DECEMBER 2007

Contract will benefit South Mississippi
PASCAGOULA, Miss. – The Rolls-Royce plant in Pascagoula will do three-quarters of the
work on a $7 million research and development contract awarded this week to Rolls-
Royce Naval Marine of Walpole, Mass., by the Navy. The contract is to develop a process
to minimize corrosion on ship propulsion systems with nickel boron coatings. The plant in
Pascagoula, which finished an 18,000-square-foot expansion in 2005 to improve
production across the range of marine products, produces propellers for the Navy. When
it was dedicated officials said the new building would allow the company to machine
propellers three times faster than in the past. Work on the latest contract will be
completed by January 2013. (
Source: The Sun Herald, 12/27/07)

Navy awards contract for LPD
The Navy on Friday awarded Northrop Grumman a $1 billion contract for the ninth San
Antonio-class amphibious transport dock ship. The “Somerset,” an LPD-17-class ship, will
be built primarily in New Orleans, but about 15 percent of the work will be done in
Pascagoula, home of Northrop Grumman Ship Systems headquarters. The ships are
designed to carry a fully loaded Marine amphibious battalion. (
Source: Mississippi Press,
New Orleans Times-Picayune, 12/22/07)

Austal facility gets boost from Navy
MOBILE, Ala. – The Navy plans to contribute up to $33 million to an Austal USA modular
shipbuilding facility, Austal Ltd. said in a news release. Austal said the money would be
paid in a series of reimbursements as it reaches specific construction milestones on its
planned 700,000-square-foot manufacturing facility southeast of its existing Mobile River
shipyard. The Navy earlier this year said it would make available $140 million for
improvements to Gulf Coast shipyards, money designed to boost recovery from Hurricane
Katrina. (
Source: Mobile Press-Register, 12/21/07)

Research vessel launched
MOSS POINT, Miss. – The Pisces, a $38 million fisheries research vessel, was launched
into the Escatawpa River Wednesday. It’s the third of four fisheries research vessels VT
Halter Marine is building for the National Oceanic and Atmospheric Administration. This
one will be based in Pascagoula to study Gulf and South Atlantic fisheries. The 208-foot
ships are designed to count and measure fish stocks. The fourth ship, the Bell M.
Shimada, is under construction at the Moss Point yard and is expected to be launched in
July or August. (
Source: Mississippi Press, 12/20/07)

Company to build training craft
MOBILE, Ala – Mobile’s C&G Boat Works plans to build the third of up to five Navy training
vessels with the award of an $8.4 million contract modification. Design work on the first
vessel is almost finished. Work will begin on the second vessel sometime in the first
quarter of next year. C&G is on the east side of the Mobile River. (
Source: Mobile Press-
Register, 12/14/07)

Ship engaged in sea trials
PASCAGOULA, Miss. – A Northrop Grumman-built national security cutter has finished the
first of three rounds of sea trials. Bertholf, a 418-foot ship built for the Coast Guard,
began sea trials a week ago when it left Pascagoula for machinery trials in the Gulf of
Mexico. Work on the Bertholf began in September 2004, and the vessel is scheduled for
delivery to the Coast Guard next spring. The ship is the first of eight for the Coast Guard’s
Deepwater Program. (
Source: Mobile Press-Register, 12/11/07)

Michoud to build yachts
NEW ORLEANS, La. – BoldMar Inc., a Florida company, plans to use facilities in eastern
New Orleans to build yachts. The yachts will be built at the Michoud Assembly Facility’s
National Center for Advanced Manufacturing. BoldMar CEO Robert Bolderson said his
company has signed a three-year lease. NASA also plans to use Michoud to build the new
generation of spacecraft for the Constellation program – an initiative to return astronauts
to the Moon and beyond. BoldMar plans by early next year to begin fabricating the line of
yachts. (
Source: New Orleans Times-Picayune, 12/09/07)


NOVEMBER 2007

Northrop gets procurement contract
The Navy awarded Northrop Grumman a $90 million contract to procure materials for a
Zumwalt DDG 1000 destroyer. The work for the next-generation warship will be performed
by Northrop Grumman Ship Systems facilities in Pascagoula and Gulfport. (
Source:
Mobile Press-Register, 11/14/07)

Navy cancels General Dynamics ship
The Navy canceled a General Dynamics ship contract, reducing to one from two the
number of ships the company will make as part of a competition to build a new generation
of coastal vessels called the Littoral Combat Ship. The Navy said the two sides couldn’t
agree on terms for a new fixed-price contract covering the second ship. Previously the
Navy canceled a second ship to be built by Lockheed Martin Corp. That was to be built by
Bollinger in Lockport, La. The second General Dynamics ship was to be built by Austal in
Mobile. General Dynamics and Lockheed Martin are now building just one ship a piece.
Both are to be delivered next year. (
Source: Multiple, 11/02/07)

Conferees agree to boost shipbuilding funding
House and Senate negotiators on the fiscal 2008 defense appropriations bill have agreed
to boost the Navy’s shipbuilding accounts while trimming money from the Army’s Future
Combat Systems. Conferees approved $588 million in advanced procurement money for
a second Virginia-class submarine, and agreed to fund two Littoral Combat Ships this
year. Appropriators approved $50 million in advanced procurement for the LPD-17
amphibious warfare ship, along with the Bush administration’s request to buy one LPD-17.
Conferees trimmed $200 million from the Army’s Future Combat Systems. (
Source:
CongressDaily, 11/01/07)


OCTOBER 2007

Mine warfare center to open
STENNIS SPACE CENTER, Miss. – The Naval Oceanography Mine Warfare Center will be
officially launched at a ceremony Friday at Stennis Space Center. The center will use
information on oceanographic conditions to assist the Navy’s mine-warfare forces. The
center will report to the Naval Oceanography Operations Command, a subordinate of
Commander, Naval Meteorology and Oceanography Command. (
Source: The Sun
Herald, 10/23/07)

