![\"\"](\"\/wp-content\/uploads\/2026\/08\/brown_bill_570x570_0.jpg.jpg\")
But we also contributed to and de-risked our pension plan. We won\u2019t have any cash contributions required over the next several years. That\u2019s important to know because it was one of the considerations when we bought Exelis. We have reduced our pension deficit by $1 billion, or about 40 percent, in the last year to $1.3 billion.<\/p>\n\n\n\n
And one of the hallmarks of the company is, even though we\u2019re maintaining those high margins, we continue to invest significantly in internal R&D. Company-funded R&D has been running at about 5 percent of revenue as a company \u2014 well ahead of our peers. And I think that, and some of the investments that we\u2019ve made, is what\u2019s allowing us to grow into fiscal \u201918. I feel really good about what the team has accomplished over the course of fiscal \u201917.<\/p>\n\n\n\n
I recall Exelis had a bigger issue with pension liability than some. I know it\u2019s a little bit of a false liability sometimes, given it\u2019s dependent upon rates, but I remember when the acquisition happened, that was a factor that came up.<\/b><\/p>\n\n\n\n
That\u2019s exactly right. We did not have a pension, but they did. It was a relatively small company, and when you looked at the size of the unfunded liability \u2014 or even the gross liability \u2014 as a percentage of the market cap, it was one of the highest in the industry \u2014 in any industry in the U.S. Because of that, they were a little bit constrained [in terms of] being able to invest in new technologies to advance their business. Together, we\u2019ve been able to absorb potential liability, we generated cash to fund it, interest rates have worked a little bit in our favor \u2014 as we had expected that they would \u2014 and we continue to invest heavily into our business. And I think you\u2019re seeing that in the growth that\u2019s coming through next year. It\u2019s not just in the legacy Harris, but it\u2019s also in the Exelis businesses as well.<\/p>\n\n\n\n
So digging a little bit more, I know you saw a healthy uptake in tactical communications, driven a bit by some of the legacy radio sales internationally. Is that a long-term revenue base, or do you see that eventually petering out in terms of global buys?<\/b><\/p>\n\n\n\n
We had a very good year in our tactical business. We came in about flat year over year, [whereas] we were guiding at the beginning of the year to be down pretty substantially. So better than we thought. A lot of it came out of Europe; Europe had a fantastic year, far above the prior year, upwards of 50 percent. And a lot of it is the funding that\u2019s happening in Eastern Europe.. A lot of it is national funds. For example, Ukraine is U.S.-government funded, with a lot of investment in upgrading their network architecture. We also saw good growth in Canada, in the Central American, Latin American region. Overall, it was good. We were soft in the Middle East, [but] we knew that was going to happen. Soft in Central Asia \u2014 again, we knew that was going to happen. As we look into fiscal \u201918, we see our international tactical business to be flat, or even down modestly. We\u2019ll see very good growth in the Middle East and Africa. Africa is very strong, Northern Africa as well as sub-Saharan. We\u2019ll see good growth in Asia, primarily coming out of Australia.<\/p>\n\n\n\n
We\u2019ll see Europe come down a little bit because it\u2019s coming off a record year. We\u2019ll see Central America coming down a little bit, again off a record year.<\/p>\n\n\n\n
Space and intel was down a bit, but if I\u2019m remembering correctly, that was mainly attributable to nondefense business. Am I right?<\/b><\/p>\n\n\n\n
It was down about 4 percent in the quarter. It was about flat for the year, and that\u2019s where we expected it to be. Two-thirds of that business is classified, and those budget[s] are growing well. And it\u2019s growing in areas where we\u2019ve got good positions. So, the outlook for the classified side of that business is pretty good.<\/p>\n\n\n\n
Now in terms of that classified business, I know by its very definition you can\u2019t talk much about it. But are there general statements in terms of the kind of investments that are really driving some of the stronger growth in that area?<\/b><\/p>\n\n\n\n
For us in particular, where we\u2019ve seen growth is around what they call space superiority — the ability to protect the overhead architectural assets. And we have great positions in lots of different domains that support that. That\u2019s the biggest area, it\u2019s well-funded, and you can read very much publicly around some of the concerns that happen to be out there. Exelis has a good, strong electro-optic capability, Harris is more of a [radio frequency] player, and the combination of those two basic technologies is also opening up new mission areas for us, more end-to-end solutions that we can provide to the classified community. That\u2019s really what\u2019s driving the growth in the classified.<\/p>\n\n\n\n
