This is a partial transcript from Your World with Neil Cavuto, February 19, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: While our country is on the verge of war, a leading defense giant is bracing for change at the top. After 13 years of leading Northrop Grumman, Kent Kresa is preparing to step down. And this guy is stepping up. He's Ron Sugar. He's the president and COO, about to take the reigns of one of the most powerful companies on the planet.
Mr. Sugar, welcome. Congratulations to you.
CAVUTO: Boy, talk about just sort of getting the reigns when we're just getting close to war, that has got to be a little anxious, huh?
SUGAR: Well, certainly we have a very serious responsibility. It is our job to make sure we provide equipment and technology that our folks can use if they're called into battle. And that is what we are responsible for doing.
CAVUTO: The way things stand now, there was a 60 Minutes report and some others that say equipment-wise we are not up to speed, that we might find ourselves behind the 8-ball going into Iraq, that a lot of our equipment has aged, it's dated, there are some flaws. Do you agree with that?
SUGAR: Well, I can't comment on that report. I haven't seen it. But I will tell you that the quality of the technology and the products we have out there and that the forces are equipped with is unparalleled. We have the ability to see deeper and be able to strike more precisely than we ever have.
CAVUTO: All right. Now, of course, you guys make so many of the fancy stuff, you're the second-largest defense contractor in the planet, I guess, behind Lockheed Martin, with the Global Hawk, I think that's what we're taking a peek at right now, and your aircraft carrier, submarines and all that, which will be the most in demand if indeed we come into a conflict with Iraq?
SUGAR: Well, you know, without knowing the specific war plan, and I do not know that war plan, it is hard to say. But certainly almost all of the assets that are going to be brought to bear will have some role in helping having made. Aircraft carriers, of course, provide the ability to strike from a distance. We have the surveillance assets. We also have satellites now as a result of TRW, which will allow us to keep track of what is going on. We have the Joint Stars aircraft and a variety of other systems. So our products will play significantly in this conflict. And our job is to make sure they work well.
CAVUTO: Mr. Sugar, the fear has been, that so many anticipate, that this will be a quick war because essentially Saddam has not been able to do much since we decimated him a dozen years ago and our own technology has advanced so much in that same period of time, that we have almost set up unrealistic expectations for U.S. forces. Have we?
SUGAR: Well, that is hard for me to comment on also. But I will tell you that if called upon, our forces, I am sure, are ready. And they are going to have the right equipment to go do the job.
CAVUTO: All right. Now the joint strike fighter is a piece of equipment that gets a great deal of buzz in and outside the industry. Have you been told by defense pros that this is something that will be used more heavily than almost anything else?
SUGAR: Well, the joint strike fighter, Neil, is now in advanced development and early design. So it is not an existing operational asset. Over the next few years we are going to develop and test and deliver the initial flight versions. So this will be sort of the next generation of aircraft. The aircraft we are going to see engaged now are the ones that we have all been producing, we and the others in the industry for the last 20 years, things like the Super Hornets, the F-14, the F-15, et cetera, B-2 bomber.
CAVUTO: All right. I stand corrected. Let me ask you a little bit about the cost of this. As you know, the president has asked for a big boost to defense spending. Any indications how much of that will come Northrop's way?
SUGAR: Well, we believe that the budget for both research and for procurement of equipment is pretty well set for the next several years. If there is the need to expend munitions and other sorts of things short term for the war, we don't expect to see a significant additional amount of money coming our way for that, because we are involved in the long-term creation of the technology it equips. We also think that if there is a war, a cost that will be handled probably in the supplemental appropriation. So our belief is that we are dealing with a long-term trend here in terms of recapitalization of our military forces, and this is a trend which is going to go for many years irrespective of this war, whether its short of long.
CAVUTO: All right. Real quickly, I know you are a defense contractor. You don't want to comment on political things that are going on outside your company, but as you know, sir, there has been a great deal of reluctance on the part of some of our old friends, the French, the Germans, many others who say that maybe the U.S. should go slow here. If we ultimately go into this without them, which seems likely, any fallout longer term do you think?
SUGAR: Well, I am probably not the right guy to ask for that one, Neil. But I am absolutely certain that if we go into this thing alone or with just a couple of our closest allies we can hands whatever we will see.
CAVUTO: All right. Mr. Sugar, artfully handled, appreciate it. Ron Sugar, the soon to be head of Northrop Grumman. Thank you, sir.
SUGAR: Thanks, Neil.
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