Quietly in command

Much like Northrop Grumman Corp.’s stealthy B-2 bomber, the company’s chief executive has flown under the radar for most of his career overseeing the development of many of the nation’s top-secret weapons.

Unassuming and devoid of the cigar-chomping flamboyance that distinguished aerospace executives in the past, Ronald Sugar -- a former whiz kid from South Los Angeles -- often shuns the limelight.

Yet few in aerospace are as influential to the nation’s defense and security.

“If you met him on the street, you’d never know he runs one of the world’s largest defense companies,” said Paul H. Nisbet, who has been a Wall Street analyst following the aerospace industry since the 1970s. “He is not a silver-spoon executive.”

Sugar is in charge of a company with 120,000 employees scattered across 50 states and 25 countries developing and building weapons and technologies that touch virtually every aspect of U.S. military and intelligence operations. It is one of Southern California’s largest private employers, with 27,000 workers in the region.

Its satellites keep an eye on North Korean missile silos as its robotic planes hover over Afghanistan looking for Taliban operatives. Its massive aircraft carriers project America’s military power overseas as its nuclear-powered submarines covertly roam under the sea. In super-secret hideaways, its technologies eavesdrop on suspected terrorists and its computer networks help run federal agencies.

In the industry’s heyday, such a company would have been headed by larger-than-life figures such as billionaire Howard Hughes or firebrands such as Litton Industries’ Charles “Tex” Thornton.

But these days Sugar -- who looks like a banker, with balding head and eyeglasses -- is the epitome of the modern-day aerospace executive, analysts said.

“He is subdued and thoughtful rather than outspoken and colorful,” said Loren Thompson, a longtime defense policy analyst for the Lexington Institute. “The industry has had its fill of cowboys. What it needs now are calm, analytical people, and Sugar fits that mode.”

Northrop, like other defense firms, is facing significant turbulence after nearly a decade of growth. Wall Street is mixed on whether Sugar can steer the company through what is expected to be a protracted slowdown in Pentagon spending. Analysts said his legacy might hinge on how well Northrop adjusts to new realities of shrinking defense budgets.

Sugar, 60, oversees the $34-billion defense empire from a Century City high-rise that offers a sweeping view of L.A.

Looking out toward Los Angeles International Airport, he can make out Northrop’s sprawling F/A-18 fighter-jet plant in El Segundo. Just to the south, there is the company’s Space Park in Redondo Beach, where his engineers work in secrecy developing spy satellites.

From his large yet sparsely decorated office, Sugar also has an unobstructed view of his past and a reminder of how far he has come. In the hazy distance, Sugar can make out the South Los Angeles neighborhood where he grew up helping his parents run a beauty salon. In the hills at the opposite end is his current home in Bel-Air.

Publicity shy, Sugar rarely talks about growing up in one of Los Angeles’ tougher neighborhoods.

Born in Toronto, Sugar moved with his family to Los Angeles in 1954. His parents, both high school dropouts from Canada, ran the beauty shop, near Western Avenue and Century Boulevard, after driving to California in an old Ford sedan. It took nine days, recalled Sugar, who was barely 6 at the time.

Although his parents never graduated from high school, having had to work because of the Great Depression, Sugar said he grew up in an intellectually stimulating household. His father excelled in math and always had the desire to be an engineer but “never had the educational opportunity to do it.”

When Sugar turned 12 and was about to begin high school, the family moved to a home a few blocks from Northrop’s aircraft-making factory on Crenshaw Boulevard

The neighborhood was “tough,” Sugar said. Though gunfights were rare, teens wielding knives were not unusual, he said.

--

The smartest kid

But among his classmates at Leuzinger High School, there was little doubt that Sugar would go far, though few would know how far.

“He was definitely the brightest person around,” said Linda Lisiecki, a classmate who was in many of the “gifted” classes with Sugar.

He was also somewhat of an oddity. Baby-faced and nearly three years younger than most of his classmates, Sugar often found himself trying to talk his way out of scuffles with physically larger classmates.