Bollinger to close industrial canal operation
NEW ORLEANS, La. – Bollinger Shipyards plans to close its operation on the Industrial
Canal in New Orleans by the end of next year. The company plans to shift its ship repair
and conversion yard to Bollinger locations in Morgan City and Sulphur. (
Source: New
Orleans Times-Picayune, 10/21/07)

Maritime welding program holds open house
MOBILE, Ala. – Alabama Industrial Development Training plans to formally unveil a new
maritime welding training program next week during an open house at its Brookley training
center. Ed Castile, AIDT director, says the classes have been going on for a while, but
this is its coming out part. Mobile area maritime employers Atlantic Marine Holding
Company, Austal USA, Bender Shipbuilding & Repair Co. Inc., and C&G Boat Works
helped AIDT formulate curricula. Castile said AIDT is working to establish a program in
Bayou La Batre. (
Source: Mobile Press-Register, 10/12/07)

Senate defense appropriations bill has $9 billion for Mississippi
The Senate’s version of the FY 2008 Department of Defense Appropriations Bill
recommends $459 billion in spending, including some $9 billion in Mississippi. The bill
goes to conference with the House within the next two weeks. The bill includes $2.8 billion
for development and construction of the Navy’s next generation destroyers, $1.37 billion
in funds for the LHA-6 amphibious helicopter carrier and $1.4 billion for construction of
LPD-25 amphibious ship, all at Northrop Grumman’s Ingalls Operation in Pascagoula. The
bill also includes $5.6 million for aircraft carrier propellers from Pascagoula’s Rolls-Royce,
$38.8 million for three Moss Point-built Fire Scout UAVs and $10 million for Hunter UAVs
with work done in Starkville and Moss Point. The bill also has $2.1 million for force
protection systems built by Rapiscan of Ocean Springs, $2.1 million for upgrades of
special operations boats at Gulfport’s United States Marine and $32.9 million for defense
research programs at the state’s four largest research universities. The bill also includes
$3 million for the continued scale-up of industrial capability for production of POSS
Nanotechnology. The scale-up allow for rapid insertion of the advanced material into a
broad range of weapon system. The production is conducted by Hybrid Plastics in
Hattiesburg. (
Source: Sen. Trent Lott press release, 10/04/07)


SEPTEMBER 2007

First new Navy destroyer to be built in Maine
The first DDG-1000 Zumwalt class destroyer will apparently be built at Bath Iron Works in
Maine. The Navy will send its first shipment of radars and other system equipment to Bath
rather than to Northrop Grumman Ship Systems’ Ingalls yard in Pascagoula. The Navy
agreed to a schedule change that will reduce an anticipated workload gap for that plant,
said U.S. Sen. Susan Collins, R-Maine. The DDG-1000, long designed DDX, is the
successor to the Arleigh Burke destroyers. Both Bath and Ingalls are scheduled to build
one DDG-1000 apiece. Construction contracts are to be awarded this year with
fabrication to begin within the next year or so. (
Source: Mobile Press-Register,
Associated Press, others, 09/26/07)

Northrop ship pleases Navy
PASCAGOULA, Miss. – Northrop Grumman and Navy officials say the Mesa Verde, an
amphibious transport dock ship built by Northrop, has successfully completed its
acceptance trials in the Gulf of Mexico. LPD 19 will be commissioned in Panama City, Fla.,
on Dec. 15. Mesa Verde is 684 feet long and 105 feet wide and will replace four classes
of amphibious ships. The new ship class gives the Navy’s Expeditionary Strike Group the
technology to launch and recover amphibious landing craft, operate an array of rotary-
wing aircraft, and carry and launch the U.S. Marine Corps’ Expeditionary Fighting Vehicle.
(
Source: The Sun Herald, 09/21/07)

Panel balks at LCS spending
Work on the second of two littoral combat ships at Austal USA’s shipyard in Mobile could
be scuttled and future work derailed. The Senate Appropriations Committee Wednesday
voted against construction of the second vessel. In adopting the fiscal 2008 defense
spending bill, it also turned down the Navy’s request for about $911 million to order two
more of the ships for the 2008 fiscal year that begins Oct. 1. Once it passes the full
Senate, the spending measure must be meshed with a House counterpart that would allow
the second ship to proceed and also provide the Navy with most of the money needed to
buy another vessel next year. (
Source: Mobile Press-Register, 09/13/07)


AUGUST 2007

U.S. Navy Secretary Winter visits Austal
MOBILE, Ala. – U.S. Navy Secretary Donald Winter visited Mobile’s Austal USA shipyard
for several hours last week. He addressed employees and told Austal managers he is
pleased with the progress on the Littoral Combat Ship, which Austal is building with a team
lead by Virginia-based General Dynamics Corp. Austal Chief Operating Officer Dan
Spiegel said Winter told Austal managers he is pleased with the progress made on the
vessel since his last visit in early March. More than halfway complete, the ship is
scheduled for delivery in summer 2008. Intended for missions in shallow coastal waters,
the LCS is a high-priority program for the Navy. (
Source: Mobile Press-Register,
08/11/07)

