Ohio co. seeks to buy Northrop Grumman shipyards

AP News
Posted: Oct 15, 2010 7:31 PM
Ohio co. seeks to buy Northrop Grumman shipyards

An Ohio company has written governors in three Southern states in a push to purchase the military shipbuilding division of Northrop Grumman Corp., pledging to keep a major Louisiana shipyard open.

Cleveland Ship LLC sent letters this week through its Cleveland Shipbuilding Division to Govs. Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Bob McDonnell of Virginia

Northrop Grumman Corp. announced plans on July 13 to shutter the Avondale shipyard near New Orleans in early 2013 and consolidate its Gulf Coast military shipbuilding at Pascagoula, Miss. About 4,600 people now work at Avondale.

Also Friday, Northrop Grumman said it took an initial step toward creating a potential spinoff of its Northrop Grumman Ship Systems with a federal securities registration for a separate shipbuilding company.

The company said it "continues to explore various alternatives for the potential separation of its shipbuilding business, including a spinoff or sale of the unit."

Cleveland Ship hasn't said what it would be willing to pay for the military shipbuilding division, and Northrop Grumman has declined comment on the company's interest.

The letters cover Northrop Grumman yards at Avondale, Pascagoula and Newport News, Va.

In the letter to Jindal, Cleveland Ship said it is committed to a full-scale commercial and naval shipyard at Avondale, employing about 5,000 people. The company said it is seeking federal authorization to build ships for the Navy called fleet oilers, which transport fuel and freight to ships at sea.

Cleveland Ship also said it has been contacted by a wind energy company about partnering in the production of offshore wind energy platforms that could be built at Avondale.

Avondale is building two ships in the Navy's series of amphibious assault vessels. Northrop Grumman said it will close the yard once work is complete.

In the letter to Barbour, Cleveland Ship said the priority would be to finish contract negotiations for about $5 billion of work for the Navy and Coast Guard at the Pascagoula yard.

The company told McDonnell that it does not foresee "any significant changes" at the Newport News yard.

"Our strategic intent is to own these shipyards `for the long term' and not to resell them in a relatively short time," the letters stated.

Jindal's office didn't respond to calls for comment, but Louisiana Economic Development Secretary Stephen Moret said in an e-mail statement that "securing the future of Avondale and its workforce" is one of the state's top economic priorities.

"The Avondale site is likely to attract significant interest from a variety of large, well-capitalized companies that have the potential to retain and/or create a large amount of jobs there," he said. "LED is actively engaged with multiple federal partners and local stakeholders to design and implement a long-term solution for Avondale. We will continue to work to secure the best possible outcome for Avondale and its workforce."

Barbour's spokeswoman, Laura Hipp, said Cleveland Ship officials met with the Mississippi Development Authority on Tuesday. McDonnell's spokeswoman, Stacey Johnson, said the governor's office received the letter Friday and was reviewing it.



Northrop Grumman Shipbuilding: http://www.sb.northropgrumman.com/

Cleveland Ship LLC: http://clevelandship.com/