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Friday, Apr 12, 2024

Kratos to Help Build ICBM Replacement

Northrop Grumman Corp.’s new contract to build a replacement for the Minuteman III nuclear-tipped missile system includes work for San Diego-based Kratos Defense.

The U.S. Air Force awarded Northrop Grumman a $13.3 billion initial contract for the intercontinental ballistic missile system on Sept. 8. The deal covers engineering and manufacturing development, and follow-on contracts are expected. Published reports put the total cost of the program at $85 billion.

As part of the Northrop Grumman project team, Kratos (Nasdaq: KTOS) will build specialized vehicles for the missiles. It is unclear how much revenue the San Diego-based corporation will get from the project. Kratos had $718 million in revenue last year.

Prime contractor Northrop Grumman said it planned to do work on the project in approximately 10 major sites including San Diego, but didn’t elaborate on what work will be performed locally. A Northrop spokesman declined comment.

Looking to 2029

The Air Force calls its new missile project the Ground Based Strategic Deterrent, or GBSD. It anticipates putting the missiles into service beginning in 2029.

In a statement, Kratos characterized its products for GBSD as specialized ground support systems, including highly complex missile transporters and payload transporters. It will also provide engineering services. Kratos will build the components at its C5ISR Division in York, Pennsylvania, about 100 miles west of Philadelphia. C5ISR stands for Command, Control, Communications, Computing, Combat, Intelligence, Surveillance and Reconnaissance.

This is a huge strategic win,” said Tom Mills, president of Kratos’ C5ISR division, predicting the company will be able to build future business on the win. 


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