That could allow General
Dynamics to make a move to buy
the Newport yard, McAleese said.
An acquisition by General
Dynamics “would generate the
greatest potential for future cost
savings if handled correctly. It
would, however, cement a dominant position for them that the
Navy may find untenable,” said
Kutler. “The real issue would be
for the Navy. It becomes a major
strategic and industrial-base decision” to allow General Dynamics
to be the only maker of submarines
and aircraft carriers, he said.
However, nothing can happen
without a Justice Department and
Pentagon accord to let General
Dynamics vie once more for the
“General Dynamics is going to win no matter what,”
said McAleese. “If there is an auction, they can get
involved, or do nothing and allow the organization to
atrophy over time because there is not going to be a
corporate parent to protect it.”
General Dynamics declined to comment on whether
it has any potential interest in acquiring Newport News.
The Navy will continue to monitor Northrop
Grumman’s decision and internally look at how it
might impact the service’s ability to “affordably” exe-
cute its shipbuilding plans, said Cmdr. Victor Chen, a
service spokesman. He added that having adequate
competition in the industrial base “is important.”
Of more immediate impact to the shipbuilding indus-
trial base is Northrop’s decision to close its Avondale ship-
yard in early 2013. The move is creating a political storm
in Louisiana, a state already battered by a slew of disasters.
Bush said the decision to close the Louisiana yard
was made with the goal of improving efficiency and
addressing the problem of excess shipbuilding capacity.
Avondale lacked orders after 2012 and will close
after it completes work on two Navy San Antonio-class
amphibious transport dock (LPD)ships. The company
will transfer the work on any remaining LPDs to its
yard in Pascagoula, Miss.
The Avondale yard is one of the largest employers in
the region, with about 5,000 workers. State officials
also estimate that the shipyard supports about 6,500
indirect jobs in the New Orleans region, making the
impact of the closure even more dramatic.
Louisiana’s politicians already are struggling to create jobs in a state reeling from the Deepwater Horizon
oil spill that hit oil and fishing industries hard over the
Northrop Grumman Ship Systems accomplished the pressure hull complete
milestone, signifying the hull sections had been joined to form a single unit, on
the Virginia-class submarine California May 10 at its Newport News, Va., ship-
yard. General Dynamics Corp. is the only other shipbuilder in the United States
with the specialized expertise for nuclear submarine work.
summer. The region also is still recovering from 2005’s
Democratic U.S. Sen. Mary Landrieu, Republican
Gov. Bobby Jindal and other members of the state’s
political delegation have vowed to do everything possible to keep the Avondale yard open, including pressing the secretary of the Navy and the Pentagon to intervene in Northrop’s decision.
The loss of the more than 11,000 positions amounts to
about $660 million in labor income and almost $2 billion
in economic output that helps fuel the Gulf Coast economy, Landrieu wrote July 15 to Navy Secretary Ray Mabus.
Landrieu warned Mabus that the “integrity of our
maritime manufacturing will be in jeopardy. … If the
Navy allows Avondale to close, the U.S. will have only
one major shipyard along the Gulf Coast: Northrop
Grumman’s yard in Pascagoula.”
In her letter, Landrieu, a member of the Senate
Appropriations Committee, suggested that the Navy
keep Avondale open to build double-hulled tankers to
replace the service’s outdated fleet oilers. Under
International Maritime Organization rules, tankers
need to have double hulls. The Navy’s oilers currently
have single hulls and operate under a waiver.
“The 30-Year Shipbuilding Plan would not remedy
this problem until 2017. That is too long to wait,”
Landrieu wrote. “The recent oil spill in the Gulf high-
lights the damage that can occur from oil pollution.
The United States Navy should be leading the world,
not bringing up the rear when it comes to the safety
and environmental integrity of our Navy fleet.”
Bush said that the company is committed to spend-
ing the next couple of years working with state officials
to find alternative uses for Avondale. ■
SEAPOWER / SEPTEMBER 2010