Northrop Grumman CEO Sees Opportunities for Growth

Northrop Grumman’s more than 1,100 employees in St. Johns County have their work cut out for them as the company is poised for growth. Speaking at the Bernstein 39^th annual Strategic Decisions Conference, chair and CEO Kathy Warden said things are looking up for the aerospace and defense technology company.

“As we look at the business, we continue to see an opportunity to grow the business at a healthy clip,” she said in the streamed conference. “We had a strong first quarter (with) 6% growth year over year.”

Warden said the recent debt ceiling negotiations and its impact on defense spending are not expected to impact the company and she was “pleased to see how Northrop Grumman programs fared in the president’s budget submission.”

Warden also addressed some of the challenges the company faces, including supply chain problems and workforce issues.

“Labor certainly has been a positive turnaround story from where we were a year ago,” she said. “Our attrition is back to pre-pandemic levels.”

She said on the supply chain front things are also looking better.

“We’ve seen progress on inflation and supply chain,” Warden said. “Supply chain challenges are still there, but we are seeing gradual improvement.”

Warden said there is a lag in how supply chain issues impact productivity, which can lead to delays in programs and systems, but overall things are changing for the better.

“I do see that dissipating and gradually improving,” she said. “We expect it to continue to resolve itself through the remainder of the year. I think we’ve hit the low point and now we are on a positive flow line.”

Warden also addressed the impact of inflation on the company and said efforts are underway to ease the pressure of rising prices.

“We are working every lever we have to minimize the impact we saw when we took a forward look,” she said. “We are still working all of those dimensions of cost” including “things that are in our control, learning curves, productivity, labor rates and our supplier costs.”

One area where the company anticipates continued growth is in space systems.

“I see our space portfolio faring well in the budget,” Warden said. “It’s really a broad-based growth story in our space portfolio. We’ve already seen our space business nearly double the last three years.”

Warden summarized the company’s outlook for the future as positive.

“There is a real optimism of how our portfolio supports the U.S. defense strategy,” she said. “I am bullish on our company’s growth.”