诺斯罗普CEO谈金穹项目与弹药产能扩张

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Kathy, thank you so much for your time. It's uh an incredibly interesting time, I'm sure, to be running a defense prime. Uh, and I wonder how you're thinking not just about North Grumman's wartime footing now, but how the current conflict we are embroiled in in the Middle East has made you consider what wartime footing of the future needs to look like.

Well, first of all, thank you for having me. It's great to be with you and it is a dynamic time in the industry that uh Northrup Breman operates in. We are certainly on a wartime footing because we've been quite active supporting the administration and operations around the globe as you know and at the same time working to build the capability and capacity that we need for the future both as a nation and for our allies.

So that work for us has meant expanding across much of our portfolio in the ability to build faster and building plants that allow us to have the capacity so that we can accelerate the rate at which we are building product and delivering them to the US government.

Well, and on that exact point, obviously with the depletions we have seen in the Middle East, this administration wants to be uh rebuilding munitions specifically. They want them ASAP. And I wonder how prepared the defense industrial base and and the supply chain is to meet that moment now or if there are areas in which more serious investment is crucially needed.

There's certainly the need for more investment, but I will say that we have been investing. When you look at the work that we've been doing in our company, we didn't start this last year or even a couple of years ago. Certainly as we saw increases in national security spending both by the US and our partners around the globe, we started to plan for and build capacity for that moment. We just in the last two years alone have added 2 million more square feet of manufacturing space.

We've opened those facilities. They are producing today. I'll be at a facility tomorrow walking the floor and it is a buzz with activity in our manufacturing plants today. So that work has been underway and is delivering results today. With that said, there is more capacity expansion planned because to your point, the administration sees the need for far more, sometimes two times, four times the amount of capacity that we have in place at this moment.

Well, and when you consider what they're trying to ramp up, things like that and Patriot systems because we've been using them for air defenses in the Middle East. How much of that is about expanding a factory footprint versus being reliant on specific components like solid rocket motors being able to be ramped up quickly? We build solid rocket motors as you know and we have seen that that area of the supply chain had limitations because in most cases each weapon only had one company qualified to produce.

And when you have an expectation to very dramatically increase capacity, one company trying to do that across multiple weapon systems obviously has limitations. So the government has sought more sources and for tactical missiles, Northrup was not a primary provider and we're getting the opportunity now to become a second source supplier for solid rocket motors in that area. We had focused more on strategic missiles, think bigger solid rocket motors, and now we are getting qualified to produce some of the smaller ones for products like PAC 3.

Do you see more room to grow in the munition space specifically since it seems that that is an area of acute focus for the Pentagon right now?

Yes, we believe that's going to be one of the fastest growing parts of our market, if not the fastest growing market. And we are positioned with capacity. I mentioned that 2 million square feet of manufacturing space. Some of that is dedicated to solid rocket motor production. And we had a head start there. We started that investment more than three years ago. So we've already doubled capacity. We have another plant that we are building today that will take capacity to about 3x what it was when we started this expansion.

So that positions us as we are signing these new contracts and becoming qualified to be a supplier to be ready to go now. Well, and I I want to go back to your point about how sometimes there is one supplier of one key uh component. Is that the biggest challenge in scaling up so much of this is specific bottlenecks in the supply chain such as that? And do you feel like you have enough visibility into into the subtier parts of the supply chain?

Right now,

we have been focused on increasing that visibility all the way down the supply chain. We've always had very good visibility to our first tier and even our second tier supply, but we now are down to the material level, the very commodities that our first and second tier suppliers are relying upon. And we're doing capacity planning with those suppliers as well so that we can assure the very basic parts which in a solid rocket motor is chemicals for instance that we have enough supply to build all the way up to the manufactured product.

Well, and you're doing this work as a company, but what is the Pentagon asking of you in terms of its own visibility into that? Are they seeking information from you or giving you information?

It's a little bit of both. It is a partnership. It is mostly asking for the information that we have and then offering to supplement that because they can see beyond our portfolio into the demands of other companies that are supplying them and they have a fuller picture of what that supply ecosystem looks like in the aggregated demand.

Well, trying to get that fuller picture on on the Pentagon side, the deputy defense secretary Fineberg sent out a memo just last week asking for more specific uh cost and pricing data. And I wonder what your reaction to that was and whether or not it is asking for something overly burdensome for you and other companies or if this is relatively on par with what Northrup already would be providing as it seeks a contract.

In most cases, we're already providing that data today and we have systems set up that allow us to collect it and we are all for transparency and so we're happy to provide it. There are companies that don't have systems. They're called cost accounting systems that collect that data and have auditability and transparency to the government for that data today. And so I am sure that from some in industry you might hear that this is going to require them to take extra steps.

For the most part this is something that we already are structured to do.

Well and let's talk about different contracts you may be doing that for. Northrep is competing right now for a Navy fighter. the FAA X FAXX could be awarded sometime soon and I just wonder what you feel is the company's positioning right that in right now in terms of of being well positioned to potentially have to develop that program from the ground up while also trying to scale up everything else B21 included we've spent a lot of time looking at how we will execute the program and I feel confident in our team's ability to do that with all of the other things that we have underway for each team gets a dedicated set of individuals who are focused solely on executing that program.

And at the same time, our company has resources that can surge to support aspects of our business like an FAXX program, which would have a steep ramp at the beginning. And that has worked very well for us. We perform well in those early days to get a program off to a running start. And in this case, we've ensured that we have suppliers ready to do the same, investing alongside of us and prepared to execute.

Well, can you broadly outline, and you don't have to get too specific, but what the Pentagon defense industrial base uh experts have wanted to see from you in terms of of sourcing material.

They have asked for transparency