Northrop Corp. President Kent Kresa yesterday acknowledged that his troubled defense firm has suffered "flaws and failures" but said it has "undertaken a massive and thorough company-wide effort to correct our weaknesses."
The Los Angeles-based defense company, which builds the B-2 "stealth" bomber and is competing to produce the Air Force's new generation stealth fighter jet, has been the target of dozens of government investigations alleging mismanagement and fraud.
Kresa appeared before a House Government Operations subcommittee three days after a senior Air Force official revealed details of an internal review that sharply criticized the management of every Northrop weapons program it examined.
Since that testimony Tuesday, Kresa and Air Force Secretary Donald B. Rice have appeared before several congressional panels, in open and closed sessions, to defend Northrop. The damage-control efforts came as Congress and several committees prepared to take key votes on defense programs, including the B-2.
"There have been flaws and failures, there have been mistakes and there have been things done in the past that were flatly wrong," Kresa told the government operations panel yesterday. "I accept responsibility for taking whatever actions are necessary so that those problems do not recur tomorrow."
Rice told the Senate Armed Services Committee Thursday that the Air Force ordered its review of Northrop "because of the degree and pervasiveness of the problems and because of challenges inherent in the advanced, high-technology involved in several Northrop programs."
Rice added, however, that the Air Force is "pleased now to see demonstrations of significant change in several aspects of Northrop operations and a commitment to resolve those problems which had not yet been addressed."
The Air Force review, discussed before a House committee this week but which officers said is not available for public release in a written report, charged that Northrop is poorly managed, has not been able to properly account for weapons cost and schedules and suffers breakdowns in moving from laboratory development to the production of weapons.
Kresa said yesterday that the corporation is strengthening its management system, improving training programs for employees and putting "renewed focus on the company's values and ethics."
Rep. John Conyers Jr. (D-Mich.), chairman of the Government Operations subcommittee on legislation and national security, charged that past improprieties by Northrop employees involving the AV-8B Harrier jet has "increased the risks our Marine Corps pilots take daily in training and now on deployment in the Persian Gulf."
Northrop was convicted earlier this year of fraud in connection with testing of a critical guidance and stabilization component of the jet fighter, and the Pentagon has temporarily suspended the Precision Products Division responsible for the fraudulent testing from doing business with the military.
Marine officials told the committee earlier this week that action has resulted in a shortage of gyroscopes for the Harriers. Kresa told the committee yesterday that Northrop has offered to give the Marines 104 free gyroscopes to compensate for the shortage. The equipment would be worth about $300,000, a Northrop official said.