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Northrop Grumman States a Favorable GAO Ruling Should End All Tanker Delay

KC-45 Program Must Move Forward

WASHINGTON, D.C. - June 17, 2008 - Northrop Grumman Corporation (NYSE:NOC) said today that if the Government Accountability Office (GAO) rejects the protest filed against the Air Force selection of the Northrop Grumman KC-45 aerial refueling tanker, there should be no further delay in the program moving forward.

"We have to keep in mind that the Air Force was ready as early as 2001 to begin replacing the aging KC-135 tanker fleet. The failed tanker lease agreement, coupled with the improper actions of our competitor, put the brakes on the tanker replacement effort," said Randy Belote, Northrop Grumman vice president of corporate & international communications. "If we're given the 'all clear,' it is critical that we get to work."

Aerospace Daily & Defense Report recently quoted Air Mobility Command chief, General Arthur Lichte, as saying that he wants to accelerate purchases of the new KC-45A tanker. He has expressed a desire to get funding approved for the fiscal 2010 budget request now being put together at the Pentagon. The goal is to boost production from 15 per year to 26 per year. A faster infusion of the new aircraft into the fleet would allow faster retirement of maintenance-needy KC-135s; otherwise, some KC-135s will still be flying in 2040.

Belote points out that there are tankers in the air right now that are older than Sputnik, and it is imperative that they be replaced by Northrop Grumman's modern and more capable KC-45s as soon as possible. "Forcing these 50-year-old KC-135s to fly even longer increases the chance of structural and system failures, putting the lives of our men and women at greater unnecessary risk."

Meanwhile, the costs add up. KC-135s cost more per hour to fly than the KC-45. KC-45 airlift capacity will also enable the Air Force to reduce flying hours on the overstressed C-17 fleet, saving over $500 million per year.

In addition, more delay makes it more likely that money currently set aside for the tanker program could be diverted to other service or U.S. Department of Defense programs. The loss of these funds would require drawing on monies set aside for the KC-X program in 2009, which in turn would cause rippling delays to the entire effort and ultimately increase the overall cost of the new tankers.

"While Boeing was within its rights to protest, it has knocked the program three months off schedule," Belote added. "Further delay will achieve nothing but an increase in cost and risk." GAO affirmation of the Air Force selection will be the second win in a row for Northrop Grumman and the KC-45.

"Two in a row should be enough," Belote said. "It is our hope that anyone considering delaying this program any further, for any reason, would weigh their parochial desires against our shared patriotic duty to provide the new tanker to our men and women in uniform as soon as humanly possible."

"If the GAO gives the all clear, it's time to get to work," concluded Belote.

About the KC-45

The KC-45 Tanker aircraft will be assembled in Mobile, Ala. - establishing Mobile as the new cornerstone of the Southern Aerospace Corridor. The program will employ 48,000 American workers at 230 U.S. companies in 49 states; and will be built by a world-class industrial team led by Northrop Grumman, and includes EADS North America, General Electric Aviation and Sargent Fletcher.

Northrop Grumman Corporation is a global defense and technology company whose 120,000 employees provide innovative systems, products and solutions in information and services, electronics, aerospace and shipbuilding to government and commercial customers worldwide.

CONTACT:  Randy Belote
          (703) 875-8525

          Tim Paynter
          (321) 961-1101

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