Northrop Grumman CEO Ronald Sugar set to retire

Northrop Grumman has just announced that Chairman and Chief Executive Ronald Sugar, who’s been in his current role since 2003, will retire June 2010. Sugar will be replaced by Wesley Bush, 48, who joined the company in 1987 and currently serves as president and chief operating officer.

Sugar is 61 years old, still below Northrop’s mandatory retirement age of 65. But Sugar tells the Los Angeles Times that the move was voluntary and that he had been thinking about it for a while.

Challenges ahead for defense giant

Credit: PIERRE VERDY/AFP/Getty Images

Change in Northrop’s executive leadership comes at a challenging time for the  defense industry as a whole. “What we’re seeing is an industry rearranging itself for the difficult times ahead,” says Loren Thompson, a defense industry analyst with the Lexington Institute, in an interview with the Washington Post. Thompson noted reorganizations at other major contractors: Boeing, BAE Systems, and General Dynamics. The shift, adds Thompson, comes after a decade of growth in defense that’s now giving way to the Obama administration’s growing focus on domestic goals.

What’s next? Cybersecurity, of course.

During Sugar’s tenure, Northrop Grumman saw its annual sales grow from $26 billion to nearly $35 billion, making it the nation’s second largest defense company by revenue. It also employs about 40,000 people in the Washington, DC area.

So, what’s next for the Pentagon’s no. 2 defense contractor?

While Northrop Grumman expects to grow all its businesses, it will place special emphasis on cybersecurity, as well as intelligence and unmanned aerial vehicle production. “It has become clear that the nation has a number of potential vulnerabilities when it comes to the cyber threat,” says incoming chief executive Bush to the Washington Post. “Cyber knows no geographic borders.” (For Sugar’s own take on cybersecurity, check out our recent piece here.)

What do you think of changes underway in the defense industry? Share your comments here.

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