DECEMBER 2006

Gulf Coast shipyards see boom, despite labor shortage
NEW ORLEANS, La. – Although a persistent labor shortage has increased the time and
cost associated with building a ship on the Gulf Coast, local shipbuilders say they’re
having little difficulty landing and retaining contracts. Strong oil and gas prices and
consistent defense spending are making it easier for customers to absorb pass-along
labor costs, executives said. “It’s an unusual time in the industry, but I think it’s a
wonderful time because things are going well,” said Donald “Boysie” Bollinger, chief
executive of Bollinger Shipyards. “I’m hopeful the industry keeps the demand up. Every
indication is that the strong demand will continue.” Still, it remains to be seen if the current
boom can continue to support the industry through what could be a decade-long Gulf
Coast recovery. At least one executive said that if the housing shortage and labor
shortage persists, his company could reduce its local footprint. More than a year after
Hurricane Katrina exacerbated an already tight labor market for shipbuilders by
obliterating housing and increasing competition with other industries for welders,
pipefitters and electricians, the labor shortage has not eased. “Certainly there is a limited
work force,” said Phil Teel, president of Pascagoula-based Northrop Grumman's Ship
Systems. “The primary issue is housing for workers.” Shipbuilders have found ways to
cope, some bringing in workers from as far away as Tampa, some using foreign nationals
or outsourcing some work. (
Source: New Orleans Times Picayune, 12/03/06)

NOVEMBER 2006

VT Halter Marine gets contract increase
PASCAGOULA, Miss. – VT Halter Marine in Pascagoula announced a $165 million
increase on a contract the shipbuilder has with the Navy for building three Fast Missile
Craft ships to help the Egyptian government secure its coastline. The U.S. Navy, which will
sell the ships to the Egyptian Navy, gave VT Halter Marine the increase so the shipbuilder
can order parts such as engines, transmissions and weapons systems, which the
Pascagoula company doesn't manufacture. The 200-foot-long ships will have modern
weapons that give them anti-aircraft, anti-surface and electronic warfare capabilities. The
ships will protect the Egyptian shoreline from terror and threats to the shipping industry.
The announcement is a modification of a $28.8 million contract awarded to VT Halter for
designing the first phase of the project in November. The total project is valued at just
over $450 million. The Fast Missile Craft, which takes about two years to build, will be sold
to Egypt under the U.S. government's foreign sales program. VT Marine, a subsidiary of
VT Solutions, designs and builds several types of patrol vessels, oil cargo vessels and
ferries, among others. VT Halter Marine's Jackson County operations are in Pascagoula,
Moss Point and Escatawpa. (
Source: The Sun Herald, 11/22/06)

Austal secures $106 million contract
MOBILE, Ala. – Austal Ltd. has secured a contract worth about $106.7 million with an
unidentified group to build multiple aluminum passenger ferries, its chairman, John
Rothwell, told an Australian business newspaper. The deal also reportedly includes the
option of further purchases. Austal Ltd. is the parent company of Mobile-based Austal
USA , which is building both ferries and U.S. Navy ships in its yard on the Mobile River.
Rothwell reportedly said the new ships would be built in Australia and were due for a
staggered delivery in 2007 and early 2008. (
Source: Mobile Press-Register, 11/18/06)

Silver Ships expanding
MOBILE, Ala. – Silver Ships Inc. is expanding its Theodore shipyard for the second time in
two years to support its work refurbishing aluminum boats for the Army. The company,
founded in 1985, said it will spend $570,000 to construct an 8,500-square-foot boat
inspection building and add 10 full-time jobs at an average salary of $39,000. Silver
Ships, which currently employs 40 workers, works as a subcontractor for FBM Babcock
Marine Ltd. to upgrade bridge-building boats for the Army. It also builds customized
aluminum work boats at its headquarters on Bellingrath Road. The Industrial Development
Authority of Mobile County on Thursday approved a $28,906 package of tax breaks tied
to the expansion. The package includes a waiver of noneducational sales and use taxes
worth $13,375 and a 10-year waiver on property taxes worth an estimated $15,531. The
company in September completed an $850,000 project to add a 20,000-square-foot
production building. (
Source: Mobile Press-Register, 11/17/06)

