"There is nothing on the horizon that will catalyze" an employment increase in Northeast Ohio by Northrop Grumman Corporation, its Chairman and Chief Executive Officer Ronald D. Sugar told an City Club of Cleveland audience Monday.
"Information technology is at the core of the nation's strength," Sugar said, as the wrecker's ball is demolishing buildings at the nearby Ravenna Arsenal, once an icon for the prowess of Northeast Ohio industries' contribution to the nation's military security.
The George Gund Forum on the American Economy sponsored Sugar's appearance.
"Twin spin" is what Sugar described as the intersection of commercial and government markets and is where future innovation will occur, Sugar told an audience gathered for the George Gund Forum on the American Economy. The forum is named for the eponymous Cleveland entrepreneur.
Northrup Grumman sales have quadrupled in recent years, because the company has the "correct business strategy," Sugar said. A six-year Cleveland resident in the 1990s, while he was an executive with TRW, Inc., the Cleveland-based high-technology manufacturer. It was taken over by Los Angeles-based Northrop Grumman because of a terrible business decision by TRW's board of directors to pay cash for an auto parts company when the profitability of that industry was shrinking rapidly.
Sugar pointed warned his audience about the risks of overpaying for companies. He noted that the market capitalization of all defense contractors today is less than the value of Microsoft Corp., the world's largest software company.
The global war on terror will last for 40 to 50 years. "It will be like the next 'cold war,'" he said, noting that the benefits to society will be greater than were those arising from the previous cold war, in that most innovations will have both commercial as well as military applications.
He said that the United States' ability to retain a global advantage in information technology will work toward maintaining the nation's military security, as defense contractors employ U.S. citizens and do not out source work to foreign nationals.