Dr. Ronald D. Sugar was named president and chief operating officer (COO) of Northrop Grumman Corporation in September 2001. He also is a member of the Northrop Grumman board of directors. Since graduating summa cum laude in electrical engineering from the University of California at Los Angeles (UCLA), Sugar has held a number of technical, management, and senior-leadership positions in several of the largest U.S. defense, scientific, and electronics corporations. Sugar previously served as president and COO of Litton Industries, a diversified defense and technology company. Prior to joining Litton, he was president and COO of TRW Aerospace and Information Systems. Sugar holds master's and doctoral degrees in electrical engineering from UCLA, and was appointed by the president to serve on the National Security Telecommunications Advisory Committee. Sea Power interviewed him at Northrop Grumman headquarters in Los Angeles.

Senior Editor Gordon I. Peterson interviewed Dr. Sugar for this issue of Sea Power.

Sea Power: Thank you very much for sharing your time with Sea Power, Dr. Sugar. Could you begin by telling our readers something about Northrop Grumman's work with the sea services today and your responsibilities as its president and chief operating officer?

SUGAR: The Northrop Grumman Corporation is an $18-billion enterprise employing approximately 100,000 people. We are engaged in all sorts of advanced technology in support of defense programs--it is our principal focus. Approximately 35,000 of our people are engaged in shipbuilding, and we have several thousand more engaged in Navy and Marine Corps aviation. We do approximately $4 billion worth of shipbuilding annually, designing and manufacturing virtually every class of naval vessel--surface and subsurface, nuclear and nonnuclear. The United States Navy is our largest customer among all branches of the armed forces, accounting for 40 percent of our revenue, and we believe we are the Navy's largest contractor overall.

For a company that once prided itself nearly exclusively for its B-2 stealth bombers and fighter planes, it's quite a transformation to become the largest shipbuilder in the world.

My job as president and chief operating officer is to focus on executing our programs and completing the integration of the businesses we have acquired. Acquisitions during the past year included Litton Industries, Newport News Shipbuilding, and Aerojet Electronics. We have more than doubled the scale of the company from a financial standpoint, and we have grown from approximately 40,000 people to 100,000 people in terms of manpower. There's a lot going on!

How do you handle the significant span-of-control issues associated with such a large company?

SUGAR: We have been successfully managing the company through six business sectors, each of which is led by a president empowered to manage his business. We also encourage collaboration so that best-business practices are shared across the company. We have fairly stringent financial and contractual oversight-and-review processes in place to minimize the risk and exposure that each of the sectors might take on with contractual bids. The three things we focus on are people, technology, and integrity. Those are three values that are found in every sector.

Is there an advantage in designing and manufacturing a diverse line of products cutting across numerous platforms at a time when the Navy's network-centric doctrine will enable all units in a battle force to share information and data in real time?

SUGAR: There is, and there will be even more to come. About a decade ago Kent Kresa [Northrop Grumman's chairman and chief executive officer] and the company's strategic-leadership team developed a vision of the nation's future warfighting requirements. The vision was that systems were going to be incredibly more integrated and networked. C4ISR [command, control, communications, computers, intelligence, surveillance, and reconnaissance]--which we called by other names in those days--was going to become more important.

Rather than having individual platforms operating independently, the "system-of-systems" approach--that is demonstrated so vividly in Afghani-stan--was going to become more important. Better intelligence, surveillance, and reconnaissance; long-range precision strike; and cyber warfare were going to become the future of the defense market. That outlook was pretty visionary.

The company positioned itself so that internal investment and external acquisitions were built upon our fundamental view of how the world was going to evolve and a vision of what the company ought to be. Every acquisition the company has made has been along our centerline strategy. If an acquisition fits into our vision and strategy at an affordable price, we'll do it. If it does not, we won't. What has come together is a magnificent company.