Coast Guard awards contract for third ship
WASHINGTON, D.C. – The Coast Guard awarded Integrated Coast Guard Systems a
$337 million contract to build the third National Security Cutter at Northrop Grumman Ship
Systems Ingalls Operations in Pascagoula, U.S. Senators Trent Lott and Thad Cochran
announced. The award includes $255 million for cost adjustments to the first two NSCs
now being built in Pascagoula. The adjustments offset several change orders, material
and labor cost increases as well as costs associated with Hurricane Katrina. The total
value of the contract award is $592 million. The NSCs are one element of the “Deepwater
Program,” a 25-year effort to recapitalize the Coast Guard’s inventory of ships, aircraft,
and command and control systems. Lott noted that the program has been the target of
deserved and undeserved criticism, but “we must move forward with this badly needed
upgrade.” The 418-foot NSC is designed to be the Coast Guard’s flagship vessel.
(
Source: Sen. Trent Lott release, 08/09/07)

Navy to go to fixed-price contracts
WASHINGTON – The Navy will use fixed-price contracts in making future buys of its next-
generation littoral combat ship, the service said in a status report submitted to Congress.
In purchasing the first four vessels, the Navy employed “cost plus” that reimburse two
competing construction teams of legitimate costs, along with an agreed-upon fee. The
switch to fixed-price contracts that include incentives for good performance will “more
equitably balance cost risk between the Navy and industry,” the report says. (
Source:
Mobile Press-Register, 08/04/07)


JULY 2007

Navy considers speed-up for Maine yard
The Navy may speed up production of a new destroyer in Maine, a move that could
reduce a work gap shipbuilders had worried about. Bath Iron Works Corp. shipbuilders
had worried about the gap as the General Dynamics subsidiary prepares to move from
building Arleigh Burke destroyers to the next-generation Zumwalt "stealth" destroyer,
which ramps up between 2008 and 2010. The Navy is now looking to move up work on the
new destroyer being built at Bath to early next year instead of the end of the year. The
move is seen as helpful to both Bath Iron Works by stabilizing its work force as well as to
Northrop Grumman’s Ingalls shipyard in Mississippi, the other destroyer builder, which has
several programs under way while recovering from Hurricane Katrina. The discussion
doesn’t change the Navy’s plans to let Bath and Ingalls simultaneously build the lead
ships in the program. (
Source: The Associated Press, 07/27/07)

Austal completes first addition
MOBILE, Ala. – Austal USA has moved into the first of two additions scheduled to be
completed this year at its downtown Mobile shipyard, the shipbuilder announced. The
additions represent an investment of about $7 million. The ground floor of the new, $3
million facility is an aluminum panel shop that opens onto Austal's northern assembly bay,
where construction on a second littoral combat ship for the U.S. Navy will get under way in
September. Austal is also adding on to its southern assembly bay, where a second Hawaii
Superferry is under construction. There, Austal is adding a building that will house a large
piece of machinery called a high-speed router cutter that efficiently and precisely cuts
aluminum panel. (
Source: Mobile Press-Register, 07/19/07)

Changing output of U.S. scientific articles: 1988-2003
In the early 1990s, the absolute number of science and engineering articles published by
U.S.-based authors in the world’s major peer-reviewed journals plateaued – a change
from a rise in the number of publications over preceding decades. The trend occurred
across different categories of institutions, different institutional sectors, and different fields
of research. In other developed countries – a group of 15 members of the European
Union and Japan – the absolute number of articles continued to grow throughout most of
the 1992–2003 period. During the mid- to late 1990s, the number of articles published by
EU scientists surpassed those published by their U.S. counterparts, and the difference
between Japanese and U.S. article output narrowed. (
Source: National Science
Foundation, 07/18/07)

Navy secretary blasts Northrop’s work
Navy Secretary Don Winter wrote a scathing letter to Northrop Grumman CEO Ron Sugar
last month, criticizing the company’s performance on the LPD 17 amphibious ship
program. The letter cited poor construction standards and an inability to meet cost and
schedule targets at the company’s Gulf Coast shipyards. Sugar wrote back that Northrop
has much work to do, but pointed out there were problems not of Northrop’s making,
including constant design changes. Mississippi Sen. Trent Lott agreed, saying the Navy
kept asking for “more bells and whistles.” A Northrop spokesman said the company
continues to improve its shipbuilding process. (
Source: Multiple, including Virginian-Pilot,
Reuters, Defense News, Bloomberg, San Antonio Express, Biloxi Sun Herald, 07/11/07)

Saunders Engine to be sold
MOBILE, Ala. – Saunders Engine & Equipment Co. Inc., a family business founded in
1959 that provides diesel engine services to commercial marine clients, has agreed to sell
its Mobile operations to Houma, La.-based Marine Systems Inc. According to MSI parent
Houston-based Kirby Corp., MSI has agreed to pay about $13.2 million cash, subject to
post-closing inventory and other adjustments. Kirby said it expects the deal to close
before July 20. Saunders' Orange Beach-based business, Saunders Yachtworks, is not
included in the transaction. (
Source: Mobile Press-Register, 07/10/07)

Navy to return island to Mississippi
PASCAGOULA, Miss. – The Navy on Monday formally turns over ownership of Singing
River Island to the state of Mississippi. The 437-acre island, south of Northrop Grumman
Shipbuilding, for 14 years had been the home of Naval Station Pascagoula until it closed
last year as part of the base realignment. Mississippi gave the property to the Navy in the
late 1980s with the understanding it would revert back to the state should the Navy leave.
The Coast Guard has a permanent presence on the island, and the National Oceanic and
Atmospheric Administration has a temporary base. The island has 100 developed acres
and another 100 that could be developed. (
Source: The Associated Press, 07/07/07)


JUNE 2007

Union keeps eyes on Austal
MOBILE, Ala. – Sheet Metal Workers International Association Local 441 is continuing its
efforts to organize workers at Austal USA, nearly three months after the National Labor
Relations Board ruled that the downtown Mobile shipyard broke federal labor laws in
alleged actions linked to a failed 2002 union vote. The company, which can appeal the
NLRB ruling to federal circuit court, now awaits a board decision on back pay owed to
Austal employees who were allegedly fired because of their union association, said Bill
Pfister, Austal’s vice president of government programs. Unionization efforts at Austal
date to spring 2002, only about a year and a half after the Australian maker of aluminum-
hulled vessels opened in Mobile. (
Source: Mobile Press-Register, 06/13/07)

