Northrop CEO Says Export Controls Should Be Eased

The government needs to launch new programs and ease export controls to ensure defense contractors remain capable and viable, said Wes Bush, chief executive and president of Northrop Grumman, in a speech to the region’s technology community last week.

Bush — known as a young executive rapidly remaking one of the largest of the country’s military contracting businesses — acknowledged the federal government’s budget difficulties, but he said policymakers must find a way to preserve incentives to innovate. “Speaking as an engineer, for many of the critical skills there is no substitute for actually building something,” Bush said. “If we don’t have new projects, those skill areas will atrophy.”

He called on the government to decide on core capabilities that need to be preserved and to invest in “reasonably advanced” technology that can be deployed quickly if the need arises. Bush also pushed for the government to ease export controls that he said unfairly shackle defense contractors. “No one is talking about simply opening the cupboards,” he said. “But with regard to export capabilities, we have for years made perfect the enemy of good enough.” Bush’s comments — at a breakfast hosted by the Northern Virginia Technology Council — marked one of his first major addresses in the region since the company decided to move its headquarters from Los Angeles to Falls Church.

Northrop is preparing to move later this year; Bush said the company’s nameplate recently went up on its new building. Northrop’s decision to relocate comes as the company is busy repositioning itself for a time when spending is likely to slow. In recent months,

Bush has pushed to consolidate Northrop’s shipbuilding yards and the company is considering whether to spin off its shipbuilding business. Bush applauded remarks earlier in the week by Pentagon acquisition chief Ashton Carter, who used his own address at a Wall Street forum to elaborate on the government’s industrial policy.

Carter said the Defense Department welcomes merger and acquisition activity as long as it does not occur among the top half-dozen prime contractors. Bush said he and other industry officials need that kind of information. “I think I can speak for the industry when I say how much we welcome that type of clarity,” he said. “A clear framework from the DOD on such an important topic really enables companies to better chart their strategies.”

Marjorie Censer Capital Business