Northrop Grumman awaits fate of military ship contracts

New Orleans CityBusiness, Jun 16, 2008 by Jaime Guillet

The Northrop Grumman Corp. shipbuilding sector has undergone major renovations, but company executives say they will have little effect on the 268-acre Avondale shipyard.

On Jan. 28, Northrop consolidated its two former shipbuilding sectors -- Newport News, Va., and Ship Systems, which includes Avondale and Pascagoula, Miss., -- into one division -- Northrop Grumman Shipbuilding.

As the nation's sole industrial designer, builder and fuel supplier of nuclear-powered aircraft carriers and one of two companies that designs and builds nuclear-powered submarines, Northrop's shipbuilding presence in Louisiana is significant. Although headquartered in Los Angeles, Northrop's shipbuilding activity in Louisiana accounts for nearly 5,500 jobs and a $168- million economic impact in 2007.

Northrop's goal for the recent realignment was to find "better ways to deploy our people, capital assets and technology," said C. Michael Petters, Northrop Grumman Shipbuilding president.

"(The realignment) is a critical part of our strategy of building ships in the future," Petters said. "(It's) four months into the experiment and we've made substantial progress."

While Northrop has consistently talked about a need for more employees at its Avondale yard the past few years, Petters said he is comfortable with its current standing.

"All in all, we're pretty well staffed in Avondale. We're in pretty good shape," Petters said.

The most significant event in 2007 for both yards was the christening of the amphibious transport dock ship USS New York, which is constructed with 7.5 tons of steel from the World Trade Center destroyed in the Sept. 11, 2001, terrorist attacks, said Bill Glenn, a spokesman for the company's Pascagoula facility.

Between the Louisiana and Mississippi shipyards, Northrop continues to work on 12 shipbuilding contracts comprising four classes of ships. The company recently delivered two of the eight security cutters it is building for the U.S. Coast Guard.

In March, Northrop beat out Chicago-based Boeing Co. for a $35 billion-plus contract to build 179 Air Force tankers, the bulk of which should be built in the Gulf Coast area.

"(The Air Force tanker) is a big win for us," Petters said. "It also means more economic development for the Gulf Coast. It's an even bigger success for this part of the region. We've very excited about this part of the country."

Northrop Grumman still awaits Congress' vote to fund the 10th and 11th Landing Platform Dock-class ships in the $601 billion defense bill for 2009. The company is building the last four DDG51 class destroyers remaining on a 28-ship contract and just received the contract to build one DDG 1000 Navy destroyer.

Petters said the company will deliver two LPD-class ships to the Navy in late 2008 and into 2009.