Eight years ago this company's work was probably 80 percent aircraft manufacturing. If you take a look at the company today, aircraft constitute roughly 15 percent of the company's work. Those airplanes are interesting, because some people would call them "super ISR platforms"--JSTARS [Joint Surveillance Target Attack Radar System], E-2C Hawkeye, Global Hawk, and the EA-6B Prowler, for example.

And possibly the F/A-18G "Growler" as a replacement for the EA-6B?

SUGAR: Yes, if that is how the analysis of alternatives turns out. Absolutely. The Super Hornet would be a great host for the follow-on aircraft for the important work of the EA-6B. Today, you can't go to war without this capability.

You often talk about your work force. What are the qualities that you look for in a prospective employee--in the executive suite or on the plant floor?

SUGAR: We are looking for initiative, intellect, and, of course, integrity at all levels. We want people who are excited about their work and want to take the initiative to do it right. We are looking for intellect--a person whose mind is engaged, whether it is a scientist dreaming up a new invention in the laboratory, or an hourly worker trying to improve a process that he or she is responsible for on the assembly line. Integrity underlies all we do, because we must ensure that the products we deliver are good products--people's lives depend upon that and, ultimately, the fighting effectiveness of our forces and the nation.

During my visit to your F/A-18 fabrication facility at El Segundo [Calif.] I saw how you save time for your workers by bringing the precise number of proper tools to their work station. Fumbling in bins for the right fastener also seems to be a thing of the past.

SUGAR: That's right. Fumbling in a bin for five or 10 minutes is wasted time. One of the things we do at El Segundo is to track the trajectory or path of a worker in the factory. A lot of walking around is wasteful effort. If you can simplify a procedure or task by reducing the number of visits to a tool crib you will improve efficiency.

When these "scientific-management" and time-motion principles were introduced into naval shipyards and Army munitions plants at the beginning of the last century, there were labor strikes. It appears you have found a way to enable the worker to be more efficient and empowered at the same time.

SUGAR: Yes, we have a terrific work force. Every worker comes to work with a brain, but if you don't engage that brain, you are not getting what you are paying for. One of the things that workers can do at all levels, right up to the executive level, is to think about how to improve what we do. If we are challenged with that as a mindset, and we recognize that we are continuously trying to improve performance and processes along a journey that is not going to end, it's more fun to come to work.

What you saw at El Segundo is a national resource: the work force, more than just the property, plant, and equipment. Our job as Northrop Grumman executives is to be stewards of that resource--to nourish it, train it, develop it, to invest capital adequately where needed to make improvements in processes. That is how we build good products.

The Hornet's performance 24/7 during combat operations in Afghanistan bears incredible testimony to the quality of the product--and the young men and women flying and maintaining it. Do you receive feedback from corporate technical representatives serving at sea with the fleet?

SUGAR: Yes, information with Boeing on the F/A-18 is well-shared. It is a team environment, and we have good visibility. We also have significant feedback on how our other assets are performing--our B-2 bombers, destroyers, aircraft carriers, and Global Hawks [unmanned aerial vehicles]. Our people are viewed as part of the military's team and, in fact, often volunteer to go with some of our systems as they deploy. That is something that gives our people enormous pride and motivation. Our systems are making a difference where it matters most, and the work force knows that--and that gives us all a buzz. Our work is a lot more than punching a time clock and taking home a paycheck.

Are the traditional barriers between product lines becoming a thing of the past?

SUGAR: Absolutely. It is really interesting. Some people asked, "What in the world does Northrop Grumman want with ship systems with the acquisition of Litton?" Now we see the tremendous importance of ships as a C4I node in the cybersphere. "And what about aircraft carriers? Why would Northrop Grumman want to design and build aircraft carriers?" Think about it for a moment--this company makes or supplies subsystems for nearly every aircraft on the deck of that aircraft carrier. Look at the future aircraft carrier and you will see that its information technology will make it a very complex C4ISR node--here, again, a key element in our system-of-systems approach.