Northrop wins new contract
WASHINGTON, D.C. – The Navy awarded Northrop Grumman Ship Systems a $191
million contract modification to the existing contract calling for construction of the DDG
1000 Zumwalt Class next-generation destroyer. The contract provides for production
planning, labor, logistics support, and engineering to support detail design and
construction of DDG 1000. The program was long called DD(X). (
Source: Senator Trent
Lott, 06/05/07)

Aker Kvaerner gets $14 million contract
MOBILE, Ala. – Aker Kvaerner ASA, a producer of subsea systems, won a $14 million
contract from Helix Energy Solutions subsidiary Energy Resource Technology Inc. to
produce two umbilicals totaling more than 36 miles for Helix’s Noonan field in the Gulf of
Mexico. Work will be performed at the company’s south Mobile County facility, Aker
Kvaerner Subsea Inc. Umbilicals are steel tubes that carry fiberoptic cables, electrical
wiring and hydraulic fluid from platforms to the ocean floor. The umbilicals will be delivered
in January 2008. (
Source: Mobile Press-Register, 06/05/07)

Navy gives $2.4 billion deal
PASCAGOULA, Miss. – The U.S. Navy has awarded Northrop Grumman a $2.4 billion
contract to design and build the next-generation LHA 6 amphibious assault ship at its
Pascagoula shipyard, the company announced Friday. Company spokesman Bill Glenn
said the ship is expected to be delivered in 2012. He said this new contract represents
more work for the boat builder, which is constructing several different classes of ships at
its Pascagoula, Gulfport and New Orleans yards. The company is also building Aegis
destroyers, Coast Guard cutters and now three different classes of amphibious ships.
Glenn said workers building another amphibious ship will move to the new contract as
they finish, keeping employment numbers at the same level. The LHA 6 will replace an
older class of amphibious assault ships. It will be able to operate as the flagship for an
expeditionary strike group. (
Source: The Sun Herald, 06/02/07)


MAY 2007

Coast Guard to seek money recoup
NEW ORLEANS, La. – The Coast Guard will seek to recoup money spent on a failed
program to convert eight of 110-foot patrol boats to 123-foot vessels. The patrol boats
were part of the Coast Guard's Deepwater program, a $24 billion modernization of the
agency’s aging fleet of ships, helicopters and planes. The program has been criticized for
giving contractor Integrated Coast Guard Systems – a joint venture between Lockheed
Martin and Northrop Grumman – too much control over vessel design. The vessels were
converted by Bollinger Shipyards in Lockport under a $488 million contract from Northrop
Grumman. The contract was canceled in July 2005 after hulls on some of the modernized
boats cracked and buckled. In November, the Coast Guard pulled eight of the 10 boats
from service because of safety concerns. The Coast Guard has not yet determined how
much it will try to recoup from its contractors. (
Source: New Orleans Times Picayune,
05/23/07)

Trinity Yachts eyes expanding services
GULFPORT, Miss. – Trinity Yachts LLC and International Yacht Collection have signed a
letter of intent for Trinity to acquire IYC. The deal should be completed by July 1, the
companies said. Trinity, which operates construction facilities in Gulfport and New
Orleans, builds custom superyachts over 300 feet. It has 18 yachts under contract. IYC is
a global yachting company that offers brokerage, retail charter, charter management,
yacht management and crew placement from its headquarters in Fort Lauderdale, Fla. It
also has offices in Monaco; Nassau, Bahamas; Newport, R.I.; Palm Beach; and St.
Maarten. The size of the deal was not announced. (
Source: The Sun Herald, 05/19/07)

LCS back on track
The U.S. Navy’s top acquisition official was upbeat and positive about the troubled Littoral
Combat Ship program, telling a Washington audience, “We’re back on track.” Earlier this
year, severe cost overruns and manufacturer problems led the service to cancel plans to
buy two more LCS ships in 2007 to pay for cost growth on the first ships. The construction
contract for one of two LCSs being built by Lockheed Martin was canceled. The service
scaled back its original request for three ships in 2008 to two while the program
weathered an intense internal review. Congress seems poised to restore that ship and
one more to the 2008 budget request, but only if the Navy can demonstrate they’ve got a
handle on the program. “We do believe we can execute four ships,” Delores Etter told
reporters May 7 after speaking at a Navy-sponsored small business convention. (
Source:
Defensenews.com, 05/08/07)

DoD turns to venture capitalists
The Defense Department is using some of the nation’s top technology investors to help it
find innovations from tiny start-up companies. DeVenCI (Defense Venture Catalyst
Initiative) brings together two groups that have much to gain from each other and that
have had trouble finding efficient ways to work together. “We’re a search engine,” said
Bob Pohanka, director of DeVenCI, noting that the program is a chance for military
procurement officials to have more intimate contact with investors who make a living
scouring laboratories and universities for the latest innovations. The program provides a
regular exchange of ideas and periodic meetings between a select group of venture
capitalists and dozens of strategists and buyers from the major military and intelligence
branches. Government officials talk about their needs, and the investors suggest
solutions culled from technology start-ups across the country. The project is in its early
stages. There have been three meetings since October. (
Source: New York Times,
05/07/07)


