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A Merger With Positive Spin for San Diego

A Merger With Positive Spin for San Diego

Timing, they say, is everything.

After a year’s worth of corporate scandals, battles over water and energy and statewide budget cuts unlike any this state has ever seen, San Diego County could use a little good news.

Northrop Grumman recently completed its $7 billion acquisition of TRW, and while neither defense contractor is based here, both firms have a large presence in San Diego. The merger is expected to double Northrop’s sales to $30 billion by 2005, and the windfall appears to directly benefit San Diego.

Los Angeles-based Northrop already owns one ship-repair company here, and its Ryan Aeronautical engineering group in Rancho Bernardo developed the unmanned Global Hawk spy plane. The addition of Ohio-based TRW opens new avenues to enhance communications systems in the E-2 Hawkeyes and the F/A-18 jet fighter, both of which are Northrop aircraft and are crucial assets in the Navy’s airborne arsenal.

TRW’s Radio Systems staff falls under the umbrella of the Northrop Grumman Space Technology sector. Several other TRW units , one of which works closely with the Navy’s Space and Naval Warfare Systems Center in Point Loma , brings Northrop’s head count to some 3,200 employees locally. That bumps out Nassco, making Northrop the county’s 16th largest employer.

As with most mergers, that employment figure is likely to change. But unlike most consolidations where jobs are liquidated almost immediately because of duplication, corporate restructuring will be kept to a minimum. In fact, Northrop officials claim the merger means growth for San Diego’s economy.

If their predictions come true, Los Angeles-based Northrop plans to add hundreds of new jobs that could propel it to the No. 15 spot among local employers by this time next year. Those jobs will come with hefty paychecks, as many of the new hires will be engineers specializing in software and systems development.

At a time when all but the sky appears to be falling in San Diego, it’s reassuring to see the nation’s third-largest defense contractor make such a strong, long-term commitment to beef up its business locally. Maybe it’s just the kind of jump-start this community needs to shake off a year’s worth of economic cynicism.

, Rick Bell

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