City headquarters and its existing
Arlington County, Virginia offices into the new headquarters. It employed about 40,000 in the Washington DC metropolitan area, including DC and surrounding Maryland and Virginia.
[44]
Accolades and criticism
Northrop Grumman was named
Forbes's Company of the Year in 2002.
[42] Forbes's announcement credited the company with "master[ing] the art of innovation."
[53] Since then, it no longer appears on their list of America's 400 Best Big Companies.
[54]
Since 2005 Northrop Grumman credits itself with sponsoring educational programs
[55] and donating thousands of dollars to various charities.
[56][57]
Many members of the U.S. government have attended company events and spoken highly of the company and its contributions, for example
John McCain.
[58] In December 2007, Northrop Grumman Corporation was awarded the prestigious
Ron Brown Award for Corporate Leadership, the only Presidential award recognizing companies for outstanding achievement in employee and community relations.
[59]
Environmental record
In 2000, Northrop Grumman was designated a Primary Responsible Party under federal Superfund laws at 13 hazardous waste sites and under state Superfund laws at eight sites.
[30] The corporation has also been linked to 52
superfund toxic waste sites.
[60] Based on 2008 data, Northrop Grumman was the 62nd-largest corporate producer of
air pollution in the
United States, per the
Political Economy Research Institute of the
University of Massachusetts Amherst. Northrop Grumman facilities released more than 23,798 pounds of toxic chemicals into the air in that year.
[61]
In 2002, the Bethpage Community Park in
Bethpage, New York, owned by the company until the 1960s, was closed due to soil contamination with
polychlorinated biphenyls (PCBs).
[62] The company dumped cadmium, arsenic, chromium-tainted sludge, solvents, paints and PCBs at the site between 1949 to 1962.
[62] Additionally, two toxic chemical plumes centered under Bethpage Community Park and other surrounding land formerly owned by Grumman or Northrop Grumman have spread to under neighboring houses.
[62] In November 2013, the Bethpage Water District filed a multimillion dollar lawsuit against Northrop Grumman in Federal Court for the Eastern District of New York for contaminating the groundwater in Bethpage.
[63]
In 2003, the company was among 84 parties with which the
United States Environmental Protection Agency, the
U.S. Department of Justice, and the state of
New York reached an estimated US$15 million settlement for the rehabilitation of the Mattiace Petrochemical Company Superfund site in
Glen Cove,
Long Island.
[64] In the same year, Northrop Grumman agreed to pay $33,214 after EPA inspectors found
hazardous waste violations at the Capistrano test site.
[65]
As a response to many of the previous claims, the company has stood up as an organization for social responsibility.
[citation needed] In 2008, Northrop Grumman launched its Environmental Sustainability program and an EHS Leadership Council, to advance its commitment to environmental performance both internally and externally . The Greenhouse Gas Inventory Project was launched to accurately quantify company-wide greenhouse gas emissions and to reduce the carbon footprint of Northrop Grumman operations, in anticipation of upcoming regulations.
[66]
In October 2010 the company was named one of Computerworld's Top 12 Green-IT Organizations for its large-scale data center migration effort.
[67]
Political contributions and governmental ties
From 1990-2002, Northrop Grumman contributed $8.5 million to federal campaigns.
[68] According to
PAC summary data compiled by
Source Watch, the company gave US$1,011,260 to federal candidates in 2005-2006 election cycle, compared to $10,612,837 given by all defense contractors in the same cycle.
[69] This donation amount was only behind that of General Dynamics and Lockheed Martin in the defense industry. The majority of the contributions, 63%, went to Republicans.
[70]
Former Northrop Grumman Electronics Systems chief
James G. Roche served as Secretary of the Air Force for two years under George W. Bush. Roche would eventually be nominated to head the Army, but would be forced to withdraw his nomination among accusations of mismanaging a contract with
Boeing and of failing to properly handle the Air Force sexual assault scandals of 2003.
[71] According to
CorpWatch, "at least seven former officials, consultants, or shareholders of Northrop Grumman" have held posts "in the Bush administration...including Deputy Secretary of Defense
Paul Wolfowitz, Vice-Presidential Chief of Staff I.
Lewis Libby, Pentagon Comptroller
Dov S. Zakheim, and
Sean O’Keefe, director of NASA." Wolfowitz and Libby have both since left the government amid scandals.
[72]
Controversies
In the late 1980s and early 1990s Northrop was the target of several high-profile criminal and civil cases.
[73]
In 1995, Robert Ferro, an employee for TRW Inc., a Northrop Grumman subsidiary, discovered that satellite components manufactured for the U.S. Air Force (USAF) were faulty and likely to fail in operation. TRW suppressed Ferro's report of the problem and hid the information from the USAF, even after a satellite in space equipped with the faulty components experienced serious anomalies. Ferro later sued Northrop Grumman in federal court under the federal
whistle-blower law.
In 1999 , the company was sued for knowingly giving the Navy defective aircraft. This suit sought $210 million in damages and was ongoing as of 2004.
[74] Ten years later, on April 2, 2009, Northrop Grumman agreed to pay $325 million to settle the suit.
[75] Ferro was awarded $48.8 million of the settlement. Northrop Grumman stated about the settlement that, "it believed that TRW had 'acted properly under its contracts' and that the company had substantive defenses against the claims."
[76] In 2001, federal investigators probed NG for fraud of more than $100 million,systematic overcharging for radar jammers and other high-tech devices used in the B-1 bomber, the F-15 fighter and the B-2 Stealth bomber.
[77] In 2003, the company was sued for overcharging the U.S. government for space projects in the 1990s.
[78] Northrop Grumman paid $111.2 million to settle out of court.
[79]
From August 25 through September 2, 2010, Virginia's computer system operated by NG under a $2.4 billion contract went into a week-long computer outage resulting in as many as 45,000 citizens not being able to renew their drivers licenses prior to their expiration. Computer systems for 26 of the state's 89 agencies were affected and Governor
Bob McDonnell announced that some data may be permanently lost.
[80][81] In 2010 Northrop Grumman apologized for the outage and said to fund an investigation.
[82] Northrop Grumman had contributed approximately $75,000 to Bob McDonnell's election campaign.
[83]
International Traffic in Arms Regulations (ITAR) Violations
U.S. State Department investigators found that
Litton Industries, a subsidiary acquired by Northrop Grumman in 2000, had provided portions of
source code used by guidance and navigation system interfaces aboard
Air Force One to a company in Russia in 1998. Northrop Grumman agreed to pay a $15 million fine for 110 violations, occurring between September 1998 and November 1998, of the
Arms Export Control Act and the
International Traffic in Arms Regulations (ITAR).
[84]
Additionally, documents filed by the State Department state that between 1994 and 2003, Northrop Grumman failed to notify the U.S. State Department about the computer guidance systems also being transferred to
Angola,
Indonesia,
Israel,
China,
Ukraine and
Yemen.
[85]