APRIL 2007

Lack of workers concerns Northrop
PASCAGOULA, Miss. – In an appeal to business and government leaders in Jackson
County, Northrop Grumman Ship Systems President Philip Teel said the Ingalls shipyard
needs workers to keep up with the $9 billion backlog of Navy ships it has slated. “At the
highest levels of government there are questions of whether we will be able to get that
work done in the time frame they need it to be done,” Teel told members of the Jackson
County Area Chamber of Commerce at its annual membership meeting in Moss Point
Tuesday. Teel said the Ingalls yard is short 400 craftspeople and 250 salaried positions.
He blamed housing and insurance as two big problems. He said the yard has a three-year
plan to solve the work force problem. (
Source: The Sun Herald, 04/25/07)

MSU distance-learning engineering degree offered
STARKVILLE, Miss. – Designed primarily for working professional engineers unable to
take traditional courses, Mississippi State is offering an interdisciplinary master of
engineering degree through distance learning. “This master’s program is especially
designed to meet the needs of the practicing engineer,” said Roger King, associate dean
of research and graduate studies. King said the interdisciplinary nature of the degree also
enables students to develop programs of study unique to their individual requirements.
For more information, contact Rita Burrell at 662.325.5923 or rburrell@bagley.msstate.
edu. (
Source: MSU, 04/18/07)

Justice probing Coast Guard project
WASHINGTON – The Justice Department is investigating a Coast Guard contract
managed by Lockheed Martin and Northrop Grumman over design flaws in cutters that
are central to the $24 billion modernization project, a member of Congress and a
representative for the companies said Wednesday. A spokeswoman for a joint venture
between Lockheed Martin Corp. and Northrop Grumman Corp. said the Justice
Department notified the companies in December of an investigation into the Deepwater
program. The Justice Department told Lockheed, Northrop and other contractors not to
destroy any documents related to command and control systems, the conversion of 123-
foot cutters and National Security Cutters, the spokeswoman for Integrated Coast Guard
Systems, Margaret Mitchell-Jones, said. Mitchell-Jones said the joint venture was
cooperating with the Justice Department. (
Source: AP, 04/18/07)

Coast Guard to take over Deepwater
The Coast Guard is taking control of its troubled $24 billion modernization program from
Lockheed Martin and Northrop Grumman as part of a restructuring of the project,
congressional sources confirmed to the Washington Post. The move comes during
mounting criticism of the contract for the Deepwater program that made a Lockheed-
Northrop consortium “lead systems integrator” and gave it significant management
powers. Critics said the contract gave the corporate team too much control and that the
Coast Guard was lax in its oversight duties. Deployment of cutters and patrol boats
produced so far has been delayed, the capabilities of some larger ships have been
reduced, and costs have increased. The Coast Guard will gradually take over the lead
systems integrator role, but a representative for the consortium said it would continue to
work on the program. The sources spoke on condition of anonymity because the change
is not to be announced until today. (
Source: Washington Post, 04/17/07)

Navy cancels Lockheed Martin's LCS
WASHINGTON – Three months after halting work on a planned littoral combat ship, the
Navy canceled a Lockheed Martin contract outright, citing a failure to reach a deal to
contain spiraling costs. The Navy is also monitoring the performance of a rival General
Dynamics Corp. team that includes Austal USA in Mobile. The LCS is designed to operate
in shallow coastal waters. The Navy had contracted for four vessels, two each from
Lockheed and General Dynamics. Officials ultimately want to buy 55 of the ships, and in
2010 plan to choose between the competing designs. In response to the cost overruns,
the Navy recently decided to postpone ordering two more ships this fiscal year and plow
the savings back into covering the bills on the first four. (
Source: Mobile Press-Register,
04/13/07)

Strikes ends at Northrop Grumman
PASCAGOULA, Miss. – Independent unions and the Pascagoula Metal Trades Council
voted Wednesday night to accept Northrop Grumman’s latest contract offer and end a 28-
day strike. About 60 percent of the votes cast were in favor of the contract. The new
contract calls for a $1.68 an hour raise immediately and two 55-cent raises each
subsequent year. Health insurance costs still will increase by $50 a month. Workers were
told there would be a cost-of-living bonus in the second and third years. (
Source:
Multiple, 04/05/07)

Northrop offers new proposal
GAUTIER, Miss. – Northrop Grumman gave a new contract proposal to striking union
workers on Tuesday. Workers are expected to vote on the proposal Wednesday. If
approved, the more than three-week strike at the Pascagoula shipyard would come to an
end. The proposal is for a $1.68 an hour raise to go back to work, and then 55 cents a
year for two additional years – a raise of $2.78 an hour over three years. The unions had
asked for a $4 an hour raise. The strike started March 8. (
Source: The Sun Herald,
04/03/07)


MARCH 2007

Northrop launches program for student apprentices
GULFPORT, Miss. - Thirty high school students from across the Mississippi coast will be
paid to attend classes their senior year while they learn the new technology of carbon
fiber shipbuilding. Through its School to Apprentice program, Northrop Grumman has
partnered with the Mississippi Department of Education to provide an opportunity to
students. They will attend senior classes at their high school in the morning. Those from
Moss Point, Vancleave and Pascagoula will spend afternoons in the polymer lab at Moss
Point Vo-Tech. Students from Ocean Springs west to Hancock Country will train at the
Northrop Grumman polymer plant on Seaway Road in Gulfport. When they graduate from
high school, students can apply for a two-year apprentice program with the company. Dan
Culleton, vice president of Gulfport Operations, said the company expects by 2009 to
have up to 600 employees building Coast Guard cutters and carbon fiber deckhouses for
DDG 1000, a new generation of Navy ship. (
Source: The Sun Herald, 03/31/07)

