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Northrop zeroes in on San Diego

Northrop Grumman Corp.’s already-large unmanned aircraft business in San Diego is about to get even bigger.

Two of the Falls Church, Va.-based defense giant's programs will move to its Rancho Bernardo facility: the MQ-4C Triton program from Bethpage, N.Y., and the NATO Airborne Ground Surveillance program from Melbourne, Fla.

The changes are part of Northrop's (NYSE: NOC) plan announced on Monday to reduce costs, heighten innovation and make drones more affordable.

The contractor designated five centers of design and integration excellence in support of its Aerospace Systems sector's manned aircraft, unmanned systems and electronic attack businesses.

Its Unmanned Systems Center of Excellence will be located at its Rancho Bernardo facility, and the four others will sit in California, New York and Florida.

“As an industry leader in design and development we think [San Diego] is a perfect location to put a center of excellence," said Randy Belote, a spokesperson for Northrop, on Monday.

Northrop accounted for 61.6 percent of San Diego’s total prime unmanned aerial vehicle (UAV) contracts from 2008 through 2011.

Northrop Grumman's high-altitude Global Hawk UAV, which was born in San Diego, is used for intelligence, surveillance and reconnaissance in the Middle East and Afghanistan.

The Global Hawk. Photo courtesy of Northrop Grumman

It’s unclear how many employees will be added to the San Diego site as a result of being named an unmanned hub.

“Today we made the announcement that these centers have been identified and work begins today to stand them up,” Belote said.

Northrop will complete an assessment on what positions are required in each center and whether internal jobs can be transferred between locations. If not, new job searches could be conducted.

“We are calculating it will be a year and a half before we’ve got those sites populated and the like. It’s too early to make predictions on numbers of employees or positions there,” Belote said.

Northrop and General Atomics Aeronautical Systems quietly build the bulk of the nation's drone fleet in North County.

“We are confident in the area. This will be a good engine for economic growth," Belote said.

Pilot-free planes already make up the largest segment of San Diego’s defense manufacturing sector, and with Monday's announcement, the sector will likely expand there even more.

UAV production neared $1.3 billion in San Diego during 2011, according to an analysis of Department of Defense contract spending compiled in a study by The National University System Institute for Policy Research.

"Unmanned systems are important to national security," he said.

By restructuring its unmanned operations, Northrop's goal is to increase its competitive edge.

"It allows us to take advantage of the current footprint we have and evolve that, if you will," he said.

The global demand for UAVs could reach $12 billion by 2019, even in the face of sharp cuts in U.S. military spending.

Northrop's real estate at each named center is also under assessment, in terms of whether new space, buildings or different build-outs will be needed.

Northrop's design and development functions occur in 800,000 square feet of leased office space in North County.

“We look to ensure we’ve got the right capability at the right time and place and at the right size. We think San Diego is the right place for this," he said.

The other four designated centers will sit in Bethpage, Melbourne, Palmdale, Calif., and St. Augustine, Fla.

"Consolidating these centers of excellence will improve our strategic alignment with our customers' need for increasingly innovative and affordable products, services and solutions," said Wes Bush, chairman, chief executive officer and president of Northrop Grumman, in a statement.

The Manned Aircraft Design Center of Excellence in Melbourne will include aircraft design work currently being performed at the company's Bethpage facility.

An Electronic Attack Center of Excellence in Bethpage will include the Aerospace Systems' Electronic Attack program team.

Palmdale and St. Augustine will each house an Aircraft Integration Center of Excellence.

Current integration activities in Moss Point, Miss., and New Town, N.D., are not included in the transition.

The B-2, F/A-18 and F-35 programs will remain in Palmdale, El Segundo and Redondo Beach, Calif., respectively.

As part of its plan to cut costs and consolidate facilities, Northrop will close an Information Systems sector facility in Dominguez Hills, Calif.

“Given the current budget environment, it is imperative that we act to enhance future performance, innovation and affordability for our customers," said Bush.

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Northrop Grumman Corp.

Company Website

16765q W. Bernardo Dr.
San Diego, CA 92127

Northrop Grumman Corp. Executive(s):

Wes Bush

  • Chairman, Chief Executive Officer, President

Robert 'Brick' Nelson

  • General Manager

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