Northrop to pull out of shipbuilding?

[buglerbilly]

Ares

A Defense Technology Blog

Northrop Gets That Sinking Feeling, Eyes End of Shipbuilding

Posted by Michael Bruno at 7/13/2010 5:39 PM CDT

Northrop Grumman, one of the U.S. military’s two major shipbuilders, said late this afternoon it is reconsidering its entire shipbuilding business, including consolidating its embattled Gulf Coast units and even sell-offs.

“Recognizing our company's long-term strategic priorities, we foresee little synergy between Shipbuilding and our other businesses,” said CEO Wes Bush. “It is now appropriate to explore separating Shipbuilding from Northrop Grumman.”

Bush, who as a new chief executive has not been afraid to make dramatic changes, said in a prepared statement that the moves were driven by “customer” needs, but that they will also will “ensure long-term improvement” in the company’s naval program performance, cost competitiveness and quality.

Meantime, Northrop will consolidate its Gulf Coast shipbuilding operations like LPD-class Navy ships in Pascagoula, Miss. Construction at nearby Avondale will wind down in 2013. The company said it expects higher costs to complete ships currently under construction in Avondale, due to anticipated drops in productivity, so it will increase the estimates to complete LPDs 23 and 25 by about $210 million.

Of that amount, $113 million will be swallowed as a one-time, pre-tax cumulative charge to Shipbuilding's second-quarter 2010 operating income, according to Northrop. The balance will be recognized as lower margin in future periods, principally on LPD 25.

Strategic alternatives for the Shipbuilding business include, but are not limited to, a spin-off to Northrop shareholders, the statement said. The company has engaged Credit Suisse as its lead financial advisor.

Changes to Avondale and Northrop’s shipbuilding business had been debated publicly since the spring. “The yard faces a bleak business outlook due to weak demand from its U.S. Navy customer and chronic production problems,” Lexington Institute executive and defense industry consultant Loren Thompson wrote in April. Meantime, Bush has removed Northrop from competition for the USAF KC-X aerial refueling tanker program while also announcing a move of the company’s headquarters from Los Angeles to the Washington, D.C., suburbs.

Northrop said it will webcast a conference to discuss the Shipbuilding announcement at 10:30 a.m. EDT on July 14.

[buglerbilly]

Louisiana Politicians Mobilize for U.S. Shipyard

By CHRISTOPHER P. CAVAS

Published: 13 Jul 2010 14:18

Faced with the potential closure of its biggest shipyard and the loss of thousands of jobs, a group of Louisiana's top political leaders met Monday with Northrop Grumman executives to see what might be done to keep the yard open.

"Northrop Grumman indicated to us that Northrop Grumman does not intend to keep Avondale open for the long term in the absence of a viable Navy shipbuilding program there," Gov. Bobby Jindal, R-La., said at a press conference in Baton Rouge following the meeting with Northrop shipbuilding president Mike Petters. "Shipbuilding at Avondale could end by 2012 or 2013."

Jindal was joined at the press conference by Democratic Sen. Mary Landrieu and Republican Reps. Steve Scalise and Bill Cassidy.

The bleak future for Northrop's Avondale shipyard near New Orleans was initially signaled in late March, when Petters told Congress that declining U.S. Navy ship orders forecast in the latest 30-year shipbuilding plan presume "there will be a smaller industrial base required to support the plan."

While not mentioning the Avondale yard by name, Petters has pointed to the impending end of the LPD 17 amphibious ship construction program and the cancellation of plans to build new LCC command ships as key factors in a potential "rationalization" of the company's shipyards. Of Northrop's two major shipyards on the Gulf Coast, the Avondale yard has specialized in amphibious and auxiliary ships, while the larger Ingalls shipyard at Pascagoula, Miss., builds destroyers, big-deck amphibious assault ships and large Coast Guard cutters in addition to the LPDs.

Jindal, at the press conference, spelled out the situation.

"Specifically, the Navy has updated its shipbuilding procurement plan to push back the LCC program, which would have provided a great deal of work for Avondale after the LPD program. Moreover, the LPD 26 and the LPD 27 [the last of the LPD 17-class ships] would keep workers at Avondale busy through 2015. However, we learned from recent discussions with [Northrop Grumman] that the company could potentially move the construction of the LPD 26 and the LPD 27 both to Ingalls in Mississippi, which would mean that shipbuilding at Avondale could end by 2012 or 2013.

"If the LPD program were to be completed early at Avondale, there is nothing significant left in the Avondale backlog and the Navy's 30-year plan, which leaves the facility without a major ship program to produce after about 2012.