Ruling: Austal broke federal law
MOBILE, Ala. – Austal USA broke federal labor laws by firing 10 workers and threatening
plant closure, job loss and stricter discipline in connection with a failed 2002 union vote at
the company’s Mobile River facility. The National Labor Relations Board ruling affirmed an
earlier ruling by a judge that also ordered a new union vote at Austal, saying the company
behaved in an objectionable manner by placing security guards at the gate of the plant on
the morning of the vote. The company must also offer to rehire the 10 employees it fired
and offer them back pay. The Australia-based shipbuilder employs more than 900 people
at its Mobile shipyard. The board’s decision was released March 21. (
Source: Mobile
Press-Register, 03/28/07)

Navy changes timetable on LCS
WASHINGTON, D.C. – Under pressure from Congress, the Navy is slowing its purchasing
plans for a littoral combat ship program. Instead of ordering two more of the vessels this
year, the Navy now intends to postpone those buys and plow the money into covering the
bills for construction of the first four prototype ships already under way. Austal USA of
Mobile is building two of those as part of a team led by Virginia-based General Dynamics
Corp., while a rival group headed by Maryland-based Lockheed Martin Corp. is building
the other pair. In addition, the Navy has decided to choose one of the competing designs
in 2010 as the basis for future orders of what could be more than 50 ships. (
Source:
Mobile Press-Register, 03/21/07)

Navy may allow ship building to resume
NEW ORLEANS, La. – Lockheed Martin Corp. can continue working on the multimillion-
dollar Littoral Combat Ship if it can bring the program’s ballooning cost under control and
pay for overruns, the Navy said Thursday. Secretary of the Navy Donald Winter said the
government will lift a stop work order on the Bethesda, Md. contractor if it agrees to a
fixed-price incentive contract that also would give the Navy more oversight. The
announcement comes about two months after the Navy, citing “significant cost increases,”
ordered the defense contractor to stop work on the vessel for 90 days while the program
was reviewed. The vessel was to be built at Bollinger Shipyard in Lockport. Work could
resume in mid-April if agreement on a new contract is reached. Lockheed Martin will meet
with the Navy soon to discuss the proposal. The Littoral Combat Ship is a major
component of the Navy's future fleet. (
Source: New Orleans Times-Picayune, 03/17/07)

Coast Guard cancels contract
WASHINGTON – The Coast Guard canceled a troubled $600 million patrol boat program,
saying the service could manage the effort more efficiently than two of the nation’s largest
defense contractors. The Coast Guard had given Lockheed Martin and Northrop
Grumman broad latitude to develop the Fast Response Cutter, shifting significant control
to the contractors. But the effort stalled after concerns emerged last year about the
design of the vessel. By managing the work itself and rebidding the development work,
Coast Guard officials estimated they would save enough money to buy an extra ship and
address a patrol boat shortage by getting ships built faster. Development of the Fast
Response Cutter is part of a $24 billion Coast Guard effort, known as Deepwater, to
modernize and greatly expand its aging fleet of ships, planes and helicopters. The
program has faced heavy criticism from Congress as government auditors have identified
design flaws in three ship programs and attributed the problems in part to the service's
decision to give so much control to the contractors. About $2.3 billion has been spent on
the overall Deepwater effort. (
Source: Washington Post, 03/15/07)

No further talks planned yet
PASCAGOULA, Miss – The unions, Northrop Grumman and the federal mediator have not
talked or set up any meetings that could help settle the ongoing strike. Mike Crawley,
head of the Pascagoula Metal Trades Council, said Friday that there's been no
communication between the unions and the company. A federal mediator who could also
help settle the dispute hasn't stepped in, Crawley said. Thousands of Northrop Grumman
workers walked off the job Thursday and many cited economic and psychological factors
from Hurricane Katrina as part of the reason. Many workers said they wanted larger pay
increases, smaller health-insurance cost increases, dental insurance and more sick time
to help compensate for the way South Mississippi has changed since the storm. The
situation had been deteriorating over the last few days as union groups on average voted
down the company's latest contract offer in margins near 8-1 in votes Tuesday and
Wednesday. Northrop Grumman officials released a statement Wednesday night that said
other plants in Gulfport, New Orleans and Tallulah, La., had agreed to a new three-year
labor agreement identical to the one rejected by the Pascagoula plants. The salary for
journeymen was raised to $43,300 annually, the statement said. (
Source: The Sun
Herald, 03/08-09/07)

Bender gets barge job
MOBILE, Ala. – Bender Shipbuilding & Repair Co. has landed a contract to build three
articulated tug barges for Overseas Shipholding Group, which has pegged total
construction cost at $90 million each. The tug portion of the work will be done at the
Mobile shipyard, while the barges will be built by Bender affiliate Tampa Bay Shipbuilding
& Repair Co. Work is set to begin late in 2007 or early 2008, and could mean adding to
the staff of around 850 depending on backlog at the time. The first 12,000-horsepower
tug is scheduled to be finished in the second quarter of 2009, with the other two
completed in six month intervals after that. (
Source: Mobile Press-Register, 03/08/07)

Austal USA eyes new project
MOBILE, Ala. – Austal USA is hoping to bring more military work to its Mobile shipyard by
building vessels akin to the high-speed passenger-vehicle ferries it produces for
commercial clients, said Bill Pfister, the company's vice president of government
programs. Pfister said Austal has a good chance of landing work through the Joint High
Speed Vessel, or JHSV, program. Pfister said the program evolved out of the Army’s
Theater Support Vessel program, which called for converted commercial high-speed
ferries to carry troops, trucks, tanks, armored combat vehicles and guns over distances of
1,100 miles or less. The JHSV would have a shallow draft, making it easy to use at the
relatively shallow ports common in developing countries, according to information
released by the U.S. Navy, the buying agent for the program. The JHSV program calls for
eight vessels over five years starting in fiscal 2008, with a design contract to be awarded
this year, Pfister said. The shipyard's approximately 900 workers are now building a littoral
combat ship, or LCS, for the U.S. Navy and a second Hawaii Superferry. (
Source: Mobile
Press-Register, 03/02/07)