Report-card days were the worst, Sugar recalled. “The one thing that you don’t want to do is have someone pull your report card out of your pocket and find you had straight A’s.”

He often tried running away, but, Sugar said, “I quickly discovered I wasn’t a fast runner.”

Sugar said being roughed up provided an invaluable experience that became useful as he climbed up the corporate ladder.

“You certainly learn how to deal with adverse situations and you learn how to handle yourself,” he said. As the smartest kid in school, Sugar was voted the “most likely to succeed” and later was the valedictorian for the graduating class of 1965.

According to his high school yearbook, Sugar was not only the youngest graduate that year but also was a consummate nerd. The 1965 “Pylon” lists Sugar as having been a president of the school’s geekiest groups, including the math club, the band and the scholarship society, and he was captain of the academic quiz team.

There seemed to be only one other student who could rival Sugar academically, a sophomore from Hawthorne who would later become his wife. Valerie Higuchi would graduate two years after Sugar, also as a valedictorian.

Valerie’s father, Tamotsu “Tom” Higuchi, had served with the famed “Go for Broke” U.S. Army unit, the 442nd Regimental Combat Team, during World War II. The Japanese American unit was the most decorated during the war.

While her father fought in Europe, Valerie’s mother lived in an Arkansas internment camp. After the war, the Higuchis returned to Hawthorne.

“We grew up in a blue-collar neighborhood. But his parents and mine were very bright people, and in today’s world they would have gone to college,” Valerie Sugar said.

The couple had met when Valerie was in sixth grade, and according to Valerie they officially began dating when she was in ninth grade.

After high school, Sugar attended El Camino College in Torrance because his parents couldn’t afford a four-year university.

But Sugar would excel, and he was offered full scholarships to Caltech and UCLA. Figuring Valerie was likely to go to UCLA, he gave up Caltech for Westwood.

“We tell everybody that if our children made a similar decision, we would have been all over them.” Valerie Sugar said.

The couple married in 1971 shortly after Valerie graduated from UCLA. They have two grown children; the older one, a son, graduated from Princeton University, and their daughter is a Dartmouth graduate.

There was little doubt that Sugar was among the brightest even at a time when the industry was attracting the nation’s best minds as the Cold War ratcheted up the development of sophisticated weapons.

He would rise quickly through the ranks at TRW Inc., becoming at 35 the chief engineer for the development of the payload for the nation’s first major military communications satellite system, known as Milstar. “They said I was too young to run it so they made me the chief engineer,” Sugar recalled.

“I knew he was outstanding, so I knew he would move up the company rapidly,” said Simon Ramo, co-founder of TRW and the father of the nation’s ballistic-missile system.

Ramo, one of the last remaining so-called cowboys of aerospace, who retired from TRW in 1978, said “everybody wanted to hire Sugar.”

A top post seemed only a matter of time, but Sugar, who had been at TRW for more than 20 years, was passed over as a possible successor to then-Chairman Joseph T. Gorman in 2000. He bolted for another company, Litton Industries in Woodland Hills.

The move would turn out to be timely. Northrop Grumman, on an acquisition spree, purchased Litton a year later in a deal that placed Sugar in line to be Northrop’s CEO. Northrop then capped its spending spree by acquiring TRW.

In 2003, Sugar was named chairman and CEO of Northrop Grumman, succeeding Kent Kresa, who had rebuilt an aerospace company teetering toward bankruptcy. In the early 1990s, Pentagon contracts had dried up as the Cold War ended, leaving Northrop with one major program, the B-2.

--

Defensive moves

Since taking the helm, Sugar has focused most of his attention on integrating the companies that had been acquired over the years and looking at expanding the company internally. Northrop, which generated $7 billion in annual revenue in 2000, could surpass $35 billion this year.

But Northrop and the defense industry are about to face some head winds as the Pentagon looks at cutting back on big-ticket weapon programs.

Sugar has said Northrop is in a better position than other defense companies because it isn’t dependent on any one big Pentagon program. The company is involved in more than 20,000 programs, with no single contract accounting for more than 3% of annual revenue. Still, with the anticipated slowdown, Sugar has been urging Northrop managers to expand the company’s engineering know-how to commercial and civil markets.

