Northrop CEO says COVID-19 has made company 'more focused on cost reduction this year'

By Marjorie Censer / May 28, 2020 at 10:15 AM

The chief executive of Northrop Grumman said yesterday the ongoing coronavirus outbreak has increased the company's attention to cost savings, particularly in the areas of facilities and travel.

Speaking at a virtual conference hosted by Bernstein, Kathy Warden said the contractor expects some lasting changes as a result of the COVID-19 crisis.

"We now envision not needing as much facility capacity, given the changes that we're making," she said. The company doesn't "expect to be traveling at the pace that we were anytime soon."

"These are natural changes that will result from COVID-19," she added.

Meanwhile, Warden also said she expects Northrop's international sales to increase, but to remain roughly the same share of total sales as certain domestic programs also grow.

International sales today make up about 15% of total sales, she said.

Warden said Northrop expects to see growth in programs like the B-21 and Ground Based Strategic Deterrent, but those do not have export opportunities.

As a result, international sales "as a percent will be kept in check -- even if we are growing it," she said.

Warden also said she expects growth in space.

"We're seeing a recapitalization of almost every mission area in space as these assets need to be more survivable and more capable," she said.