Navy retreats from cost-overrun statement
WASHINGTON -- The Navy on Wednesday retreated from a top official’s assertion that a
littoral combat ship under construction by Austal USA in Mobile is facing a serious cost
overrun. At a breakfast meeting, Assistant Navy Secretary Delores Etter told reporters
that the project price tag for the ship is now $350 million or more, well above the $223
million construction contract awarded in 2005. In an e-mail statement several hours later,
Lt. Com. John Schofield, a Navy spokesman, acknowledged that “some cost growth” on
the Austal-built ship is expected, but said the figure used by Etter was a mistake “There is
insufficient information to know precisely the final cost range,” Schofield said. Those
numbers will be available within several weeks. Austal, which employs more than 900
people at its Mobile yard, is building the prototype LCS as part of a team led by Virginia-
based defense contractor General Dynamics Corp. (
Source: Mobile Press-Register,
03/01/07)


FEBRUARY 2007

Coast Guard buoy work goes back to Universal
Universal Marine & Industrial Services Inc. has won a five-year deal to fabricate steel
buoys for the U.S. Coast Guard. The contract, awarded by the U.S. Department of
Homeland Security, is for $22.9 million. The buoys are used by the Coast Guard to mark
channels, and range in size from 24 inches in diameter and 6 feet long to 9 feet in
diameter and 35 feet long. The deal was awarded to Universal following the dissolution of
Theodore competitor Wallace Fabrication LLC. (
Source: Mobile Press-Register, 02/27/07)
Coast Guard to build facility
NEW ORLEANS, La. – The U.S. Coast Guard will build a $17 million facility at the naval
support center in New Orleans, a project that will bring the center’s total number of
employees to nearly 2,500. “The Coast Guard’s decision brings us closer to creating the
critical joint military and federal installation complex we had in mind for the Federal City,”
said Louisiana Economic Development Secretary Michael J. Olivier. With its 750 members,
the Coast Guard’s presence in New Orleans is the largest and most complex safety field
unit it has in the United States, he said. Credited with more than 33,000 rescues in the
aftermath of hurricanes Katrina and Rita, the Coast Guard Sector New Orleans
encompasses most of Louisiana, including the ports of Baton Rouge and New Orleans
and over half of Mississippi. (
Source: Baton Rouge Advocate, 2/26/07)

Deepwater program under close scrutiny
WASHINGTON - The U.S. Coast Guard may not renew its $24 billion contract with
Lockheed Martin Corp. and Northrop Grumman Corp. to modernize the service’s aging
ships, the Coast Guard's top official said. The $3 billion contract extension would start in
June and continue for 43 months. Senators from both parties said the Coast Guard has
done a poor job of managing a program which, since its 2002 inception, has experienced
delays, cost overruns and design flaws. Deepwater was launched as a joint venture of Los
Angeles-based Northrop and Bethesda, Maryland-based Lockheed, which formed a
partnership called Integrated Coast Guard Systems. Federal investigators and lawmakers
have faulted the Coast Guard for a lack of oversight of Integrated Coast Guard Systems.
Lawmakers Wednesday were also upset about revelations of design flaws in the new
National Security Cutter being built at Northrop Grumman’s shipyard in Pascagoula, Miss.
At the hearing, Philip Teel, president of Northrop Grumman Ship Systems, said the cutter
is not the same ship that had been proposed in 1998. New requirements since the attacks
of Sept. 11, 2001, and the impact of Hurricane Katrina have added about 1,000 tons to its
displacement, along with a one-third increase in electrical power systems, a tripling of air
conditioning and ventilation capacity and 26 percent growth in the size of berthing spaces,
Teel said. The inspector general released another report this week saying contractors
installed cables on 123-foot patrol boats that could cause toxic smoke if they caught fire.
The boats have been suspended from operation. The work was done by Bollinger
Shipyards in southern Louisiana. (
Source: Multiple, 02/14,15/07)


JANUARY 2007

Northrop lands contract
PASCAGOULA, Miss. – The Navy has awarded Northrop Grumman a $268.1 million
contract to complete the advance design on the Zumwalt class destroyer. The contract
runs through 2013. Work on the DD(X) project will be performed at Northrop Grumman
Ship System facilities in Pascagoula, Gulfport and Washington, D.C. While the new
destroyers are expected to fulfill a number of missions for the Navy, the primary mission
will be fire support. The ship is armed with a 6.1-inch advanced gun system and can hit
targets up to 100 miles inland, with missiles extending the range several hundred miles.
The ship is also outfitted with helicopters or unmanned aerial vehicles. The Navy originally
planned to build 32 Zumwalt class destroyers. However, only two are currently being built
as technology demonstrators due to cost concerns. Northrop Grumman will build one and
Bath Iron Works in Bath, Maine, a General Dynamics subsidiary, will build the other. The
first destroyer in the class, the USS Zumwalt, will be given the designation DDG 1000.
(
Source: Mississippi Press, 01/30/07)