"This presents a tremendous economic challenge to the Avondale area. The roughly 5,000 direct jobs at the Avondale site support about 6,500 additional indirect jobs in the New Orleans region, meaning a total of roughly 11,500 jobs are at risk due to this change in the Navy's procurement program," Jindal added.

The southern Louisiana region is reeling from a series of setbacks that began in August 2005, with the devastation caused by Hurricane Katrina. Ironically, while the Ingalls yard was completely flooded by the storm and suffered severe damage, the Avondale facility was relatively undamaged, although a great percentage of its work force lost their homes. The New Orleans region is losing about 4,500 existing and potential jobs from the cancellation of NASA's Constellation program to return to the moon, and the cumulative effect of the BP oil spill and continuing moratorium on new deepwater drilling, according to Jindal, "is eventually expected to destroy roughly 20,000 direct and indirect Louisiana jobs."

Among the options being discussed for Avondale's future is the possibility of the shipyard's sale.

"We have already begun discussions with several potential buyers and tenants," Jindal said. "An alternate owner or tenants for the site is not the optimal outcome for Louisiana because it is unlikely an alternative would have a similar level of employment as Avondale has today."

Jindal said he plans to meet with Navy Secretary Ray Mabus in the upcoming week to discuss the situation. Mabus, who as Navy secretary oversees development of Navy shipbuilding plans, also has been tasked by President Obama with developing plans to restore the Gulf Coast in the aftermath of the oil spill.

[buglerbilly]

Northrop to Close Avondale, Might Leave Shipbuilding

By CHRISTOPHER P. CAVAS

Published: 13 Jul 2010 22:08

Northrop Grumman on July 13 confirmed rumors that it will close down its Avondale shipyard near New Orleans and consolidate its Gulf Coast shipbuilding operations at the company's Ingalls yard in Mississippi.


The Avondale, La., shipyard specializes in building LPD 17-class amphibious ships. (NORTHROP GRUMMAN)

In a greater surprise, the company also announced it is exploring strategic alternatives for its shipbuilding business.

Northrop is the U.S. Navy's largest shipbuilder, supplying the service with nuclear-powered aircraft carriers and submarines, surface warships such as DDG 51-class destroyers, and all the Navy's amphibious ships. Its yard in Newport News, Va., is the only yard in the world capable of building full-sized nuclear carriers. About two-thirds of all U.S. Navy ships are built by the company. The Ingalls yard in Pascagoula also builds the U.S. Coast Guard's National Security Cutters.

"Our decision to consolidate the Gulf Coast facilities is driven by the need for rationalization of the shipbuilding industrial base to better align with the projected needs of our customers," Northrop CEO and president Wes Bush said in a statement released late July 13. "The consolidation will reduce future costs, increase efficiency, and address shipbuilding overcapacity."

The company announced it would take a pre-tax charge estimated at $113 million in the second quarter of 2010 as a result of the consolidation. A $296 million tax benefit unrelated to the shipbuilding decisions also will be included in the second quarter financial results. The company's 2010 guidance will be updated with the new financial figures July 29.

The consolidation is also leading the company to increase its expected costs to complete two LPD 17-class ships by about $210 million, which the shipbuilder will take off its expected margin for the ships.

The Northrop statement indicated shipbuilding at Avondale will "wind down" by 2013. Incomplete LPD ships will be towed for completion to Ingalls, and the company will consolidate all future LPD construction at the Mississippi yard.

The consolidation moves do not affect Northrop's composite construction facility at Gulfport, Miss., which makes structures such as the superstructure for new DDG 1000-class destroyers, and masts for LPDs and aircraft carriers.

Northrop shipbuilding chief Mike Petters met July 12 in Baton Rouge with Louisiana Gov. Bobby Jindal and several other state politicians to discuss the planned closure of Avondale. Jindal said after the meeting he planned to appeal to Navy Secretary Ray Mabus to keep the yard open.

"This presents a tremendous economic challenge to the Avondale area," Jindal said July 12. "The roughly 5,000 direct jobs at the Avondale site support about 6,500 additional indirect jobs in the New Orleans region, meaning a total of roughly 11,500 jobs are at risk due to this change in the Navy's procurement program."

The southern Louisiana region already is reeling from a series of setbacks that began in August 2005 with the devastation caused by Hurricane Katrina. Ironically, while the Ingalls yard was completely flooded by the storm and suffered severe damage, the Avondale facility was relatively undamaged, although a great percentage of its work force lost their homes. The New Orleans region is losing about 4,500 existing and potential jobs from the cancellation of NASA's Constellation program to return to the moon, and the cumulative effect of the BP oil spill and continuing moratorium on new deepwater drilling, according to Jindal, eventually is expected to eliminate about 20,000 direct and indirect Louisiana jobs.

