Trends and Opportunities: U.S./U.K. Defense Cooperation in a New Environment
Trends and Opportunities:
U.S./U.K. Defense Cooperation in a New Environment
On Thursday, February 2, 2006, Northrop
Grumman Chairman, CEO and President
Ronald D. Sugar
addressed the Royal United Services Institute for
Defence and Security Studies in London. In his speech, Dr. Sugar discussed
ongoing collaboration between the United States and the United Kingdom. Sources:
Thank you Sir Paul (Lever, chairman of RUSI). I am very
pleased to be here at the Institute.
I marvel to think of all the speakers who have addressed RUSI
audiences over the decades. Many of them no doubt drew parallels between the
importance of their topic and the gravity of their times. I believe these, too,
are important times, and that the importance of defense cooperation between the
United States and the United Kingdom is of a comparable scale. The geopolitics
is a topic best left to the leadership of your nation and mine. But I can
discuss the defense cooperation that those geopolitical realities compel.
I am quite optimistic about our future together. This is not
empty sentiment. One reason I am here in London is to cut the ribbon on a new
office that my company — Northrop Grumman — is opening here. We are already very
active in the UK, but this new office will help us pursue even more cooperative
opportunities. So, when I say that we foresee better cooperation between the
U.S. and the U.K., I mean it.
Yes, our nations disagree on some questions like export
controls and market access, and I will discuss those in a moment. But, all in
all, I believe that we agree far more often than not. I also believe that the
current course of history will only confirm those areas of agreement and
eventually deflate many areas of contention. The past five years offer a case in
For over a decade before the attacks of September 11th,
serious thinkers about military affairs pondered what they foresaw as a coming
transformation of warfare. The one thing they all seemed to agree on was the
growing importance of technology to deal with a more diffuse list of threats.
This has largely come to pass.
The Cold War priorities of massed armored formations and
maneuver have been displaced by the importance of precision targeting,
information, training, discipline, asymmetric advantage, systems engineering,
space, integration, “special operations,” agility, versatility, and imagination.
In short, the national security of your nation and mine balances on the fulcrum
of intellectual capital.
As the world’s two foremost defense innovators, these trends
play to our strengths. And these strengths are best maximized through
collaboration and cooperation. The relationship between the United Kingdom and
the United States has never been more relevant.
Clues to that answer can be found in several policy documents — the Quadrennial Defense
Review from the Department of Defense, and the Defense Industrial Strategy from
the Ministry of Defense.
The Pentagon will deliver the QDR to Congress on Monday. That
body mandates that our nation’s defenses be reviewed every four years with
particular emphasis on Force Planning and modernization. Though not yet released
to the public, we may infer several things about it. First of all, we are
confident it will renew the momentum of defense transformation even in the midst
of on-going warfare. This will continue to be a challenging task. President Bush
has described the objective of transformation as nothing less than the
redefinition of war on our terms. He has also said that doing so under our
current circumstances is like overhauling an engine while going at 80 mile an
If past is precedent, I believe it is safe to predict that
the QDR will continue to stress agility and situational awareness. It will also
stress integration among the services, across our federal, state and local
agencies, and among our friends and allies. As to this last point, it is worth
noting that one of the key drafters of the QDR is an official from the Ministry
The QDR will look at four core problems: The defeat of
extremism; the in-depth defense of the homeland; the shaping of the choices of
countries at a strategic crossroads; and restricting the proliferation of
Weapons of Mass Destruction. Some of the capabilities necessary to address those
core problems will include layered and integrated intelligence, surveillance,
and reconnaissance technologies such as unmanned vehicles, sensors, and
space-based intelligence assets. Our ground forces will need enhanced force
protection, improved battle command and control, and precision joint fires. The
QDR will spur us to think about how to integrate strategic offensive
capabilities with layered missile defenses. It will also imply a need for
advanced and integrated maritime systems to multiply the capabilities of the
Navy, the Coast Guard, and the naval forces of friends and allies.
Though not analogous to the QDR, your nation’s recently
released Defense Industrial Strategy also provides clues to the future of US/UK
defense cooperation. It is candid and comprehensive and its starting point is
quite logical — to create long-term value for money spent, while supplying
Britain’s military with the tools it needs to defend the Kingdom.
