NATIONAL HARBOR, Md.—Northrop Grumman [NOC] CEO Wes Bush said yesterday the defense industry needs to stick to its knitting despite suggestions that Pentagon contractors should capitalize on commercial opportunities to supplement declining federal work.
“Our industry exists for a reason,” he said. “To the extent that commercial activities would divert us from that focus is a mistake.”
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| Northrop Grumman CEO Wes Bush. Photo: Northrop Grumman. |
Bush said increasing the “field of thinking” with the commercial sector is important, but that the defense industry must hold onto its mission.
“We need to measure the adjacency,” he said. “If you have to stretch that tape measure way out, it’s a diversion.”
Bush’s comments come as commercial industry leaders in information technology, such as IBM [IBM] and HP [HPQ], have increased their footprints in federal contracts.
Speaking at the Air Force Association’s Air and Space Expo here, Bush distinguished defense contractors from their commercial counterparts.
“It’s important that we guard against our companies becoming large conglomerates that have a defense component,” he said.
Bush’s speech addressed the outlook for the defense industrial base. He warned that declining research and development funding as well as the stagnation in STEM education will erode the industry’s future. He called on contractors to begin investing their own resources into R&D efforts.
“We recognize that R&D investment is the engine for our enterprise,” he said, explaining that it helps attract young talent and produce innovation.