Northrop's decision to explore strategic alternatives for shipbuilding came from an assessment of the company's long-term strategic priorities, Bush said.

"We foresee little synergy between shipbuilding and our other business," Bush said in the statement. "It is now appropriate to explore separating shipbuilding from Northrop Grumman."

In the statement, Northrop said it would evaluate whether a separation of the shipbuilding business is in the best interests of shareholders, customers and employees. The company has engaged Credit Suisse as its lead financial advisor, and also is being advised by Perella Weinberg Partners.

[buglerbilly]

Northrop Grumman to Consolidate Gulf Coast Shipyards and Explore Strategic Alternatives for Shipbuilding Business

(Source: Northrop Grumman; issued July 13, 2010)

-- Future Gulf Coast Ship Construction to be Consolidated in Mississippi Facilities
-- Ship Construction at Avondale Facility to Wind Down in 2013
-- Company will also Explore Strategic Alternatives for Entire Shipbuilding Business
-- Company to Record an Estimated Q2 2010 Pre-tax Shipbuilding Charge of $113 Million Related to the Consolidation
-- Q2 2010 Financial Results will also Include a $296 Million Tax Benefit Unrelated to the Shipbuilding Decisions
-- Net Impact of Tax Benefit and Shipbuilding Charge to Increase Q2 2010 Earnings from Continuing Operations by About $0.73 per Diluted Share
-- 2010 Guidance to be Updated with Announcement of Q2 2010 Financial Results on July 29

LOS ANGELES ---Northrop Grumman Corporation announced today plans to consolidate its Gulf Coast shipbuilding operations and explore strategic alternatives for its Shipbuilding business. As a result of the Gulf Coast consolidation, the company will recognize an estimated pre-tax charge of $113 million in the second quarter of 2010.

In addition, as previously disclosed, in the second quarter of 2010, the company will record a tax benefit of $296 million related to the final settlement with the Internal Revenue Service of tax returns for the years 2004 through 2006.

The net impact of the charge and the tax benefit will increase second quarter 2010 earnings from continuing operations by about $0.73 per share. Neither of these items is reflected in the financial guidance the company provided on April 28, 2010.

Consolidation Actions

"Our decision to consolidate the Gulf Coast facilities is driven by the need for rationalization of the shipbuilding industrial base to better align with the projected needs of our customers. The consolidation will reduce future costs, increase efficiency, and address shipbuilding overcapacity. This difficult, but necessary decision will ensure long-term improvement in Gulf Coast program performance, cost competitiveness and quality," said Wes Bush, chief executive officer and president.

"We are extremely proud of our Avondale shipbuilders and their dedicated contributions to our company and our nation. We will work with federal, state and local officials and others to explore alternate uses for Avondale as the last two ships under construction reach completion," said Bush.

The consolidation of Gulf Coast ship construction is the next step in the company's efforts to improve performance and efficiency at its Gulf Coast shipyards, which began with the integration of its shipbuilding operations in early 2008. Since that time, Gulf Coast organization and leadership, operating systems, program execution, risk management, engineering, and quality have been the focus of intense improvement efforts.

Consolidating new ship construction on the Gulf Coast in one shipyard will position Shipbuilding to achieve additional performance improvement and efficiency over the long term. Ship construction at Avondale will wind down in 2013. Future LPD-class ships will be built in a single production line at the company's Pascagoula, Miss. facility. The company anticipates some opportunities in Pascagoula for Avondale shipbuilders who wish to relocate.

Strategic Alternatives

"Our decision to explore strategic alternatives for Shipbuilding is the result of a portfolio assessment to determine how to best serve our shareholders, customers, and employees. The performance improvement initiatives underway in our Gulf Coast operations will be further enhanced by the facilities consolidation. Recognizing our company's long-term strategic priorities, we foresee little synergy between Shipbuilding and our other businesses. It is now appropriate to explore separating Shipbuilding from Northrop Grumman," said Bush.

The company will evaluate whether a separation of Shipbuilding would be in the best interests of shareholders, customers and employees by allowing both the company and Shipbuilding to more effectively pursue their respective opportunities to maximize long-term value. Strategic alternatives for the Shipbuilding business include, but are not limited to, a spin-off to Northrop Grumman shareholders. The company has engaged Credit Suisse as its lead financial advisor. The company is also being advised by Perella Weinberg Partners.

Financial Impacts

As a result of the consolidation, the company expects higher costs to complete ships currently under construction in Avondale due to anticipated reductions in productivity and, as a result, is increasing the estimates to complete LPDs 23 and 25 by approximately $210 million.

Of this amount $113 million will be recognized as a one-time, pre-tax cumulative charge to Shipbuilding's second quarter 2010 operating income. The balance will be recognized as lower margin in future periods, principally on the LPD 25. The company also anticipates that it will incur substantial restructuring and facilities shutdown-related costs including, but not limited to, severance, relocation expense, and asset write-downs.