Northrop Grumman awarded $1.4 billion contract
Northrop Grumman Corp., the world’s largest builder of warships, has been awarded a
$1.4 billion contract modification from the U.S. Navy that will allow construction of one
Amphibious Transport Dock ship (LPD-24) and secure materials and labor for another
(LPD-25), according to the office of Sen. Trent Lott, R-Miss. The work will be performed at
Northrop Grumman's Ingalls Operations in Pascagoula and at the company's Avondale
yard in New Orleans, Lott said. Northrop Grumman said the 684-foot ships can carry up to
800 troops, plus vehicles including landing craft or aircraft. Congress has capped the cost
of the San Antonio class of amphibious ships at an average of $1.64 billion apiece. The
Northrop-built USS San Antonio (LPD-17) was commissioned earlier this year. Last month,
the New Orleans (LPD-18) left the Avondale yard for sea trials. The company expects to
deliver the ship to the Navy early next year. The company has five more ships at various
stages of construction or prefabrication at its Gulf Coast shipyards. (
Source: Mobile
Press-Register, New Orleans Times-Picayune, 11/07/06)

OCTOBER 2006

Austal USA announces expansion
MOBILE, Ala. – Austal USA on Tuesday revealed a multimillion-dollar expansion plan that
includes adding a pair of 18,000-square-foot buildings at its site on the Mobile River and
finding land on which to build a new facility. John Rothwell, founder and executive
chairman of parent company Austal Ltd., told shareholders during the company's annual
meeting Monday that he expected employment at the Mobile operation to increase by
about a third as a result of the expansion. Austal USA now has about 750 workers. The
company plans to add its first two-story building just north of its most northern shed,
planning office space on top and shipbuilding space on the bottom. The project is valued
at between $2 million and $3 million. Austal plans to have the building completed in about
eight months. The new facility will likely be larger than the current operation. Austal hopes
to start work on the new facility before the middle of 2007. It will allow Austal to expand its
production of modular ship components. Austal USA is the shipbuilder for a contracting
team led by General Dynamics that is building one Littoral Combat Ship. The Navy
ultimately hopes to build a total of 55 LCS vessels. Austal USA opened in 2001 as a
partnership between Austal Ltd. of Perth, Australia, and Bender Shipbuilding & Repair Co.
in Mobile. On Sept. 19, Austal bought out Bender's 30 percent stake in the company for a
deal worth a reported $20.6 million. (
Source: Mobile Press-Register, 10/18/06)

Austal executive returning to Australia
MOBILE, Ala. – Austal USA Chief Executive Officer Greg Metcalf will return in the next
several weeks to his native Australia to join the management ranks of parent company
Austal Ltd. Dan Spiegel, chief operating officer of Austal USA, will fill the CEO duties at the
Mobile operation, but retain his COO title, said Bill Pfister, Austal's vice president of
government programs. (
Source: Mobile Press-Register, 10/18/06)

Bill allows Navy to split funding of ships
NEW ORLEANS, La. – A $447.6 billion defense spending bill signed into law by President
Bush allows the Navy to split funding for a new class of destroyer in a way that brings work
to all of the contractor's Gulf Coast yards. The bill includes $11 billion for shipbuilding
projects, $2.6 billion of which is earmarked for the construction of two DDG-1000, formerly
called DD(X). The vessels are a new type being developed and built by Northrop's
Pascagoula yard and General Dynamics' Bath Iron Works shipyard in Maine. The Navy
began splitting shipbuilding contract work between companies several years ago in an
effort to keep them in business. But there had been concern that Congress would only
allow for the funding of one of the $2.5 billion ships at a time, leaving one shipyard with no
work. The fiscal plan allows for the Navy to pay for half of the construction of each ship
this year and half next year. Without that allowance, construction could have started on
just one ship. Northrop Grumman spokesman Brian Cullin said the Pascagoula yard will
begin work on the ship in 2008. While the vessel will be constructed in Pascagoula, work
on the project will stretch to the Avondale and Gulfport yards. The Gulfport yard will build
a composite deckhouse for the ship, while the Avondale site will cut steel and build units
for it and other ships. (
Source: New Orleans Times-Picayune, 10/08/06)

Two Mobile yards land contracts
MOBILE, Ala. – Two Mobile shipyards have landed new contracts, one to retrofit a
container vessel to ship vehicles to Hawaii, and the other to build an aluminum work boat
for the U.S. Navy. Atlantic Marine Alabama LLC signed a $17 million contract with Matson
Navigation Co. Inc. to retrofit an automobile container ship. Silver Ships Inc. in Theodore
has an $882,773 contract to build a 58-foot aluminum ship for Naval Systems Sea
Command. (
Source: The Mobile Press-Register, 10/05/06)

