Wednesday, July 14, 2010

Avondale to Close

Posted By on Wed, Jul 14, 2010 at 2:35 PM

In another body blow to the New Orleans economy, Northrop Grumman announced yesterday it has decided to move all its Gulf Coast shipbuilding operations to Pascagoula, Miss. when current construction projects at Avondale are completed in 2013. That means the 5,000 people who now work at Avondale will have to find new jobs. Another estimated 7,000 jobs also depend on the shipyard.

From Northrop Grumman’s perspective, it’s just good business to consolidate operations for the sake of efficiency and the bottom line. The company said it further plans to separate shipbuilding from its other enterprises. “Recognizing our company’s long-term strategic priorities, we foresee little synergy between shipbuilding and our other businesses,” says Wes Bush, CEO and president of Northrop Grumman. “It is now appropriate to explore separating shipbuilding from Northrop Grumman.”

Rep. Anh “Joseph” Cao, R-La., says he will try to keep the 5,000 jobs in the New Orleans area. “Taking away thousands of shipbuilding jobs in an area known worldwide for its shipbuilding is a real blow to us,” he said in a statement. “This couldn’t have come at a worse time because we are still dealing with the effects of (Hurricane) Katrina and, now, the economically debilitating effects of the oil spill. … We have real possibilities for bridging the funding gaps. This isn’t the end for these jobs, and I will continue to fight to keep them here in Southeast Louisiana.”

Sen. Mary Landrieu, D-La., vows she will try to get company officials to reverse the decision “to turn its back on Louisiana and the thousands of workers in the state,” she says. “While the company might believe this decision will have a positive effect in the short term on its bottom line, the long-term consequences for Louisiana’s economy, our national security and Northrop Grumman itself will be devastating.”

Northrop Grumman says it only has two transport ships to be built at Avondale by 2013 under current contracts. In February, the Navy canceled plans for two amphibious ships that were to be built at Avondale. With declining contracts for seagoing vessels, Northrop Grumman says it may get out of shipbuilding altogether.

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