Of note are its calls for industry that is rationalized,
leaner, more efficient and productive. For its part, Her Majesty’s Government
recognizes a need to partner more closely with industry, and support its
reshaping to emphasize platform based acquisition to through-life support of
systems. This last point simply recognizes the reality that, in most cases, the
platform is no longer as important as the systems placed on it or in it. Our
youngest B-52 bomber aircraft is older than most of the pilots who fly it, but
it is still a relevant aircraft because of the systems upgrades it receives. In
like fashion, Northrop Grumman has been given the job of keeping your Airborne
Warning and Control Systems … or AWACS — up to date at RAF Waddington.
A reading of the DIS makes clear your governments desire to
attract outside investment in its defense industry, and to develop symbiotic
relationships therein. Clearly, your government is looking not just to modernize
but — to coin a term — to futurize. You have looked down the road a long way and
made a shrewd assessment of where defense transformation is headed.
Clearly your government intends to capitalize on these trends
to the benefit of your nation’s autonomy and freedom of action. One can also
infer your government’s desire for the valuable, high-quality jobs that
characterize cutting edge technology. For example, the document emphasizes
systems engineering, open architectures, and the accumulation and retention of
scientific and engineering talent. I see wisdom here. How many times have we
underestimated the magnitude of tomorrow’s technology? Let me read you a brief
quote from the March, 1949 edition of Popular Mechanics. It concerns the ENIAC
computer, the world’s first electronic digital computer, built just a few years
Quote – Where a calculator on the ENIAC is equipped with
19,000 vacuum tubes and weighs thirty tons, computers in the future may have
only 1,000 vacuum tubes and perhaps only weigh one and a half tons – unquote.
Now, let’s fast-forward to that future the writer was talking
about. In 1968 an engineer at the Advanced Computing Systems Division of IBM was
pondering the new microchip. He was heard to say, “But what is it good for?”
Let’s go a few more years into the future, just to make the
point. 1977. The President of Digital Equipment Corporation said, “There is no
need for any individual to have a computer in their home.”
It is not possible to overstate the national security
importance and economic potential of high tech intellectual capital. The future
of information systems, software engineering, systems engineering, and
electronic engineering is virtually without bounds for as far as the eye can see.
Compare that future to the current outlook of one of America’s flagship heavy
industries, auto manufacturing.
Northrop Grumman started out as an aircraft builder. We built
the F-14 Tomcat and the B2 stealth bomber to name two. We currently build the
center sections of the F-18. But it would have been industrial suicide to sit on
those laurels, impressive though we think they are. So several years ago we
embarked on a series of acquisitions that made us major players in IT,
integration, systems engineering, and other related technologies. As builders of
manned aircraft, we felt we had no choice.
Perhaps you have heard the description of the cockpit crew of
the future. It conveys the nature of the changes now taking place in many areas
of defense technology. Future cockpit crews, it is said, will consist of a human
pilot and a dog. The pilot’s job will be to feed the dog. And the dog’s job will
be to bite the pilot if he tries to touch anything. Actually, now with unmanned
air vehicles like Northrop Grumman’s Global Hawk, we need neither the man nor
Facing the challenge of declining demand for manned aircraft,
we decided to rebuild our company from the ground up. The DIS seems to convey
similar vision. For example, it implies that the United Kingdom does not care
who builds your navy’s hulls. It is the systems, software, and electronics that
go into them that your government wants to design, build, and control. I can
Taken together, what do these two documents — the QDR and the
DIS — indicate for the future of U.S./U.K. defense cooperation? I think we can
safely conclude a few things. First, the “brain over brawn” trend in defense
will continue for both the U.S. and the U.K. This is one of the trends that has
allowed British defense — combat forces — to punch above their weight for so
long. Technology, innovation, imagination and agility will continue to be the
Second, your government is warmer than ever to the notion of
industrial partnering under the right circumstances. Last year Northrop Grumman
and the wireless division of British Telecom completed such a partnership by
deploying, and making operational, the Public Safety Radio Program here in the
UK. This was an enormous undertaking that included cell towers, hand-held units
and other infrastructure. It amounted to the establishment of a nation-wide
private and secure cellular system for your first responders — police, fire
brigades, and the like. This program went without a hitch and speaks loudly in
favor of other such partnerships in the future.