The other thing that this company has always believed in is the importance of long-range precision strikes. The B-2 bomber is a long-range precision-strike platform. Throughout our lifetimes, the aircraft carrier is going to continue to be a precision-strike instrument carrying very important assets. Taking a look at the future, unmanned combat aerial vehicles [UCAVs] may one day operate off the decks of carriers. We are working on that at El Segundo. Our Newport News organization is also working on how you accommodate UCAVs on aircraft carriers. We're also asking the question, "What is their potential utility for surveillance, reconnaissance, or strike missions?" It all plays together, because the big-deck carrier is going to be around for a long time.

We are seeing the excitement of having our folks at Newport News visit our folks in Baltimore in the electronics business, and having our aircraft people teaching "lean processes" in our yards in Avondale, Louisiana, and Pascagoula, Mississippi. This is very exciting--one plus one sometimes equals three!

Could you elaborate on some of the more recent warfare trends associated with combat operations in Afghanis-tan?

SUGAR: We will see more systems. We will see the power of the combination of platforms and jointness [i.e., the forces and platforms of more than one branch of the armed forces] being brought to bear in military operations. There will be a more pervasive influence of information to enhance the effectiveness of platforms and weapons systems. We also will see increased speed in putting more precise weapons on target--shortening the sensor-to-shooter time line. How can you sense, decide, and shoot quickly and effectively--and then provide the feedback so that you can determine if you need to shoot again?

When you consider the outlook of an all-out war with a determined adversary, your knowledge and denial of his knowledge--or the planting of incorrect knowledge, if necessary--are the way the future will be.

Are there homeland-defense mission areas where Northrop Grumman's expertise and products can be applied effectively?

SUGAR: We think the company brings a number of capabilities to bear. One example where our expertise might be relevant involves the extraordinary challenge of sorting and inspecting cargo coming into ports--millions of tons of cargo. Information systems are needed to identify the cargo's origin so that it can be cross-checked in data bases to determine if there is any pattern emerging with cargo arriving from a place where indicators suggest it should be inspected. Otherwise you risk having to shut everything down.

We have unmanned air vehicles like Global Hawk and Fire Scout, an unmanned helicopter, that could be very effective for border patrols. Global Hawks flying 36 hours at a time can survey large areas of the country's borders. The Fire Scout can operate in a hover mode at 10,000 feet--providing an instant watchtower packed with sensors, cameras, synthetic-aperture radars, or other systems.

We are participating very closely with the Coast Guard in the IDS [Integrated Deepwater System] program. If there was ever a validation of the mission of the United States Coast Guard, which has been an extremely important but under-appreciated service, this is their moment. The nation needs the Coast Guard, but its assets need to be recapitalized. In addition to their operations in homeland waters, the Coast Guard is operating in the Persian Gulf and other regions around the world. They need to have the best C4ISR assets as well as better ships and planes.

How critical is Deepwater to the future of the Coast Guard?

SUGAR: It is absolutely essential to recapitalize the Coast Guard with modern C4ISR assets, UAVs, longer-range aircraft, and modern cutters. If that is not going to be done, who will pick up their many missions? The U.S. Navy already has more than it can handle with the fleet at its present and planned size. I would hope that Admirals Loy [Coast Guard Commandant Adm. James M. Loy] and Stillman [Deepwater Program Executive Officer Rear Adm. Patrick M. Stillman] are able to get stable long-term funding for the program. If Congress or the Department of Transportation whipsaws them up and down with significant changes in Deepwater funding every year, the cost to recapitalize the Coast Guard will eventually be much higher.

How serious is the Navy's requirement to recapitalize its fleet of ships and aircraft?

SUGAR: Rocket science is not needed to understand the ramifications. The cycle time involved in building ships is long, and the need to decommission older ships is clear. It is predictable. We understand exactly what is going to happen, and it is not good. The world is not getting safer; it is getting more dangerous. We have not gone up against adversaries with more sophisticated naval forces in recent years--advanced diesel submarines that can stay submerged for weeks at a time, for example--yet that threat is growing in many regions of the world.