Sugar has taken some political hits for partnering with a European defense contractor to build a new generation of aerial refueling tankers for the U.S. Air Force and has been embarrassed by development problems in shipbuilding.

He was somewhat vindicated when Northrop upset heavily favored Boeing Co. last year for the $35-billion aerial refueling tanker contract. But that award was overturned and the Air Force has been forced to hold another competition.

Northrop’s growth has come while other defense contractors have been embroiled in controversy and scandals. The company, for the most part, seems to have avoided major ethical breaches. Still, ethical conduct has been one of Sugar’s main management concerns. Senior managers are required to take ethics classes once a year.

Steven Sample, president of USC, where Sugar has been a trustee since 2003, said the Bruin alumnus is highly respected even among die-hard Trojans.

“I really like the person and I think he has very high ethical standards,” Sample said. “You always run the risk of being embarrassed by someone who goes off in an unethical direction. I can’t imagine Ron Sugar doing that.”

A registered Republican, Sugar has given more in campaign contributions to Democrats, reflecting the cold calculation that defense spending decisions can depend on politicians on both sides. His strongest trait has been a personable one-on-one management style that he has tried to convey to his managers, according to former and current employees.

In a recent annual gathering of several hundred Northrop managers, Sugar walked into the ballroom and without explanation began playing the piano. After playing a classical piece for about five minutes, he got up and began talking about how he enjoyed playing the piano and shared other personal details.

“It was very leveling,” said Barry Z. Pozner, dean of the Leavey School of Business at Santa Clara University and co-author of “A Leader’s Legacy,” a management book that cites Sugar. “People would later come up to him and have a personal conversation. It was another way to get connected with people.”

The point of the exercise, Sugar would say, “is that if people were going to follow you, they need to know more about you than the fact that you are their boss. They need to know your hopes, dreams, talents and expectations.”

Leadership, Sugar said, “is personal.”

--

peter.pae@latimes.com

--

(BEGIN TEXT OF INFOBOX)

A Northrop chronology

Northrop Grumman Corp., headquartered in Century City, is a conglomeration of nearly two dozen defense and aerospace companies, including TRW, Litton and Westinghouse -- most of them acquired in the last two decades.

1939: John K. “Jack” Northrop forms a namesake military-aircraft-making company in Hawthorne. He builds its first aircraft, the N-3PB patrol bomber, in 1940.

1946: Jack Northrop designs and builds the first XB-35 flying wing, which would be the basis for the development of the radar-evading B-2 stealth bomber more than 40 years later.

1959: The first Northrop F-5 fighter jet takes flight.

1989: The first radar-evading bomber, the B-2, is secretly developed in Hawthorne and assembled in Palmdale.

1994: Northrop acquires Grumman Corp., maker of the F-6F Hellcat and the F-14 Tomcat fighter jet.

1996: Northrop buys Westinghouse Electric Corp.’s defense and electronics business.

1997: Logicon Corp., developer of an automated mail-sorting system for the U.S. Postal Service, is acquired.

1999: Northrop buys Teledyne Ryan Aeronautical, developer of the high-altitude, long-endurance Global Hawk unmanned reconnaissance and surveillance plane.

2001: Litton Industries, a developer of aircraft navigation systems and a military shipbuilder, is acquired.

2001: Northrop buys Newport News Shipbuilding, a maker of nuclear-powered aircraft carriers and submarines.

2002: Northrop acquires TRW’s aerospace business, which makes satellites, space telescopes and laser weapons.

2008: Northrop’s annual revenue grows to $34 billion from $3 billion a decade before. The company is now the nation’s second-largest defense contractor, after Lockheed Martin Corp.

-- Peter Pae

--

Ronald Sugar

Title: Chairman and chief executive, Northrop Grumman Corp.

Salary: $1.5 million; $5.5 million in restricted stock awards (2008)

Born: July 30, 1948, in Toronto. Has lived in Los Angeles since 1954.

Residence: Bel-Air