UNO to develop high tech shipbuilding tools
NEW ORLEANS, La. – The University of New Orleans received a $3.6 million grant from
the Defense Advanced Research Projects agency last week to develop automated tools
for programming robots to weld ship components. The grant is funded by the Office of
Naval Research. “The shipbuilding industry can never find enough welders, and welding is
a core competence of shipbuilding,” said Frank Bordelon, executive director of the UNO
Gulf Coast Region Maritime Technology Center and the principal investigator for the
grant. Much of the work will take place at the UNO Maritime Technology Center of
Excellence at Northrop Grumman Ship Systems Avondale Operation. “U.S. shipbuilding
needs this technology for increased productivity and quality," said Russell Trahan, dean
of the UNO College of Engineering. Robots have been used in automobile manufacturing
for years, he said, but the mass production methods of automakers do not work in
shipyards. UNO will work with Sandia National Labs in New Mexico and Spatial
Corporation, a Colorado-based industrial software business that specializes in three-
dimensional models, as well as several major shipyards to improve current technology,
Trahan said. UNO plans to take on a commercialization partner, a company that will take
the new tools and market them throughout the industry, Bordelon said. To meet that goal,
the institution has formed a Technology Advisory Board which includes about 20
shipyards and 10 vendors, he said. UNO expects to be doing demonstrations for the
industry in about 10 months. (
Source: The Louisiana Weekly, 10/02/06)

SEPTEMBER 2006

VT Halter Marine awarded $200 million contract
PASCAGOULA, Miss. – VT Halter Marine Inc. of Pascagoula was awarded a $200 million U.
S. Navy contract Tuesday to build the T-AGM(R), the new Navy construction ship that will
carry the next-generation radar to collect data on ballistic missiles in flight. The Cobra
Judy replacement program will allow retirement of the current U.S. Naval Ship Observation
Island, which is scheduled to leave service no later than 2012. "This is an important ship
that will service a major transition which will significantly upgrade America's missile
defense capability," said Sen. Trent Lott. "To support this critical mission, the Navy has
chosen Mississippi's skilled shipbuilding workers for execution of this contract, again
demonstrating its confidence in our shipyards and affirming the dramatic progress
Mississippi has made in our Hurricane Katrina recovery." The 700-foot vessel will be
capable of using all current T-AGM 23 Observation Island facilities and ports. It will be
capable of performing its mission in waves as high as 13 feet, and surviving in wave
heights as high as 26 feet. T-AGM(R) will carry up to 88 crew members. Pascagoula-
based VT Halter Marine, a subsidiary of Vision Technologies Systems Inc., designs, builds
and repairs oceangoing vessels. It has operations in Pascagoula, Moss Point and
Escatawpa. Vision Technologies Systems, based in Alexandria, Va., specializes in
aerospace, electronics, land and marine systems. It's a wholly owned subsidiary of
Singapore Technologies Engineering. Singapore Technologies operates in five business
areas: engineering, technology, infrastructure and logistics, property, and financial
services. The government of Singapore, through its Temasek Holdings unit, controls the
company. (
Source: Sun Herald 09/27/06)

Stennis Space Center gets new anti-sub warfare center
STENNIS SPACE CENTER, Miss. - A new Oceanography Anti-Submarine Warfare Center
was established at Stennis Space Center on Friday, said a Naval Meteorology and
Oceanography Command spokesperson. The center's first commanding officer is Cmdr.
John Van Gurley, who will oversee about 35 personnel at Stennis with another 60 people
in the field, said Cathy Willis, public affairs officer. The center will support anti-submarine
operations by providing access to the various services and experts in the Naval
Oceanographic Office at Stennis, Willis said. "The way we deliver oceanography now is
we have what we call reach-back support," Willis said. "They facilitate getting information
into the hands of people who are forward. There are actually a number of detachments,
from Maine to Hawaii, who work under the center here." The center reports to the Naval
Oceanography Operations Command, a subordinate of the Commander, Naval
Meteorology and Oceanography Command, the release stated. (
Source: The Sun
Herald, 09/25/06)

Bender, Trico Marine strike deal
MOBILE, Ala. – Bender Shipbuilding & Repair Co. Inc. has struck a deal with Trico Marine
Services Inc. to build a pair of 210-foot offshore supply ships. Trico valued the deal at $35
million. Construction will start at Bender's Mobile shipyard during the first quarter of next
year, and should add 75 to 100 employees to Bender's current staff of 850, said Frank
Terrell Jr., vice president of sales and marketing. Terrell said the recent discovery by
Chevron Corp. and its partners of a major new petroleum pool under deep waters in the
Gulf of Mexico will likely lead to additional, similar jobs for Bender. The vessels are
scheduled for delivery in March and July 2008. Trico, based in Houston, provides marine
support vessels used offshore by the oil and gas industry. Bender, a private company,
last week sold its 30 percent share in Mobile shipyard Austal USA for a reported $20.6
million. (
Source: Mobile Press Register, 09/21/06)