Now you mentioned, of course, that you had a couple of divestitures. Was there anything, in retrospect, that you need to build back up?<\/b><\/p>\n\n\n\n
We got out of what businesses that we thought were more commodity like. So CapRock was one where they were a provider of bandwidth to both commercial and government customer. But they were an intermediary in many ways, selling capacity. We [also] sold our IT services business, which again was relatively low margin. We got out of those two pieces. What we have right now is we\u2019ve got a great set of core businesses, core franchise. They\u2019re all of scale, they all require technology for differentiation and I think we\u2019re all well-positioned \u2014 given where the budgets are moving \u2014 to grow really across all of them.<\/p>\n\n\n\n
You recently announced a win under the Army mobile network program. Can you give me an update on that?<\/b><\/p>\n\n\n\n
Yes. It\u2019s very, very interesting. We won a position on a $461 million IDIQ [indefinite-delivery, indefinite-quantity contract]. Typically, the Army spends between $20 [million] to $40 million a year upgrading their land mobile radio, or LMR, technology on U.S. bases. And our competitor in this space was sole-sourced up until now. That procurement has been opened. We won a position on an IDIQ and received an initial task order of $10 million. It allows us to go and compete to provide radio technology for U.S. Army bases in the U.S., and I think it will open up to other service bases in the U.S. as well. It\u2019s a new market that we weren\u2019t able to compete in before, and allows us to leverage off the relationships that we have today across all the services including in the Army.<\/p>\n\n\n\n
That area of the business has always had its up and downs, if I remember correctly. How significant would this be in terms of potentially stabilizing the revenue there?<\/b><\/p>\n\n\n\n
I think it would be a piece of it. That public safety business is low $400 millions in size.. This year it was down about 5 percent, and we\u2019ve seen the business erode a little bit every year for the last several years. Going into fiscal \u201918, we\u2019ve seen it stabilizing. It can grow beyond that; in the low-, single-digit range is what we would expect. And winning a position on this contract vehicle \u2014 which again could provide $20 [million] to $40 million of opportunity \u2014 could drive some incremental growth for us.<\/p>\n\n\n\n
Where do you see the most potential growth in the coming year for Harris?<\/b><\/p>\n\n\n\n
We\u2019ve got three segments. Our electronic systems segment has been growing very, very well. It had very strong growth this past year, up about 4 percent. We see that business growing in the mid- to high-single digits beyond fiscal \u201918. It\u2019s got a number of different pieces: one is our electronic warfare business. That business has been growing very well, orders are very strong, growing at a double-digit rate. We provide the electronic warfare systems for international F-16s, many of which will be upgraded over time. We provide the Integrated Defensive Electronic Countermeasures system for F-18s, [which involves both] new builds as well as retrofits on them. We provide the electronic warfare system on the B-52, which is being upgraded. We provide the EW systems on certain rotary aircraft. All of these are being updated, upgraded, based on threats that we\u2019re seeing from around the world.<\/p>\n","protected":false},"excerpt":{"rendered":"
Defense News spoke to Harris Corporation’s CEO to find out where the company sees its future opportunity, and how narrowing focus can enable growth.<\/p>\n","protected":false},"author":7,"featured_media":73111,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":25,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":{"9":{"categories":["home","c2-comms","industry","daily-brief","newsletters"],"primary_category":"home"}}},"categories":[160,12,13,36,25],"tags":[],"coauthors":[2572],"class_list":["post-34034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-industry","category-interviews","category-newsletters","category-top-100"],"acf":{"subheadline":"","legacy_arc_id":"LRVLUZFHPFAABICTNTRXQGVEH4","arc_canonical_url":"\/top-100\/2017\/08\/07\/interview-harris-ceo-bill-brown-on-narrowing-the-corporate-focus\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"\n