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Aviation History
2002
2002 - 0615.PDF
FULL LIST OF READER SERVICES & ADVERTISER CONTACTS - 50 EDITORIAL +44 (20) 8652 3842 Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS, UK Fax +44 (20) 8652 3840 email flight.internationaliPrbi.co.uk Editor Murdo Morrison •44 (20) 8652 4395 murdo.morrison^rbi.co.uk Editor's PA Debra Warburton •44 (20) 8652 3835 debra.warburton@rbi.co.uk Deputy News Editor Emma Kelly •44 (20) 8652 3096 emma.kelly@rbi.co.uk Commercial Aviation Editor Max Kingsley-Jones +44 (20) 8652 3825 max.kingsley.jonesiPrbi.cO.uk Defence Aviation Editor Stewart Penney •44 (20) 8652 3834 stewart.penney@rbi.co.uk Operations/Safety Editor David Learmount •44 (20) 8652 3845 david.learmount@rbi.co.uk Business Editor Alexander Campbell •44 (20) 8652 3990 alexander.campbell@rbi.co.uk Business & General Aviation Editor Kate Sarsfield •44 (20) 8652 3885 (maternity leave) Business & General Aviation Reporter Justin Wastnage •44 (20) 8652 3863justin.wastnage@rbi.co.uk Spaceflight Correspondent Tim Furniss •44 (1237) 471960 tim@spaceport.co.uk EUROPE/MIDDLE EAST European Editor Christina Mackenzie •33 (1) 64 23 68 89 christina.mackenzie@rbi.co.uk Israel Correspondent Arie Egozi +972 (3) 9413132 Middle East Correspondent Gerald Butt +357 2 771967 gbutt@spidernet.com.cy AMERICAS Washington DC Office Fax +1 (703) 836 8344 Americas Editor Graham Warwick +1 (703) 836 3448 graham.warwick@rbi.co.uk East Coast Editor Paul Lewis +1 (703) 836 3084 jpaul.lewis@rbi.co.uk West Coast Editor Guy Norris •1 (949) 252 8971 Fax +1 (949) 252 8972 guy.norris@rbi.co.uk Brazil Correspondent Jackson Flores Jr +55 212439-6062 Fax 00 55 212349-6090 fubar@uol.com.br Canada Correspondent Brian Dunn •1 (514) 937-1855 Fax (514) 937-3352 brian@derniermot.com ASIA/PACIFIC Singapore Office Fax +65 338 6171 Regional Managing Editor Nicholas lonides +654343311 Fax+65 338 6171 nicholas.ionides@rbi.co.uk Deputy Asia Editor Andrew Doyle •65 434 3309 andrew.doyle@rbi.co.uk Regional Reporter David Fullbrook +65 434 3314 david.fullbrook@rbi.co.uk Australia Civil Aviation Correspondent Paul Phelan +61(7)40532791 Fax+61 (7)4053 3003 pdphelan@optusnet.com.au Australia Military Aviation Correspondent Peter La Franchi +61 (0) 419 246 620 Fax +61 (2) 62312795 nulka@ozemail.com.au EDITORIAL PRODUCTION Group Production Editor Graeme Osborn +44 (20) 8652 3828 Group Art Editor James Mason +44 (20) 8652 4994 Chief Sub-Editor Chris Thornton +44 (20) 8652 3850 Deputy Production Editor Jackie Thompson +44 (20) 8652 4997 Sub-Editor Elaine Hills +44 (20) 8652 3848 Photographer Mark Wagner +44 (20) 8944 5225 mark.wagner@aviation-images.com ADVERTISING SEE P50 FOR LISTING SUBSCRIPTIONS+44 (1444) 445454 rbi.subscriptions@rbi.co.uk THE FLIGHT COLLECTION kim.hearn@rbi.co.uk WWW.FLIGHTINTERNATIONAL.COM Air Transport Intelligence (All), Flight International's sister online service at www.rati.com, contains the full text ol Flight Internationaland Airline Business since 1996. Full text of the magazines can also be found online with lexis- Nexis. Dialogue, FT Profile, IAC and Reuters. Editor Rieran Daly +44 (20) 8652 3837 Reed Business Information COMMENT The third element Northrop Grumman's acquisition of TRW, if successful, would inject some dynamism into an increasingly polarised US defence market With the aerospace industry's attention focused on winning the hearts and minds of wary cus tomers at Asian Aerospace 2002, Northrop Grumman's bid to take over TRW may not have been the talk of the exhibit halls and hospitality chalets. But as executives return from Singa pore to catch up with the news, the implications of the move may take on new significance. As Flight International went to press it was not known whether TRW would accept or reject Northrop's offer. But one thing is certain - the aerospace and automotive company is now in play. If its proposal is rejected, Northrop could go hostile, taking the offer direct to TRW's