There also are adverse industrial-base impacts. It is very difficult to maintain efficiency in the face of unstable shipbuilding plans and budgets. To maintain shipyards--and there are now only two naval shipbuilders left in this country, ourselves and General Dynamics--it is crucial to have stable and reasonable numbers of ships to build. Many different skills and trades are needed to build a ship. Many people in those trades are highly trained and experienced. Many inefficiencies are introduced when you rachet down shipbuilding rates and then try to cycle back up again. You lose skilled people. They leave the shipbuilding business and don't return. It is tough, dangerous work, so it is often hard to attract new people.

We consider the CVN(X) [next-generation aircraft carrier] to be transformational. We must improve the power efficiency and output of the aircraft carrier's nuclear plant if we are to develop new shipboard systems for the future.

CVN(X) is extremely important--it represents the first new-generation aircraft carrier in 30 years. If the CVN(X) program is slipped out to the right and delayed for a year or two, my company will have an enormous problem retaining a highly skilled work force at our Newport News yard. There are gaps now between ship production and scheduled nuclear-refueling overhauls that leave us with enormous roller-coaster swings involving thousands and thousands of people.

We are concerned about costs, and we don't want the government to overpay for our work, but costs grow when you bring in new people without the experience of working in a shipyard for 10, 20, or 30 years building nuclear-powered and conventional ships. When you look at the industrial productivity in our yards and our competitor's yards, you see very clearly that an unstable shipbuilding program generates many adverse impacts and inefficiencies.

We need to do our part to keep costs down, but the one thing the government can do is establish predictable, stable, and adequate levels of shipbuilding so we can make realistic economic assumptions for the future. The number of ships might vary up and down by one or two, but if the funding level is the same it means the workload going through the yards will be roughly the same--and that's good for everyone.

Could private U.S. shipyards meet the demands of higher shipbuilding rates?

SUGAR: Yes, absolutely. We have a national requirement to keep a fleet of least 300 ships, and some believe that 375 ships are needed. My worry is that even if we spurt and build 10 to 12 ships a year by the end of the decade, we are not going to keep up with the numbers of ships scheduled to come out of service. Again, the math is pretty straightforward. Inadequate Navy shipbuilding is fast becoming a true national crisis.

Are you satisfied that the Navy now is on the right course with its revised RFP [request for proposals] for the DD(X) family of future surface combatants?

SUGAR: We believe the Navy is on the right track now with DD(X). We think the program is extremely important. DD(X) will be the basis for the next generation of surface combatants--destroyers and cruisers, and perhaps littoral-combat ships.

The Navy needs to move forward to create new hull, mechanical, and electrical technologies; and weapons systems as well. We and others in industry have been through a remarkably tortuous roller-coaster ride starting with the arsenal ship, DD-21, and now DD(X). If you look at all of the money that many companies and the Navy have invested over five or more years, the nation should have more to show for it.

The San Antonio-class of amphibious transport docks has had its share of problems in the past. What is your outlook now that Avondale is a part of the Northrop Grumman team?

SUGAR: The LPD 17 is a very important class of ships. It will replace four entire classes of older amphibious ships and, when combined with other amphibious assault ships, go a long way toward closing the gap in the Navy/Marine Corps expeditionary lift requirement for the 21st century. The program was restructured, and we believe it is stabilized. We are now on track, and we are bringing the full resources of the Northrop Grumman Corporation available to make this program successful.

I have been on the waterfront at Avondale, and I climbed aboard the San Antonio. She is taking shape nicely. The nation desperately needs the San Antonio class.

I also believe that there are more efficient production approaches than the one we have now that splits the program two thirds and one third between two yards. We are working with the Navy and Bath Iron Works to come up with a new and more cost-effective approach, but I prefer not to discuss the details at this time.

Turning to aircraft programs, some critics have questioned the need for DOD to pursue three major fighter aircraft programs [the Lockheed Martin F-35 Joint Strike Fighter, the Boeing-Northrop Grumman F/A-18E/F Super Hornet, and the Lockheed Martin F-22 Raptor] simultaneously. How would you respond?