From that example — and from the DIS — we can also conclude
that as the line continues to blur between defense and domestic security,
traditional defense companies must be versatile, offering systems and
capabilities that have applications in domestic security and even general
“non-security” markets. If this trend continues it could eventually obviate some
export control disputes, while increasing other concerns such as third party
indemnification. The threshold for foreign companies to play in the UK
marketplace is not impossibly high.
Let me offer you a case study in how to satisfy the interests of all parties.
Your government has a need for a biometric IT system that can cross-check
identities against a database. Such a system will allow the Home Office to
mitigate the security risks inherent in the one hundred million people who visit
your shores each year. The company I lead aspires to be prime contractor.
The potential of such a product explains why. Once in place
here, the requirement is for it to integrate with other EU nations, and even
some nations outside the EU. Because the UK will retain the engineers and
software designers, the product remains based here — with all the economic and
security advantages that implies. The UK could then eventually migrate it to
other friendly countries world-wide. Your government does not care which nations
own the parent companies as long as the intellectual capital stays and grows
here at home. The UK’s rule book is not that hard to adhere to.
Experience, like knowledge, is its own reward. Our
understanding of that rule book comes from past partnerships with your
government. Northrop Grumman was the prime contractor for the Home Office’s
keystone project known as IDENT-ONE. This is a centralized database of six
million sets of fingerprints, and will provide the foundation of the National ID
program if Parliament passes that legislation.
What a wonderful industrial relationship we have.
An old pilot’s axiom says that you know your landing gear is
up and locked if it takes full power to taxi to the terminal.
Your nation and mine have all the makings for superb
collaborative opportunities. We have the Special Relationship; a common language;
similar values, economic and strategic interests; and a history of industrial
partnerships and partnerships in wars cold and hot. But we can apply all the jet
engine power we have and we still won’t get to the terminal until we figure out
how to fix the wheels.
There may be many of you who cannot understand why the U.S. —
your closest ally — will not grant you the same export and market access
freedoms as the United States grants to Canada. I count myself among you.
Certainly there are issues that must be negotiated by
governments — the subsidy issue and the F-35 question are two such examples. It
is also true that the International Traffic in Arms Regulations — or ITAR —
discourages foreign cooperation. But it is the law of my land and all of us in
American industry must play the cards our government deals to us. There is no
doubt that some export control laws and regulations currently in force on my
side of the Atlantic were established during the Cold War for reasons that no
longer apply. That should be addressed.
I was recently elected Chairman of our American Aerospace
Industries Association — a trade group that advocates on behalf of our aerospace
industry. That organization counts several important British companies as
members, including Rolls Royce, BAE, Smiths Aerospace, and GKN. It is my
intention to make export control reform a major objective of my Chairmanship and
we will soon formulate an agenda to do so.
In the mean time, there are things other nations can do to
further their chances of playing in the American defense market. Foremost among
them is the adoption of foreign counterparts to America’s Defense Industry
Initiative on Business Ethics and Conduct — the so-called DII standard. Doing so
would go a long way toward cultivating those in Congress who would otherwise not
be supportive of reform.
The international adoption of this standard underpins our
ability to improve our cooperation with other nations. The Aerospace Industries
Association is now formulating an international version of the DII initiative.
This, too, will be high on my agenda as Chairman.
The endurance of the Special Relationship between our
countries has been remarkable. And the strategic and geopolitical fruits it has
borne have been reproduced nowhere else in the world. Those fruits have included
advances in radar, jet engines, submarines, space, nuclear, communications,
optics, sensors, and aircraft carrier design.
During the Cold War the UK’s nuclear deterrent was critical.
During the Falklands war, America shared satellite and communications
intelligence with the UK, and helped your nation defeat Argentinean air defense
radars and tracking systems. And of course, in Iraq and Afghanistan, the UK’s
coalition presence has been magnificent — its contributions monumental.
Yes, we have our disagreements — market access among them.
But as American Ambassador Mitchell Reiss once said, “It is our ability to
disagree — to argue passionately, candidly, and forcefully with each other — and
then to pick up the pieces, place our anger behind us and go forward together,
that makes the relationship special and explains why it has thrived.”
I see great collaborative opportunities on the horizon for
our two nations — opportunities that will benefit our economies, our mutual
national interests, and the ideals and principles common to all free nations.