These costs are expected to be allowable expenses under government accounting standards and recoverable in future years under the company's contracts. The company estimates that these restructuring costs will be more than offset by future savings expected to be generated by the consolidation.

Northrop Grumman will webcast a conference call to discuss today's announcement at 10:30 a.m. EDT tomorrow. A live audio broadcast of the conference call will be available on the investor relations page of the company's Web site at http://www.northropgrumman.com. Replays of the call will be available on the Web site for a limited period of time.

Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide. (ends)

Naval Shipbuilding: Northrop Grumman Takes Next Step In Strategic Repositioning

(Source: Lexington Institute; issued July 14, 2010)

(© Lexington Institute; reproduced by permission)

Northrop Grumman disclosed on July 13 that it would consolidate naval shipbuilding operations on the Gulf Coast, and seriously consider exiting the shipbuilding business through a sale or spinoff of its yards.

Chief Executive Officer Wes Bush bluntly stated what many people inside the company already knew: naval shipbuilding is not a good fit with Northrop Grumman's other business lines or future plans. In fact, it has been a chronic drag on Northrop's financial results since former CEO Kent Kresa backed into being the U.S. Navy's biggest shipbuilder while trying to build up his company's defense-electronics offerings a decade ago.

Northrop Grumman executives have grown increasingly exasperated over the years with the uneven performance of their Gulf Coast shipyards, a problem which predated the devastation wrought by Hurricane Katrina in 2005. As a succession of management teams failed to remedy performance problems at the Gulf yards, company leaders began to ask themselves why one of the world's premier high-tech firms was engaged in the grimy business of naval metal-bending at all.

The company's Newport News shipyard in Virginia generally performs at a higher level of proficiency than the Gulf Coast yards, but it too has seen production issues that seldom arise in the company's other operations. Those other operations, concentrated in aerospace, electronics and information services, are fundamentally different in character from the shipbuilding sector.

Whatever the ultimate disposition of Northrop Grumman's shipbuilding assets, yesterday's bold move once again signals the determination of Wes Bush to transform his enterprise into a more focused, investor-friendly enterprise. Over the last year, the company has streamlined its organization, refined its financial performance metrics, replaced top leaders and announced plans to move the corporate headquarters from Southern California to Northern Virginia.

All of these moves, like the decision on shipbuilding, are intended to make the company more responsive to its shareholders and customers. CEO Bush knows he must improve performance to weather the coming downturn in domestic defense demand, but his goal is a bit more ambitious than mere improvement.

He wants Northrop Grumman to be the best company in the defense sector, and if that requires getting rid of under-performing people or properties, then that's what he intends to do. Wes Bush is a man on a mission.

-ends-

[buglerbilly]

La. Officials Rip Northrop Plan to Close Avondale

By DEBORAH BARFIELD BERRY, GANNETT WASHINGTON BUREAU

Published: 15 Jul 2010 16:34

Northrop Grumman's plans to close its shipbuilding operation in Avondale, La., will cost Louisiana thousands of jobs at a critical time for the region's already fragile economy, Louisiana lawmakers have said.

The company announced plans July 13 to close the plant by 2013 and consolidate operations at its facility in Pascagoula, Miss.

The decision "couldn't have been more cruelly timed," said Rep. Charlie Melancon, a Democrat.

"We are working to cope with the severe economic impact of the BP oil disaster, and now one of our major employers has decided to close up shop and leave our state," Melancon said in a statement.

Democratic and Republican lawmakers from Louisiana want to meet with U.S. Navy Secretary Ray Mabus, a former Mississippi governor, to discuss the closing. Mabus also heads the administration's recovery efforts for the Gulf of Mexico oil spill.

Sen. Mary Landrieu, D-La., said she will urge Mabus and Northrop Grumman officials to "reverse this short-sighted decision."

Republican Sen. David Vitter, a member of the Senate Armed Services Committee, said President Barack also must "step up."

As many as 12,000 jobs could be lost, including 5,000 at the shipyard and 7,000 indirectly related to the shipyard, Vitter said. He blamed the problem in part on Obama.

"The Obama administration's cuts and delays in the shipbuilding budget seriously undermines the industrial base and its support of our national security interests," Vitter wrote in a July 13 letter to Mabus.

Navy Capt. Beci Breton, a spokeswoman for Mabus, said the secretary is open to meeting with Louisiana lawmakers.

"He has spoken to members of the Louisiana delegation as well as Gov. [Bobby] Jindal about Avondale in the past," she said.

But Breton said Mabus considers Northrop Grumman's plan an internal business decision.