JUNE 2006

Navy projects in Mississippi listed in authorization bill
WASHINGTON, D.C. – South Mississippi aerospace projects are listed in the fiscal year
2007 defense authorization bill passed Thursday, according to Sen. Trent Lott, R-Miss.
The bill outlines what projects Congress intends to fund next fiscal year, and to what
extent. The bill includes $493.2 million for procurement of five Global Hawk UAVs. Global
Hawks will be assembled at Northrop Grumman’s Unmanned System Center in Moss Point.
The bill also includes $116 million for testing and integration of Fire Scout UAVs for the
Navy. Fire Scouts are built at the Northrop facility in Moss Point. Other aviation-related
projects included in the bill: $8.2 million to upgrade Special Operations Forces Combatant
Craft Systems at United States Marine in Gulfport; $3 million for aircraft carrier propellers
built by Rolls-Royce Naval Marine in Pascagoula; $1.3 million for 13 C-130 aircraft for the
Navy and Air Force. The fuselages are built by Lockheed Martin in Meridian. Also
included is $20 million for Miltec in Iuka and Oxford for continued research into integration
of the advanced hypersonic weapons vehicle. (
Source: release, Sen. Trent Lott,
06/23/06)

MAY 2006

Austal awarded contract
MOBILE, Ala. - Austal Hull 130 Chartering, LLC, Mobile, Ala., is being awarded a $13.4
million firm-fixed-priced, reimbursables contract for the charter of high speed vessel MV
Westpac Express. This charter is a passenger/cargo vesselthat will be operated to
transport Okinawa-based Marine Corps' Third Marine Expeditionary Force and their
equipment. This contract includes four one-year options, which if exercised, would bring
the total award amounts to$55.3 million plus an estimated $33.4 million for fuel and
reimbursables. The vessel will be prepositioned at sea in various locations worldwide,
mainly in and around Okinawa, Japan. The contract is expected to commence in February
2007 and have a completion date of September 2007 (with options exercised the
completion date will be September 2011). The contract will be funded with FY 2007 funds
that will expire at the end of fiscal year 07. This contract was competitively procured with
100 proposals solicited and eight offers received. The U.S. Navy's Military Sealift
Command, Washington, D.C., is the contracting activity. (
Source: DefenseLink, 05/15/06)

APRIL 2006

Cost overruns singled out
WASHINGTON – Three Northrop Grumman Corp. weapons programs were singled out
Friday for dramatic cost increases in a new Pentagon report on defense acquisition costs.
The Pentagon said 40 programs have exceed their initial cost estimates enough to trigger
notice under defense budget laws. Overall, the Defense Department's estimate of total
costs for 85 big weapons programs rose $39.7 billion to $1.58 trillion. Four programs
experienced big cost increases compared with their current baseline cost estimates: a
Lockheed Martin Corp. (LMT) Army rocket system, a Northrop Grumman combat drone, a
Northrop Grumman weather satellite program and a canceled special operations
submarine project. Another 36 programs were caught under a new budget law that looks
at cost growth compared with original program estimates instead of updated program
projections. The 36 programs are all at least 30 percent over original cost estimates.
Affected programs include the F-35 Joint Strike Fighter, the Virginia-class submarine, and
the Army's Future Combat Systems modernization program. The Pentagon said the new
report reflects changes in technology and war planning that inevitably alter weapons
buying projections. (
Source: MarketWatch, 04/10/06)

Energy company to sell fleet
NEW ORLEANS, La. – A privately held New Orleans energy services company has agreed
to sell its fleet of lift boats that service offshore platforms for $52 million in cash. Laborde
Marine Lifts Inc., a locally owned company that was founded in 1996 by John Laborde and
his son, Gary, will sell its fleet of five liftboats to Hercules Liftboat Co., a division of
Hercules Offshore Inc. A sixth liftboat still under construction will also be included in the
sale. As a result of the sale, Laborde will cut its staff from 50 employees to five. (
Source:
New Orleans Times Picayune, 04/08/06)

