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updated: 7/13/2018 11:13 AM

Northrop Grumman CEO will step down

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  • Northrop Grumman, with offices in Arlington Heights and Rolling Meadows, said Wes Bush, its chief executive, was stepping down and would be replaced by Kathy Warden.

    Northrop Grumman, with offices in Arlington Heights and Rolling Meadows, said Wes Bush, its chief executive, was stepping down and would be replaced by Kathy Warden.
    Daily Herald File Photo

 
 

Northrop Grumman, with offices in Arlington Heights and Rolling Meadows, announced that Wes Bush, its chief executive, is stepping down and will be replaced by Kathy Warden, the company's president and chief operating officer.

"I am delighted that Kathy will become our company's next CEO," Bush said in a statement. "She has demonstrated exceptional leadership in her roles leading the operations of our company, and she brings the vision and values to lead Northrop Grumman into the future."

Bush had been CEO of Northrop, the Falls Church, Virginia-based defense contractor, since 2010. The company did not say why he decided to step down. The move is effective Jan. 1.

"You have often heard me discuss the importance of change in moving our company forward," Bush said, in a memo to employees obtained by The Washington Post. "That healthy dynamic of change requires a constant flow of new ideas -- and of new leadership perspectives.

Tim Paynter, a Northrop spokesman, said that after Bush's long service to the company, "this is the right time to make this change."

The move comes just days after reports surfaced that the company employed a member of a white supremacist organization who participated in a violent rally in Charlottesville last summer. The employee, identified as Michael Miselis by ProPublica and "Frontline," no longer is employed by the company. But Northrop was slow to respond to the allegations, and the news organizations also reported that he had remained employed even after his superiors had been informed of his actions.

In an email to company employees at the time, Bush said that Northrop "would take the appropriate actions to make sure that our foundation remains strong well into the future."

Asked whether the Miselis' alleged affiliation with a white supremacist group played a role in Bush's decision to resign, Northrop's Paynter said "absolutely not."

"The timing of Wes' retirement is the result of a very focused and disciplined succession planning process," Paynter said. "This transition to Kathy is not a surprise, she was appointed to be the president and COO nearly a year ago."

The company faced another public embarrassment last month when NASA announced that it will again have to delay the launch of its James Webb Space telescope until March 2021, as the cost soared an additional $800 million to $9.66 billion. The delay was the recommendation of an independent review board that found widespread systematic problems, human errors and unrealistic expectations about the cost and schedule for such an ambitious project.

Earlier this year, the company made a bold move, acquiring Orbital ATK, a rocket manufacturing company, for $7.8 billion, which would give it a strong foothold in lucrative government launch contracts. The company is also developing the Pentagon's next-generation bomber fleet, the B−21 Raider, a classified program that could be worth tens of billions of dollars. It beat out a team of Lockheed Martin and Boeing in the highly sought after procurement, one of the Pentagon's biggest in years.

One of the world's largest defense contractors, the company has a wide-ranging portfolio, from cybersecurity systems to drones, missile defense and space. It is a key contractor on the F−35 Joint Strike Fighter.

Loren Thompson, a defense consultant, said that when Warden was elevated to the COO position last year, "it was a signal that succession had begun."

Warden's ascension to chief executive means that yet another of the large defense contractors will be run by women. Marillyn Hewson is chief executive of Lockheed Martin. Phebe Novacovic is chief executive of General Dynamics. And Boeing's Arlington-based defense division is run by Leanne Caret.

Thompson called Bush "a godsend for Northrop Grumman shareholders. Nobody in the industry believed when he became CEO that the share price would have get as high as it is today. In fact, the company was in such bad shape when Wes took over that his predecessor had to fight to get him the job."

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