Good for Washington, Bad for America?

Business columnist Steven Pearlstein has an interesting take in today's Washington Post on Northrop Grumman's plans to move its headquarters to the Washington area from Los Angeles (which we reported on earlier this week).

The 300 jobs and presence of another Fortune 500 headquarters are certainly good news for the D.C. region. What troubles Pearlstein is that Northrop's move is more evidence of aerospace's shift away from being a cutting-edge, entrepreneurial industry to one that is more conservative and beholden to Wall Street.

"The entrepreneurial engineers and flyboys of the early years, and the swashbuckling executives of the Cold War, have largely given way to button-down corporate managers -- General Dynamics' last two chief executives have been a lawyer and a former utility executive, while the heir apparent at Lockheed Martin is a former partner at the accounting firm Ernst & Young," Pearlstein writes.  "And while they all keep one eye on their government customers, the other is fixed permanently on Wall Street, where investors now expect double-digit earnings growth."

Pearlstein also quotes an anonymous former Northrop executive as saying that if the company really valued innovation, quality and reliability it would keep its headquarters close to the systems engineers that are actually designing and producing its products. The full column can be read here.

An article I co-wrote last month in Aviation Week & Space Technology expressed similar concerns that aerospace CEOs are too focused on what Wall Street thinks of them and not paying enough attention to the industry's long-term challenges. That article can be read here.

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