Northrop Grumman creates two new sectors out of TRW, names leaders
- By Patience Wait
- Dec 13, 2002
The purchase of TRW Inc. by Northrop Grumman Corp. is a "capstone acquisition" and most likely signals an end to the company's aggressive purchasing streak, said Kent Kresa, chairman and chief executive officer of Northrop Grumman.
Kresa announced the end of Northrop Grumman's buying days at a Dec. 13 press conference held at the former TRW Systems offices in Reston, Va.
"Northrop Grumman has become a company of immigrants," Kresa said, with employees from acquired companies "far outnumbering the legacy employees."
Over the past three years, Northrop Grumman has acquired Litton Industries Inc., Federal Data Corp. and the federal business units of Comptek Research Inc. and Sterling Software, in addition to TRW.
An estimated 90 percent of Northrop's business is now in the defense sector, Kresa said. One way to tell the importance of that business: The company now has 30,000 employees in Virginia, compared to 27,000 in California.
The sale of TRW's automotive parts business is expected to be completed in the first quarter of 2003. Northrop Grumman intends to use the proceeds to pay down some of its debt, lowering the debt-to-capital ratio to about 25 percent, he said.
That ratio will give the company "the best balance sheet structure it's had in a very long time," Kresa said.
Kresa also announced the formation of two new business sectors out of TRW and the appointment of presidents to lead them.
Donald Winter was made a corporate vice president and president of the Northrop Grumman Mission Systems sector, formerly TRW Systems. Winter was president and CEO of the TRW unit, which employs about 16,000 people and is expected to have $3.9 billion in 2003 revenue. The headquarters will remain in Reston, Va.
Timothy Hannemann, president of the Northrop Grumman Space Technology sector, formerly TRW Space and Electronics, is retiring at the end of January. His replacement will be Wesley Bush, who will become a corporate vice president and president of the space technology unit. Bush was president and CEO of TRW Aeronautical Systems prior to its October sale to Goodrich Corp.
Northrop Grumman Space Technology employs some 8,600 people and is projecting 2003 revenue of $2.5 billion. The sector is headquartered in Redondo Beach, Calif.
Kresa said that with the addition of TRW, Northrop Grumman expects corporate revenue of $25 billion to $26 billion in 2003, and with double-digit growth forecasted for the company, by 2005 he expects revenue "in excess of $30 billion."