PASCAGOULA, MS (WLOX) - Northrop Grumman CEO Web Bush says now is the right time to explore whether it makes good financial sense for shareholders to sell its shipbuilding business. Bush announced the strategic alternative during a morning conference call.
Step one in that process is to consolidate the company's gulf coast shipyards. So by 2013, Northrop Grumman will close its three Louisiana facilities. Those operations will be relocated to Mississippi. According Bush, "We think Pascagoula is ready to take this on."
Once the consolidation is complete, Northrop Grumman will have shipyards in Pascagoula, Gulfport, and Newport News, Virginia. Consequently, Bush says the shipbuilding sector will have a "smaller, leaner, healthier industrial base."
The Los Angeles-based defense contractor said Tuesday that it will close the Avondale yard - with 5,000 employees - after work is finished on two Navy amphibious assault ships. The last two ships in the LPD-17 series will be constructed at the Northrop Grumman yard in Pascagoula.
The company says it expects productivity losses at Avondale as the result of the decision. Northrop Grumman has raised the estimates to complete two LPDs currently under construction at Avondale by $210 million.
Northrop Grumman is a diversified company, with interests in aerospace, electronics, information systems and shipbuilding. No matter what happens to Northrop Grumman's shipbuilding sector, Bush says one thing is certain. Mississippi's shipyards will remain a "viable and sustainable business."
WLOX and WLOX.com will have more on what all this means for the Pascagoula shipyard throughout the afternoon.
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