"We'll stay engaged and monitor the developments with the goal of making sure we can execute our shipbuilding plan affordably," said Cmdr. Victor Chen, a Navy spokesman.

Mississippi lawmakers, meanwhile, welcome Northrop Grumman's move.

"We are gratified that Northrop Grumman has confidence in our diverse and experienced workforce in Pascagoula to provide even more shipbuilding for our national security," Sen. Roger Wicker, a Republican and member of the Senate Armed Services Committee, said in a statement.

Northrop Grumman is building several ships for the Navy in the Gulf Coast, including two guided missile destroyers, two amphibious assault ships and an amphibious helicopter carrier under construction in Mississippi, Chen said. The company is also building two amphibious assault ships in Avondale.

Northrop Grumman officials said the consolidation of operations in their Pascagoula facility would reduce costs and increase efficiency.

"This difficult but necessary decision will ensure long-term improvement in Gulf Coast program performance, cost competitiveness and quality," Wes Bush, Northrop Grumman's president and CEO, said in a statement earlier in the week.

Bush said the company will work with federal and state officials to help employees land other jobs. Some workers may work in the Mississippi plant, he said.

Louisiana lawmakers said the state's economy already has suffered major harm from the Gulf of Mexico oil spill, which has forced the closure of many businesses dependent on tourism or fishing.

Landrieu said state and federal officials have worked hard to support the Avondale shipyard.

"Despite that support and the increased productivity of the employees at Avondale, Northrop Grumman has tragically chosen to turn its back on Louisiana and thousands of workers in the state," Landrieu said in a statement.

[buglerbilly]

Northrop CEO Details Shipbuilding Decision

Jul 21, 2010



By Joseph C. Anselmo janselmo@aviationweek.com
FARNBOROUGH

Northrop Grumman’s decision to cast off its shipbuilding business is more about its lack of synergy with other units than its underperformance, CEO Wes Bush says.

“We see shipbuilding as a good business,” Bush tells Aviation Week editors. “There are a lot of folks who have said, ‘This means Northrop Grumman gave up on shipbuilding.’ And that is not where we are.”

Northrop announced last week that it would look at options to sell or spin-out its shipbuilding unit, which accounted for 17% of the U.S. defense giant’s sales last year. Bush, who has made improved performance and profitability his top goal since becoming CEO on Jan. 1, says the shipbuilding operation lacked synergy with the company’s aerospace, electronics, information systems and technical services businesses, which work together extensively. He maintains that whoever ends up owning the shipbuilding operation will be getting a viable business with a lot of upside.

Delays, quality problems and too much capacity in the shipbuilding market have resulted in big charges and sub-par profitability for the unit. But Bush sees great potential for whoever acquires it.

“It’s a solid business with a very good future,” he maintains. “Our business in particular has a value-creation opportunity, because while we have been able to pull the margin rates up a bit over the past couple of years we see more margin rate opportunity in front of us.”

Credit: Northrop Grumman

[buglerbilly]

Importance of U.S. Naval Shipbuilding Industrial Base


Mike Petters: “Our supplier community is critical to our success.”

Northrop Grumman Shipbuilding President Statement at Mid-Atlantic Supplier Event

06:35 GMT, August 13, 2010 PHILADELPHIA | Northrop Grumman Corporation held a shipbuilding supplier event here today to discuss the value of shipbuilding to the region, the current status of the shipbuilding industrial base, and some of the challenges ahead. Northrop Grumman corporate vice president and president of Northrop Grumman Shipbuilding Mike Petters addressed a gathering of over 100 people, representing many of the nearly 400 shipbuilding suppliers from the Mid-Atlantic region, including from eastern Pennsylvania, southern New Jersey, Delaware and northern Maryland. He discussed the importance of the naval shipbuilding supplier base, the future of shipbuilding and the implications of the U.S. Navy’s 30-year shipbuilding plan. This was the second of several planned supplier meetings to be held across the country in the coming months.

“Our supplier community is critical to our success and in fact, about one third of our cost to build these ships is spent outside of our gates,” said Petters. “Northrop Grumman Shipbuilding spends more than $2 billion annually for materials and services with the supply chain community. Of that, more than $713 million has been spent since 2008, through partnerships with nearly 400 different suppliers from Pennsylvania, New Jersey, Delaware and Maryland. So you can see, just by the numbers alone, that our suppliers are valuable members of the shipbuilding team and an important part of what we do to help our Navy to keep our country safe.”

“It’s our job to build the ships the Navy determines it needs to fulfill its missions in the most cost-efficient manner, meeting schedule commitments and incorporating high quality,” said Petters. “From the steel that is laid for the ship’s keel, to the thousands of valves and miles of pipe and cable that run throughout the ship’s structure, to the smallest bolt that holds together a sailor’s berth – you (our suppliers) are critical to the work we do.”

