Representatives from Los Angeles-based defense manufacturer Northrop Grumman Corp. visited Atlanta April 17 to announce that a controversial Air Force refueling fleet contract is to enable the company to build an aerospace corridor in the Southeast, creating 4,200 jobs in Georgia.
The contract was awarded over Chicago’s Boeing Corp., which says Northrop Grumman’s partnership with Schiphol-Rijk, Netherlands-based manufacturing group European Aeronautic Defense and Space N.V., or EADS, will cause them to source jobs overseas.
Philip Teel, a Georgia native and Northrop Grumman’s corporate vice president and president of mission systems, told an audience hosted by the Atlanta Press Club Inc. that the company’s selection for the $20-50 billion contract encourages it and its foreign-based partners to expand operations in the Southeast U.S.
That expansion includes enlarging the company’s manufacturing facility in Mobile, Ala., and plans by Toulouse, France-based partner and Airbus S.A.S. to build a plant there. Airbus, an EADS member company, is to build the KC-45 tankers in Mobile and Northrop Grumman is to add the military components.
“When you think about where the aerospace corridors are in the U.S., the Southeast is left out,” Mr. Teel told GlobalAtlanta. “Our company will have access to the region’s resources and no competition.”
Although Georgia already plays a role in the aerospace industry, housing manufacturing operations such as Marietta-based Lockheed Martin Aeronautics Corp. and Gulfstream Aerospace Corp. in Savannah, Northrop Grumman and its partners’ expansions could provide a boost to the regional industry.
Mr. Teel said that the company already has a presence in the state, employing approximately 1,700 people and garnering $62.3 million in sales in the state last year.
The company’s research partnerships with Georgia universities, including Emory University and Mr. Teel’s alma mater, the Georgia Institute of Technology, are to expand as the company adds more jobs in the state.
Mr. Teel said his presentation aimed to make more people aware of Northrop Grumman’s initiatives in Georgia.
“Sometimes I see ourselves as the little train that could, because we’re not very well-known,” he said. “But we’ve had a pretty significant impact on the state, and that’s growing.”
Northrop Grumman has gotten considerable attention since the Air Force awarded it the refueling fleet deal over Boeing, which filed a protest with the Government Accountability Office March 11 saying the competition for the contract had not been fair.
Under the terms of the protest, the accountability office has 100 days to review the deal, a deadline that ends June 19.
The protest sparked a public relations war between the companies, both claiming in press releases, Web sites and news reports to have the better tanker.
In the latest rounds of the dispute, Northrop Grumman launched www.americasnewtanker.com April 3 promoting the KC-45 tanker while Boeing launched a “Tanker Facts” blog and www.globaltanker.com, a Web site on how other nations, including Italy and Japan, are employing its KC-767 aircraft.
Legislators on the defense subcommittee of the House of Representatives appropriations committee held hearings on the deal March 5, expressed concern that jobs created in the U.S. could later be moved overseas.
Mr. Teel said that it was in the company’s best interest to keep job growth in the Southeast, where Northrop Grumman is currently operating. “The jobs are based on where the work is done,” he said. “It doesn’t make good business sense to move those jobs.”
Despite the proposed U.S. job growth, Savannah Congressman Jack Kingston, a member of the House subcommittee, told GlobalAtlanta in a previous interview that Northrop Grumman plans to do 42 percent of the manufacturing outside the U.S.
Boeing’s statements on the deal do not specify where its tanker would be built, but claims it provides the best value for the public.
Mr. Kingston added that it is common for defense contractors to source manufacturing to foreign companies and that the Department of Defense has signed memorandums of understanding with 21 nations countries allowing their defense products to be considered made in America.
This list includes traditional U.S. allies such as France and the U.K., other North Atlantic Treaty Organization members and strategic allies like Egypt and Israel.