Coast Guard takes issue with report of cutter problems
The Coast Guard’s new $385 million-plus flagship vessel, part of a multibillion-dollar effort
to modernize the Coast Guard’s fleet, has significant design flaws that will increase its
maintenance costs and reduce service life, says a government investigation. But the
Coast Guard and contractors take issue with the report, the Coast Guard saying some of
the data used was dated. As designed, the 418-foot National Security Cutter, built by
Northrop Grumman Ship Systems in Pascagoula, would not be able to remain at sea for
230 days a year over 30 years, as is required by its contract, the report said. The report
blames the deficiencies on the Coast Guard’s “failure to exercise technical oversight.” It
says the Coast Guard handed authority over the design and construction to its
contractors, Lockheed Martin and Northrop Grumman, operating as Integrated Coast
Guard Systems. The report also notes that the combined cost for the first two cutters
already has grown from $517 million to $775 million. That increase doesn’t include
anticipated increased costs related to Hurricane Katrina. The National Security Cutter, the
largest ship the Coast Guard has commissioned, will be the first major delivery in the
Coast Guard’s Deepwater program, a $24 billion attempt to modernize the agency’s aging
fleet of ships, helicopters and planes. (
Source: New Orleans Times-Picayune, 01/30/07)

Shipyard labor negotiations under way
PASCAGOULA, Miss. – Earlier this month, union leaders and Northrop Grumman began
the process of negotiating a new work contract that will affect thousands of employees at
the shipyards in Pascagoula and New Orleans. March 4 is the last day of the current
contract. If it goes like previous talks, it could go down to the wire. In 2003 federal
mediators extended the work contract two weeks and still it was the day before the
deadline that the last of the unions voted for a new four-year package. In 1999, when a
number of unions rejected the contract proposal, the small independent machinists union
voted to strike and put up a picket line. Others followed and the Pascagoula yard, owned
by Litton Industries at the time, went through a three-week strike. Representatives from
the yard's 13 unions sat down with Northrop Grumman Dec. 21, but negotiations really
didn't get started until Jan. 8. All 13 unions have at least one representative at the table,
but nine are represented under the Metal Trades Council and vote as one. The talks are
taking place in Moss Point and New Orleans. (
Source: The Sun Herald, 01/29/07)

Six Gulf Coast shipyards damaged by Katrina will split $140 million
The U.S. Navy said Wednesday it will split $140 million in repair funds among six Gulf
Coast shipyards damaged by Hurricane Katrina. The money was designated by Congress
for repairs at shipyards that have existing Navy shipbuilding contracts and that were
damaged by Katrina in 2005. The Navy said it reviewed 18 proposals from seven
shipbuilders. Those approved for funding include Northrop Grumman Corp.’s shipyards in
Pascagoula and Gulfport, Miss., and New Orleans, Seemann Composites in Gulfport,
Swiftships Shipyards LLC in Morgan City, La., Textron Marine and Land Systems in New
Orleans, Austal USA and Atlantic Marine, both in Mobile. (
Source: The Mobile Press-
Register, 01/25/07)

Navy replaces shipbuilding chief
The U.S. Navy on Tuesday named Rear Adm. Charles Goddard as its new top executive
for shipbuilding, bringing new leadership to a position with direct oversight of its troubled
Littoral Combat Ship program. Goddard replaces Rear Adm. Charles Hamilton as the
Navy's program executive officer for ships. The job is responsible for a series of Navy
acquisition programs including the LCS and the DDG 1000, which both have ties to the
Mobile area. The Navy has ordered four prototypes of the LCS, a next-generation warship
designed for a variety of missions in shallow, coastal waters. Two of the vessels are being
assembled in Mobile by shipbuilder Austal USA. The Navy ultimately plans to purchase 55
of the new ships over time, and is evaluating a pair of designs to determine which it
prefers. Austal, part of a team led by General Dynamics Corp., is competing against a
rival team led by Lockheed Martin Corp. The Navy on Jan. 12 ordered Lockheed to stop
work on the second of its two prototypes because of cost overruns on both vessels. The
90-day work stoppage will allow the service to review the program and get a handle on its
rising costs, according to a Navy spokesman. The military trade publication Defense News
reported that Hamilton was replaced because of cost issues with the LCS. The Navy
declined to give a reason for the change. (
Source: Mobile Press Register, 01/24/07)

Superferry to launch Thursday
MOBILE, Ala. – Austal USA this week will launch the first of two Hawaii Superferry craft
from its facility on the Mobile River. The 353-foot aluminum ferry can carry 866
passengers, 282 cars and 28 large trucks. Its maximum load is 882 tons and its top speed
is 37 knots. Austal, one of the few aluminum ferry specialists in the world, in December
2003 won a contract to build two ferries for Hawaii Superferry Inc. The first vessel is
lacking only finishing touches to its luxury passenger level before it undergoes a series of
sea trials and is delivered to its owner in early spring. The value of the contract is about
$190 million for both boats, said Terry O’Halloran, director of business development for
the privately held Hawaii Superferry Inc. Work is under way in Mobile on the second
vessel, scheduled for delivery in early 2009. (
Source: Mobile Press-Register, 01/14/07)

Navy orders halt to ship project
The Navy, citing significant cost increases, ordered Lockheed Martin Corp. to stop work
on a Littoral Combat Ship being built at Bollinger Shipyards in Lockport, La. The stop work
order will last 90 days while the program is reviewed. The Navy has not cited how much
costs have climbed. The Littoral Combat Ship, or LCS, is a major component of the Navy's
future fleet. It’s designed to operate close to shore and was initially hailed as a bargain at
$220 million. The Navy plans to purchase 55 of the ships and is considering two designs.
Lockheed won a $188 million contract in 2004 to design and build the first LCS, USS
Freedom, and a $198 million contract in June 2006 for LCS-3. The 377-foot Freedom,
now at a shipyard in Marinette, Wisc., is about 75 percent complete and is scheduled to
be delivered to the Navy this summer. Contracts for the second and fourth ships were
awarded to General Dynamics Corp. and built at Austal USA in Mobile. Austal’s LCS-2 is
now about 50 percent complete. The stoppage order does not apply to any of the other
vessels. (
Source: New Orleans Times Picayune, Mobile Press-Register, 01/13/07)