MARCH 2006

Interior communications contract awarded
WASHINGTON, D.C. - Avaya, Inc., McLeansville, N.C., is being awarded a $5 million
contract for equipment, material and associated integrated and technical services for the
interior communications systems onboard Navy fleet ships. The systems provide interior
communications for ships telephone systems, announcing systems, damage control,
security, command control, administrative operations, flight deck, well deck, hangar deck
and vehicle deck. This contract includes four one-year options, which, if exercised, would
bring the cumulative value of this contract to $25 million. Work will be performed in
Norfolk, Va. (50 percent); San Diego, Calif. (40 percent) and Pascagoula, Miss. (10
percent), and is expected to be completed March 2007. (
Source: DefenseLink, 03/30/06)

Littoral combat ship weapon tested
TUCSON, Ariz. – The NetFires Limited Liability Company, composed of Raytheon Missile
Systems and Lockheed Martin Missiles and Fire Control, successfully conducted a ballistic
test vehicle flight test for the Non Line-of-Sight-Launch System (NLOS-LS) Precision
Attack Missile (PAM) at the Eglin Air Force Base, Fla., test range Feb. 16. NLOS-LS PAM
and Container Launch Unit (CLU) have been selected as a surface warfare weapon for
the Littoral Combat Ship, the Navy's next-generation multi-mission ship. The PAM missile
was vertically launched from the NLOS-LS CLU that was integrated onto a motion
simulator able to replicate a range of sea conditions that the LCS is likely to encounter.
The Navy selected NLOS-LS PAM and CLU as the premier engagement capability against
surface warfare threats for the Littoral Combat Ship. The Navy expects to build more than
50 LCSs with the first ships commissioned in fiscal year 2008. PAM is a direct-attack
missile that is effective against moving and stationary targets on land and sea at ranges
from zero to 21 nautical miles and is effective against hard and soft targets. (
Source:
Raytheon Co., 03/28/06)

JANUARY 2006

Bender adding jobs
MOBILE, Ala. - Bender Shipbuilding & Repair Co. will add 150 jobs over the next three
years as part of a $10 million expansion of its Mobile shipyard. Bender employs about 700
people at its complex on the Mobile River. The company said the expansion will take 18
months to complete and increase its production and repair capacity by about 40 percent.
Tim Scheib, Bender's chief operating officer, said the 150 new jobs are expected to
include about 30 engineering and management positions. The Mobile Industrial
Development Board on Wednesday approved a 10-year package of tax breaks designed
to help Bender pay for the expansion. The package includes an abatement of $367,425
from local, non-educational sales and use taxes and a 10-year exemption from local, non-
educational property taxes worth about $63,000 annually. Bender in September won a
$232 million contract to build tug barges for Maritrans Inc., a deal that was expected to
add 200 jobs at its Mobile shipyard. Mobile shipbuilder Austal USA, which is jointly owned
by Bender and the Perth, Australia-based Austal Ltd., is adding 350 jobs as part of a
$223 million contract to build a warship for the U.S. Navy. (
Source: Mobile Register,
01/19/06)

Fire Scout lands aboard moving ship
The first fully automated landings of the Fire Scout unmanned aerial vehicle aboard a
moving ship took place Jan. 16 and 17. Two RQ-8A Fire Scouts flying from Naval Air
Station Patuxent, Md., carried out nine landings and takeoffs from the amphibious
transport dock Nashville while the ship was steaming in the lower Chesapeake Bay. Earlier
shipboard tests were manually controlled, said Tim Paynter, a spokesman for Northrop
Grumman Integrated Systems, El Segundo, Calif. Northrop is developing the Fire Scout
for the U.S. Navy and Army. Twelve MQ-8B Fire Scouts, an improved model with a four-
blade rotor replacing the three-blade rotor of the RQ-8A, are being built, four for the Navy
and eight for the Army. Northrop is assembling the aircraft at its plant in Moss Point, Miss.,
from airframes built by Schweizer Aircraft at Horseheads, N.Y. Schweizer delivered the first
airframe on Jan. 3. The first shipboard tests of the MQ-8B are scheduled for 2007. The
Navy plans to operate the Fire Scout from Littoral Combat Ships and DD(X) destroyers.
The Fire Scout can carry a variety of surveillance sensors and has demonstrated the
ability to fire 2.75-inch rockets. The B model will have a 600-pound payload, Paynter said,
enabling it to carry supplies to Army Special Forces teams operating in dangerous areas.
The RQ-8B was redesignated MQ-8B in June 2005, reflecting its multimission status.
(
Source: DefenseNews.com, 01/18/06)