shareholders. To defend itself, TRW could seek a white knight buyer for the whole company or separately for its aerospace and automotive businesses. While this latest chapter in the consolida tion of the US aerospace and defence industry would have seemed from Singapore Acquiring TRW would make Northrop Grumman the second- largest US defence contractor to be of relevance only to the North American market, the outcome of this particular board room battle could have profound implications well beyond the USA's borders. If the story began in 1994, when Northrop acquired Grumman, took control of Vought and began to expand beyond its core military aircraft business, then a turning point came in 1998 when the US government blocked a merger with Lockheed Martin. Two years later, Northrop Grumman sold its commercial aero- structures business to focus on defence electronics, information technology and, a dis tant third, military aircraft. Last year, the company acquired Litton Industries. The move strengthened Northrop Grumman's electronics and information sectors but brought with it a substantial shipbuilding business. Within months, what seemed like an orphan activity turned into a core capability when Northrop Grumman acquired nuclear warship builder Newport News. Within a year, the company doubled its revenues and today is almost three times the size it was in 1993, when it was plain old Northrop. TRW has an equally illustrious history, but a less than spectacular financial performance in recent years. Other than its $8 billion acquisi tion of US/UK automotive firm LucasVarity in 1996, which brought with it Lucas Aerospace, the company has not participated in the con solidation binge. The LucasVarity deal doubled the size of TRW's automotive busi ness but left the company burdened with debt. Analysts attribute Northrop Grumman's growth to the bold and deft leadership of chairman and chief executive Kent Kresa, and the TRW move bears his hallmark. But an equally important player is the company's new president, Ron Sugar, who was Litton's presi dent at the time of its acquisition and, before that, led the very TRW businesses that Northrop Grumman now wants. If anyone understands the value of TRW's aerospace activities, it should be Sugar Kresa is clear about the benefits the acqui sition would bring. Northrop Grumman is already a prime contractor in military aircraft, including unmanned systems, and warships, including aircraft carriers. Acquiring TRW would make it a prime contractor in satellites and space systems. It would also give North rop Grumman a key role in the USA's multi- billion-dollar missile defence programme, something the company sorely lacks. More importantly, securing TRW would make Northrop Grumman the second largest US defence contractor, just ahead of Boeing and not far behind Lockheed Martin. And the upper ranks of the industry would look very different. Instead of just two system integra tion titans, Boeing and Lockheed Martin, supported by rival defence electronics giants, Northrop Grumman and Raytheon, the US industry would be led by three multi-platform system integrators with annual sales in the $25-27 billion range. This could chahge the complexion of future transatlantic, and even global, industrial co-operation and consolida tion. The US defence aerospace market is becoming increasingly polarised between the rival camps of Boeing and Lockheed Martin. With three major primes, the market would become more dynamic, creating opportunities. At Singapore. Airbus may have mocked Boeing's diversification away from commercial aircraft, but majority owner EADS surely understands the value of having a prime con tractor capability in multiple platforms: just as industry executives returning from Asian Aerospace 2002 will understand the signifi cance of Northrop Grumman's move on TRW. SEE HEADLINES P5 www.flightinternational.com FLIGHT INTERNATIONAL 5-11 MARCH 2002 3
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