LOS ANGELES, Dec. 10, 2010 -- Speaking yesterday to a gathering of business and civic leaders, Northrop Grumman Corporation's (NYSE:NOC) Gary W. Ervin, corporate vice president and sector president, Aerospace Systems, said California's aerospace industry continues to drive innovation and economic growth in the state.

"Other industries—Hollywood, finance, the Internet—may get more attention, but aerospace remains large and highly competitive here," Ervin affirmed in remarks delivered at a Town Hall Los Angeles luncheon.

As the state's largest aerospace company, Northrop Grumman employs nearly 30,000 people in California and works with 5,500 suppliers for a total economic impact of $7.4 billion. The industry as a whole supports more than 112,000 jobs in California, according to the Aerospace Industries Association.

Just as aerospace helps to drive California, the state's educational and technological resources remain central to the industry's success, Ervin said.

"The fact that the largest aerospace companies such as Northrop Grumman have a major presence here is no coincidence," he said. "California offers world-class institutions of higher learning that provide skilled employees, more NASA centers than any other state and important Air Force, Navy and Marine Corps installations that support research, development and testing."

The result, he said, is that California fosters competition and innovation in products such as unmanned aerial systems (UAS), as well as the technologies that make them unique.

"California sits at the center of the unmanned systems universe because competition drives innovation," Ervin said. "Northrop Grumman competes against smaller companies with UAS products in a range of sizes and with missions that are expanding as the capabilities become better known."

For example, Northrop Grumman's RQ-4 Global Hawk is a high-altitude, long-endurance UAS that can fly as long as 32 hours with sensors (some developed in California) which "see" through any type of weather, day and night. Global Hawk has flown more than 36,000 hours of combat reconnaissance missions with the U.S. Air Force but has also been used in civil applications such as natural disaster relief and wildfire monitoring. Global Hawk is developed in San Diego, produced in Palmdale and operates from Beale Air Force Base near Sacramento.

Ervin also discussed the importance of the space industry in California. He noted that the James Webb Space Telescope, successor to the Hubble telescope and the nation's number one priority for astrophysics research this decade, was designed and is being built at Northrop Grumman's Redondo Beach facility.

Despite the aerospace industry's current good health, Ervin expressed caution as to the uncertainty over future U.S. defense budgets. Defense leaders have discussed canceling major programs and set goals to achieve greater efficiencies by increasing affordability and productivity.

"Industry is ready to work with government, but we must be careful because there's risk in cutting the defense budget for deficit reduction," Ervin said. "Industry and government must work together to make focused decisions on which weapons systems the nation needs and make sure we maintain the ability to design and build them.

"There's no substitute for actually building things," he added. "Without adequate investment the industrial base will atrophy, and that base has always been more about people and innovation than facilities and production. Technological innovation must be preserved because, once lost, it's difficult and costly to restart."

Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.

  CONTACT: Jim Hart
         Northrop Grumman Aerospace Systems
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