[buglerbilly]

Lawmakers: Shipbuilding Might Continue at Avondale

By CHRISTOPHER P. CAVAS

Published: 16 Sep 2010 22:13

Democratic members of Louisiana's congressional delegation believe they may have found a solution to keep the beleaguered Avondale shipyard near New Orleans in business.

"The Navy will make public tomorrow its plans to move up construction of double-hulled tankers from 2017 to 2014 and the guarantee that two LPD ships currently under construction at Avondale will be completed there," Sen. Mary Landrieu and Rep. Charlie Melancon said in a news release issued Sept. 16.

Northrop Grumman Corp. revealed in July its intention to close the Avondale yard and offer for sale all of its shipyards. Navy officials privately have supported the closure of the Avondale yard - smallest of the company's three major shipyards - as part of a series of solutions to improve Northrop's Gulf coast operations.

Northrop took that a step further with its announcement to shed itself of shipbuilding and concentrate on its electronics and communications businesses.

Avondale employs about 5,000 people in the hard-hit New Orleans area, which is still recovering from 2005's Hurricane Katrina and the subsequent flooding of the city.

Northrop builds LPD amphibious transport ships at the Avondale yard and its Ingalls facility at Pascagoula, Miss. Northrop leadership pledged in its July declarations to complete the ships at Avondale rather than have them towed to Ingalls.

The Navy is planning to build new double-hulled tankers but has yet to put the T-AO(X) program up for bids. Rear Adm. Mark Buzby, head of the Navy's Military Sealift Command, writing in the September issue of MSC's monthly newsletter, said the Navy "will go forward with an accelerated funding profile to start building these ships four years earlier than planned."

There is no guarantee Avondale would win the T-AO(X) contract, as the General Dynamics-owned National Steel and Shipbuilding Company in San Diego also is expected to bid on the program. The ships also are seen as key to that shipyard's future.

Landrieu and Melancon said in a joint letter the chance to bid on the tanker contract would make Avondale "more attractive to prospective new shipbuilding buyers." They acknowledged they didn't yet have all the answers.

"While today's announcement is not a silver bullet, it is a small step in the direction of making Avondale viable years into the future," they wrote.

Politics could also be afoot, as they normally are with jobs programs. While Landrieu is not up for re-election, Melancon is in a race with incumbent Republican David Vitter for Louisiana's other Senate seat. A Rasmussen poll in late August showed Melancon training Vitter by 54 percent to 33 percent - a margin which has remained somewhat steady throughout this year. Even a recent Democratic poll had Melancon trailing Vitter by 10 points.

Navy officials announced a news conference for early Sept. 17, although they have not disclosed the subject matter.

[buglerbilly]

Buyer Emerges for Northrop Yards

Next Step: Proving Financial, Operational Credibility

By CHRISTOPHER P. CAVAS

Published: 3 Oct 2010 11:28

A small group of engineers and financiers previously known for promoting a low-cost class of new fleet oilers has emerged as the first publicly acknowledged bidders for the Northrop Grumman shipyard empire.


Northrop announced July 13 its intention to sell or close its Avondale yard in Louisiana and offer the Newport News yard in Virginia and Ingalls yard in Mississippi as a package deal. (Northrop Grumman)

A small group of engineers and financiers previously known for promoting a low-cost class of new fleet oilers has emerged as the first publicly acknowledged bidders for the Northrop Grumman shipyard empire.

"We're offering them a one-step solution for all the shipyards," Ed Bartlett, president and CEO of Cleveland Ship, said Sept. 28

"We've been under the radar, and we've decided that now's the appropriate time to let the defense community and the capital markets know what we're up to."

Remainder of article can be seen here...............

http://www.defensenews.com/story.php?i=4827084&c=AME&s=SEA

[buglerbilly]

Northrop Files Papers for Shipyard Divestiture

By CHRISTOPHER P. CAVAS

Published: 15 Oct 2010 11:46

Moving ahead with the paperwork necessary to divest itself of its shipbuilding operations, Northrop Grumman announced Oct. 15 it had filed a Form 10 registration statement with the federal government.


Northrop Grumman announced July 13 its intention to sell or close its Avondale yard in Louisiana by 2013 and offer the Newport News yard in Virginia and the Ingalls yard in Mississippi as a package deal. (Steve Blount / Northrop Grumman)

The document, which outlines financial information, company structure and risks - information important to potential investors - is required by the Securities and Exchange Commission for the company to spin off or sell its shipbuilding unit.

"Today's filing is the initial step toward executing a potential spin-off," Northrop said in a statement.

