By Calvin Biesecker
In a surprise announcement yesterday, Northrop Grumman [NOC] Chairman and CEO Ron Sugar said that he will retire at the end of this year and the company said that Wes Bush, who is currently its president and chief operating officer, has been elected CEO, effective Jan. 1, 2010.
Lewis Coleman, currently Northrop Grumman’s lead independent director, was elected by the company’s board of directors as non-executive chairman effective at the start of 2010.
Sugar, 61, who is retiring nearly four years shy of the company’s mandatory retirement age of 65 for elected officers, took over the reins of the company in April 2003 just months after Northrop Grumman acquired the space and information systems businesses from TRW. Prior to that, Sugar had been president and COO at Northrop Grumman and was being groomed to take over leadership of the company. Sugar has spent 29 years working for Northrop Grumman and the companies it acquired, including a stint as president and COO of Litton Corp.
Bush, 48, has held a number of key executive positions prior to and during his time with Northrop Grumman.
He joined Northrop Grumman as part of the TRW acquisition in late 2002, where he ran the company’s Aeronautical Systems Sector, which was sold to Goodrich prior to the merger with Northrop Grumman. At Northrop Grumman, Bush headed the Space Technology sector, formerly part of TRW, before becoming the company’s chief financial officer (CFO) in 2005. In 2006 he was named president as well, a position that had been vacant since 2003.
More recently Bush became president and COO, a key signal that he was the company’s man to eventually become CEO.
“I have worked closely with Wes Bush for many years,” Sugar said in a statement yesterday. “Wes is an outstanding executive who is ready to provide a new generation of leadership for Northrop Grumman.
In both the CFO and COO roles, Bush has been one of Northrop Grumman’s key executives in responding to several crises in the past few years, notably having to do with the company’s Gulf Coast shipyards. First it was Hurricane Katrina, which severely disrupted the workforce in Mississippi, and then it was shipbuilding problems with the Navy’s LHD-8 amphibious assault ship (Defense Daily, April 16, 2008). The shipbuilding woes have continued to linger (Defense Daily, July 24, 2009).
The TRW acquisition was a sort of capstone achievement of Sugar’s predecessor, Kent Kresa, who enlarged Northrop Grumman dramatically through the late 1990s and early this decade through a series of acquisitions. Under Sugar the company has slowed the pace of its acquisitions and has focused mainly on niche buys.
Also under Sugar, Northrop Grumman’s fortunes, at least in terms of stock price, did well his first four-and-a-half years, nearly doubling to a high of around $83 per share in November 2007. Since then, however, the company’s stock price has retreated to below $50 per share. Since becoming CEO, Sugar has helped grow the company from around $26 billion in sales to nearly $35 billion.