SUGAR: Clearly, DOD must work through this, but the requirements are not incompatible. There are different mission emphases and life cycles associated with the aircraft they [the three aircraft named] are replacing. To abandon the greatly improved Super Hornet now, for example, would be sheer folly because the aircraft is in efficient production to replace aging F-14 Tomcats and older Hornets in the fleet.

The F-22 has a very specific mission at the high end of the Air Force's air-superiority mission. The Joint Strike Fighter clearly is the future. The Marine Corps absolutely requires a STOVL [short takeoff and vertical landing] aircraft; frankly, it [the STOVL JSF] defines if the nation will have a Marine Corps with combined air-ground capabilities. The same can be said for the Royal Navy's requirements for the JSF.

These aircraft are very expensive, and there is no question that they will take up a great deal of DOD's budget authority. The Navy also faces a significant challenge trying to balance the costs of recapitalizing the fleet and its naval aviation force of aging aircraft at the same time.

This leads to a broader and more fundamental issue for the Congress and the citizens of our country to consider. Is today's level of defense spending as a percentage of GDP [gross domestic product]--approximately 3 percent--adequate for the kind of life we want to protect in this country? In my view, it is not. We need to do more. For a nation richer than any country in the history of the world, with the vulnerabilities and global responsibilities we face, is that cap the right limit for the next five to 10 years? I think not.

The Department of the Navy and DOD are working closely with private industry to devise better business and acquisition practices to save dollars that could be applied to recapitalization. Is there any reason to believe the new administration will be successful in this regard?

SUGAR: I think there is a very strong will in DOD to do this. In listening to the three service secretaries and Secretary Aldridge [Edward C. Aldridge, under secretary of defense for acquisition, technology, and logistics] I am immediately taken with the importance this effort holds in their minds. Each of these gentlemen has come from industry or past distinguished service in government, so they understand the potential for and importance of savings. There is a good climate for working with the acquisition community--better than anytime in recent years.

If I stood at 100,000 feet, there are three things that I believe would be most helpful in improving the efficiency of the DOD acquisition process. Greater use of multiyear procurements and increased progress payments would allow the industrial base to know where it stands so that it can capitalize, man, and predict many business decisions correctly. Secondly, DOD could obtain greater efficiencies by looking to industry to do more modernization and overhaul work. I know we have an important government-depot structure in the nation, but unless there are unique reasons why the depots can do the work better or more efficiently, we should make better use of what industry can do competitively.

Finally, drastically reducing the cycle time in the RFP [request for proposals] process would lead to much efficiency. Some RFPs seem to drag on forever, forcing industry to keep its best and brightest minds going and going on the same RFP. These same minds could be designing and building things. Compressing the competitive cycle time would still allow the benefits of competition for down-selecting at best price, but in a way that would be much more efficient. You would never take a year to select a general contractor for your new house if you could do it in just a month or two.

Will so-called "spiral development" allow you to get past the RFP faster and then incorporate new design features as technologies mature?

SUGAR: Yes. You will never know everything you need to know on how a future weapon system will be operated so that you can write it all down on paper in an RFP. If you have a system that is, by definition, transformational, the concept of operations is yet to be fully understood. I was involved in the development of GPS [global-positioning system] when I was a young space cadet years ago. Nobody knew the potential of GPS, but eventually every military service needed it. Army doctrine changed--space became critical to their operations on the battlefield. We saw the culmination of that process during Operation Desert Storm when our Army was operating in the barren Iraqi desert with perfect knowledge of where its forces were. The Iraqis did not.

You have been very generous with your time. Is there anything else that you would like to say to members of the Navy League and other readers of Sea Power?

SUGAR: Yes, thank you. As now the Navy's largest supplier, we at Northrop Grumman take that responsibility very seriously. The men and women of this company are working as hard as they know how to bring the best technology and systems to our warfighters.

They are dedicated to the defense of the nation. We view our work for national defense as a mission--not just a business.