Remainder of article can be seen here...............

http://www.defensenews.com/story.php?i=4911629&c=AME&s=SEA

[buglerbilly]

Navy Supports Northrop Grumman Corp. Shipbuilding Spin-Off

(Source: US Department of Defense; issued March 17, 2011)

The Department of the Navy announced that it is now in a position to support Northrop Grumman Corporation’s (NGC) spin-off of its shipbuilding business. The Navy finds Huntington Ingalls Industries Inc. (HII) responsible for award of amphibious transport dock ship LPD 26 and guided missile destroyer DDG 113, both contracts currently under negotiation with NGC.

“NGC has cooperated with the Navy in working through the complex issues related to its potential spin-off of its shipbuilding business to HII,” said Sean Stackley, assistant secretary of the Navy for research, development and acquisition. “Our support of the spin-off is based on a critical review of HII’s proposed capital structure, current contract financials, required capital investment and proprietary forward-looking projections. Ultimately, with appropriate adjustments made by NGC as a result of the Navy’s findings and captured within an agreement between NGC and the Navy, we have been able to resolve our concerns about the risk involved to this important segment of our shipbuilding industrial base.”

The Navy’s concern with HII’s credit rating, driven by its initial debt, has been offset by NGC’s agreement to relieve HII of first quarter 2011 debts, to provide a starting cash balance of $300 million, and not to recoup retentions, performance incentives, and economic price adjustment payments that the Navy might owe under current shipbuilding contracts with Northrop Grumman Ship Building from HII.

“The Navy evaluated the extent of considerations made by NGC as appropriately addressing the risk of this spin to Navy shipbuilding” said Stackley. “The Navy regards HII as a responsible contractor and is proceeding to finalize the negotiations with the intent to award the contracts for construction of LPD 26 and DDG 113 to HII.”

-ends-

[buglerbilly]

Largest U.S. Military Shipbuilder Begins Independent Operations



Northrop Grumman-spinoff HII to better align with US Navy priorities.

New, Publicly Traded Company under the Name of Huntington Ingalls Industries

05:25 GMT, April 1, 2011 NEWPORT NEWS, Va. | Huntington Ingalls Industries, Inc. has begun operating as a new, independent and publicly traded company as trading of its shares commenced yesterday morning. Huntington Ingalls Industries, America’s largest military shipbuilder, was previously a business sector of Northrop Grumman until effectively separating on March 31, 2011, in a spinoff.

“Our strategy,” said Mike Petters, president and CEO of Huntington Ingalls Industries, “is to better align our business with the U.S. Navy’s priorities and to continue improving our shipbuilding performance while meeting our customer commitments. Operating as an independent company will allow us greater focus and agility to accomplish these important objectives, which should create significant value for our shareholders.”

The Huntington Ingalls Industries name reflects the long-standing legacies of the two shipbuilding business divisions of the new entity: Newport News Shipbuilding and Ingalls Shipbuilding. Collis P. Huntington founded Newport News Shipbuilding in 1886, and Ingalls Shipbuilding was established in 1938 by the Ingalls Iron Works of Birmingham, Ala., a company founded by the Ingalls family.

“Incorporating the names of our founding families and legacy companies into our new enterprise will build upon our 125-year tradition of demonstrated commitment to quality, customer focus and building the best military ships in the world,” Petters said. “I am very excited about our future, about the strength and depth of our leadership team, and the skill and dedication of our shipbuilders.”

Work today at Huntington Ingalls includes the construction of the Gerald R. Ford-class aircraft carriers, the refueling and complex overhaul of Nimitz-class aircraft carriers, construction of Virginia-class submarines, submarine design and life-cycle management, as well as fleet services for naval ships all over the world. The company is also constructing San Antonio-class amphibious transport dock ships and an America-class multipurpose amphibious assault ship and has built 28 of 62 Arleigh Burke-class destroyers with long-lead materials awarded on the first two ships in the continuation of the program. Recently, the company was awarded a fourth National Security Cutter construction contract for the U.S. Coast Guard, with the third ship expected to be complete by year’s end.

Northrop Grumman Corporation

Company or Organisation Portrait:

Huntington Ingalls Industries (HII) (NYSE:HII) designs, builds and maintains nuclear and non-nuclear ships for the U.S. Navy and Coast Guard and provides after-market services for military ships around the globe. For more than a century, HII has built more ships in more ship classes than any other U.S. naval shipbuilder. Employing nearly 38,000 in Virginia, Mississippi, Louisiana and California, its primary business divisions are Newport News Shipbuilding and Ingalls Shipbuilding.

