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Northrop Merger Creates a Big Local Employer

Northrop Merger Creates a Big Local Employer

BY BRAD GRAVES

Staff Writer

Defense contractor Northrop Grumman Corp. took on the employees, debts and businesses of TRW Inc. this month, and in doing so took on the title of San Diego’s 16th largest employer.

With the acquisition of TRW, Los Angeles-based Northrop Grumman’s San Diego County head count increased by 960 to roughly 3,200 people.

That puts it behind Children’s Hospital and Health Center and ahead of National Steel and Shipbuilding Co.

Northrop completed its acquisition of Cleveland-based TRW on Dec. 11. Northrop paid $7 billion and agreed to take on $4 billion of TRW’s debt.

Company spokespeople said they expected no layoffs locally. One spokesman said the company is in a growth mode.

One of the newly acquired TRW businesses, Radio Systems, has 120 positions open, said spokeswoman Sudi Bruni. The company is looking for software and systems engineers at all levels.

Radio Systems makes software-defined radio for the F-35 Joint Strike Fighter and other military aircraft. It also does some commercial work with Nokia. Radio Systems has 840 San Diego employees and took on 219 employees in 2002.

It’s not the only local Northrop Grumman unit that promises growth.

The Ryan Aeronautical Center, which has been in the Northrop fold since 1999, added 250 people and leased 40,000 more square feet of building space in 2002. Executives there expect to hire 200 engineers and support people in 2003, said spokeswoman Cynthia Curiel.

Ryan designs and builds unoccupied spy aircraft such as the Global Hawk jet plane and the Fire Scout helicopter.

Northrop’s newest local addition, on top of TRW Radio Systems, is TRW’s Mission Systems Sector, which has 120 employees in Rancho Bernardo and Mission Valley.

Already established are Northrop Grumman’s shipyard, Continental Maritime in San Diego, which has about 700 employees, and its Communications and Information Systems Division, which has 370 employees. The balance of the 3,200 employees works at customers’ job sites.

Northrop Grumman had 2001 sales of $13.56 billion. TRW had 2001 sales of $16.38 billion. Part of TRW’s sales were in its auto parts business, which is being sold to another company.

The combined Northrop Grumman now bills itself as a $25 billion enterprise. That makes it the second-largest U.S. defense contractor.

Last week, employees of the merged companies were already talking about combining assets and capabilities. There are “synergies” to working in a bigger company, Bruni said.

Over on the Northrop Grumman side, Curiel said she hoped her Ryan unit could get some relief from crowding by using some of TRW’s building space.

David Vandervoet, general manager of Radio Systems on the TRW side, said his company has had plenty of wins on new airframes like the F-35. Therefore growth will come through modernizing the equipment in older platforms. These might include the A-10 Thunderbolt II, the E-2C Hawkeye, the F-16 Fighting Falcon and the F/A-18 Hornet.

In a speech in Redondo Beach last week, company Chairman and CEO Kent Kresa said Northrop Grumman expects revenue of $25 billion to $26 billion in 2003 and growth to follow , with revenue in excess of $30 billion by 2005.

With the merger, Northrop Grumman has nearly 120,000 employees. Its Southern California head count stands at roughly 24,000.

Northrop Grumman trades on the New York Stock Exchange as NOC. Its shares closed Dec. 18 at $94.36.

Radio Systems, the TRW addition with the most employees, was part of the TRW Space & Electronics business unit. The unit has been renamed the Northrop Grumman Space Technology sector and will soon get new leadership.

Timothy Hannemann, 59, will retire as president of the sector on Jan. 31. Wesley Bush, 41, will become sector president the following day. Bush spent 15 years at TRW Space & Electronics, and led TRW’s Aeronautical Systems unit before its sale to Goodrich Corp.

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