Expected delays to key test gives Northrop Grumman its first COVID-19 blow, says GlobalData

Following the news that the US Army has sent home White Sands Missile Range personnel to face the COVID-19 threat, which will postpone the limited user test (LUT) of the integrated air-and-missile defense battle command system (IBCS);

Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the postponment;

“The postponement of the IBCS test would be a hard blow for Northrop Grumman’s Mission Systems business, which accounted for 36% of the company’s sales in 2019 – second only to its Aerospace Systems business. IBCS already has a long history of delays and failures, but it is considered a core element of the army’s new concept of integrated warfare and therefore a strategic priority.

“IBCS is also a joint-development program in partnership with Poland. All parties had every interest in the LUT: Northrop Grumman to reassure on the viability of the program and the Army in order to validate and field it as soon as possible next to the Polish forces.

“Northrop Grumman has been relatively sheltered from the COVID-19 crisis so far, as the majority of its cash flow comes from governmental contracting and subcontracting in protected programs such as the F-35 or the AARGM-ER. But the company had great hopes that the long-awaited LUT could convince the army to kick-off full-scale rollout, finally ensuring a financial return from a long-term investment. Seeing another postponement to the troubled program, even for external reasons, would be an unnerving prospect for the company.”

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