[buglerbilly]

Huntington Ingalls Industries Announces Senior Leadership Team for Newport News Shipbuilding

07:54 GMT, April 7, 2011

NEWPORT NEWS, Va. | Huntington Ingalls Industries, Inc. announced yesterday the senior leadership for its Newport News Shipbuilding division (NNS). HII, previously known as Northrop Grumman Shipbuilding, began operating last week as an independent, publicly traded company after being spun off from Northrop Grumman Corp.

Newport News Shipbuilding is led by Matt Mulherin, who serves as corporate vice president and general manager. Mulherin announced the following promotions in support of the new company.

Bill Bell has been promoted to vice president of human resources and administration. His responsibilities include compensation, health and welfare, employee and labor relations, learning and development, recruiting, community relations, and equal employment opportunity and diversity. He began his career with the shipyard in 1986 and has held increasingly responsible positions, including director of human resources, director of security, director of business development, director of international marketing and associate general counsel. Bell graduated from the company's Apprentice School as a marine designer. He also earned business and marketing degrees from Christopher Newport University and a law degree from the College of William and Mary's Marshall-Wythe School of Law.

Brian Fields has been promoted to vice president of supply chain management. He leads all supply chain functions, including sourcing and procurement, logistics and inventory control, and material operations in support of all of the division's contracts and clients throughout the design, construction, operation, overhaul and repair of naval vessels. Previously, he served as director of the Gerald R. Ford aircraft carrier construction program, where he was responsible for managing ship design, manufacturing and construction efforts, overseeing the budget, schedule, technical details and contract performance. Fields began his career with the company in 1990 as a test engineer in the Los Angeles-class submarine construction program. He has a bachelor's degree in mechanical engineering from Auburn University and an M.B.A. from the College of William and Mary.

Jim Gildea has been promoted to vice president and division counsel of Newport News Shipbuilding. He provides legal advice and counsel, in coordination with the corporate vice president and general counsel, to senior management and oversees and coordinates the provision of legal advice to Newport News Shipbuilding. He also provides and oversees the provision of legal support for the company's governance and compliance programs, policies and procedures. Gildea began his career with the shipyard in 1995, specializing in government and commercial contracting. He earned a bachelor's degree in engineering from the United States Military Academy in 1978 and a juris doctor degree from Georgetown University in 1984. Before joining the shipyard, he served as a procurement attorney for a number of Army installations and commands before entering private practice, where he represented major defense contractors on contract and litigation matters.

Michael Helpinstill has been promoted to vice president and controller and has responsibility for accounting and financial compliance, financial planning and reporting, rates and budgets, program financial control, government financial liaison, and earned value management. Prior to his promotion, Helpinstill served as director and assistant controller for NNS. Since joining the shipyard in 1996, he has held leadership positions in a number of finance and business management functions, including serving as chief financial officer for HII's subsidiary AMSEC LLC and business manager for Newport News Shipbuilding's aircraft carrier construction, refueling and overhaul programs. He earned a bachelor's degree in economics from Bucknell University and an M.B.A from the University of Virginia.

Carolyn Pittman has been promoted to vice president and chief financial officer and is responsible for Newport News Shipbuilding's business management functions, including accounting, financial reporting and planning, analysis, rates and budgets, and program cost control. Pittman comes to the shipyard from Northrop Grumman's Enterprise Shared Services organization, where she served as vice president and chief financial officer. Since joining Northrop Grumman in 1995, she has held a number of leadership positions, including vice president and controller of Northrop Grumman's Integrated Systems sector and vice president of internal audit for the corporation. Pittman has a bachelor's degree in accounting/data processing from the University of Arkansas and an M.B.A. in finance from Dallas Baptist University. She is a certified public accountant and is a member of Financial Executives International.

"These appointments reflect the knowledge, leadership and experience these individuals bring to their respective positions," Mulherin said. "They join a team dedicated to improving performance and meeting commitments—most notably in the areas of safety, quality, cost and schedule—and continuing our 125-year legacy of building the best ships in the world."

The other members of the Newport News Shipbuilding senior leadership team, all having previously served on the Northrop Grumman Shipbuilding senior team, are:

• Rolf Bartschi, vice president, CVN 78 carrier construction
• Jennifer Boykin, vice president, quality and process excellence
• Jennifer Dellapenta, director, communications
• Pete Diakun, vice president and chief technology officer
• Barry Fletcher, vice president, nuclear engineering
• Jim Hughes, vice president, in-service aircraft carriers
• Danny Hunley, vice president, operations
• Tom Johnston, vice president, contracts and pricing
• Leni Kaufman, vice president and chief information officer
• Ken Mahler, vice president, Navy programs
• Mike Shawcross, vice president, Ford-class engineering and CVN 79 construction
• Becky Stewart, vice president, submarines and fleet support
• Doug Stitzel, vice president, energy programs