(Jackson-AP) -- Northrop Grumman Corporation has canceled its project to build the first cruise ships in America in more than 40 years.
The company said today it was unable to reach an agreement with the U.S. Maritime Administration to finish building the ships at the Ingalls shipyard in Pascagoula.
Company spokesman Randy Belote says the unfinished ship will be moved out of the production area because it's tying up space. He says officials are considering what to do with the it and how to shut down the remainder of the program.
Ending construction affected 1,250 workers, but a union official says nearly all of them will have another job at Ingalls or another Northrop yard.
The Los Angeles-based defense contractor suspended work last week on the two passenger cruise ships it was building for American Classic Voyages Incorporated, which has filed for bankruptcy protection. The move came after the Maritime Administration decided to end its guarantee of $1 billion in loans for the project.
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