Northrop Grumman Corp. said Wednesday that it would lay off 642 workers at its Pascagoula, Miss., shipyard by the end of the year, adding to its recent announcement that it would close its Avondale shipyard near New Orleans.
The Avondale closure will come in early 2013 as the company consolidates military shipbuilding at Pascagoula.
The company said the layoffs now planned for Pascagoula are due to the cyclical nature of shipbuilding, including the timing of contracts.
The first 292 affected workers were notified under a federal law requiring 60 days notice of layoffs that affect 500 or more people.
The shipyard, which has about 11,000 employees, laid off 400 workers from May to mid-July, according to the Mississippi Department of Employment Security.
The shipbuilding process “can result in peaks and valleys in work where the number of employees exceeds the workload requirements,” said Irwin F. Edenzon, vice president and general manager of Northrop Grumman Shipbuilding-Gulf Coast. “This is currently the case here at our Pascagoula facility.”
Pascagoula Mayor Robbie Maxwell said the layoffs were unfortunate amid the slow economy, but he wasn’t worried about the shipyard’s long-term future. He said such cutbacks typically are eventually reversed when workers are called back.
“The bad news is that they’re laid off,” Maxwell said. “The good news is that they’ll be back to work. This is a cyclical thing. It doesn’t happen very frequently, but it does.”
Two ships in the LPD-17 series of Navy amphibious assault ships are under construction at Avondale, but that work is expected to be finished in early 2013, leaving the yard without a mission.
The final two ships in that series will be built at Pascagoula, and no major Navy shipbuilding project to replace the LPD-17 is in the works now.
Avondale has about 4,700 workers, making it Louisiana’s largest manufacturing employer. The company recently laid off 110 workers at that yard. Northrop Grumman also plans to close its Louisiana shipyard at Tallulah before the end of 2010, ending 95 jobs.
“I’m not concerned about Northrop Grumman shutting the shipyard,” Maxwell said of Pascagoula. “That’s not going to happen.”
However, Greg Kenefeck, a spokesman for the Metal Trades Department of the AFL-CIO, which represents about 4,000 Pascagoula workers, said the layoffs were cause for concern.
He said the Mississippi workers had been led to believe “they would be a bit insulated” from cutbacks, as Northrop Grumman said it foresaw work being available in Pascagoula for Avondale workers.
“Our greatest fear is the entire Gulf Coast,” Kenefeck said. “Northrop Grumman wants to get out of shipbuilding. That’s what they’re angling to do.”
But another union, the International Brotherhood of Electrical Workers, said it wasn’t affected by Wednesday’s announcement.
“You’re talking to the wrong guy,” said IBEW local business manager Jim Couch. “I’m still hiring.”
In making the consolidation announcement, Northrop Grumman also said it might shed its entire division that makes warships. The company said “strategic alternatives” for the shipbuilding division include splitting it off through a possible spinoff to shareholders.
The Navy’s recently released long-term shipbuilding plan, combined with a broad Pentagon effort to cut costs on big weapons programs, presents some challenges for Northrop. Rivals like General Dynamics, which is competing to build a new shallow water warship that the Navy plans to buy in big numbers, have seized a large share of the market.
“Northrop Grumman is reacting to the uneven work flow,” Kenefeck said. “The Navy has been tightening down on its procurements. They’ve been uneven from one year to another.”
Marianne Hill, senior economist for the state college board, said Northrop Grumman’s Pascagoula yard accounts for a huge share of Mississippi’s shipbuilding jobs. In June, that figure totaled 15,000 of the 23,100 jobs making up the transportation equipment sector of the state economy, exceeding the expanding and high-profile automaking industry.
“At this point, shipbuilding is clearly larger than automaking,” Hill said.
Mississippi has been struggling with a high unemployment rate, exceeding the national average. The July rate, on a seasonally adjusted basis, was 10.8 percent, down from 11 percent in June. Louisiana’s rate is 7.2 percent, up from 7 percent in June. The national rate for both months was 9.5 percent.
By ALAN SAYRE, Associated Press (AP) (reprinted from http://www.2theadvocate.com/news/101526568.html?index=1&c=y)
The residents of Louisiana’s Gulf Coast are determined to rebuild their lives and their communities after suffering the Triple whammy of Hurricane Katrina, the recession and the biggest oil spill in U.S. history.
Union members who live and work in the area, including members of the Electrical Workers (IBEW) are trying to make it through these tough times themselves while also helping rebuild the region (see video).
But it’s a job they do willingly, not just for the pay, but because they want to keep the unique lifestyle of the Louisiana Gulf Coast alive. One-third of the area residents who evacuated after Katrina have not returned leaving it to those who remain to rejuvenate the region.
The president of the AFL-CIO Metal Trades Department, which includes unions representing thousands of workers at Northrop Grumman Corp.’s shipyards in Avondale, La.; Pascagoula, Miss.; and Newport News, Va., said Aug. 5 that the company had rejected bids from other companies to buy the Avondale facility, which is slated to close by 2013, eliminating 4,900 jobs.
In an interview conducted during a meeting of the AFL-CIO Executive Council, Ronald Ault told BNA that he had learned through various unspecified sources that Northrop Grumman, which in July announced the phasing out of operations at its Avondale, La., shipyard (136 DLR A-12, 7/16/10), only was interested in selling its entire shipbuilding division, and not solely the Avondale facility.
The shipbuilding division of Northrop Grumman manufactures ships for the U.S. Navy, which has cut its budget for marine vessels in recent years, Ault said.
Union Says Company Seeking Tax Deal
Ault charged that the reason Northrop Grumman only would entertain bids on the whole division was that the company wanted to take advantage of a tax deal known as a Reverse Morris Trust, which would allow the company to spin off its shipbuilding division without incurring tax on the transaction. At the time of its announcement of the closing of the Avondale facility, the company said it intended to “explore strategic alternatives for its shipbuilding business,” including spinning off the shipbuilding operation.
When the company announced that it would end operations at the Avondale facility, which at the time of the announcement employed some 4,900 workers, including 4,200 in the bargaining unit, Ault said the unions representing those workers began looking for potential buyers for the facility. Two made bids, but those bids were rejected, Ault said.
Meanwhile, Northrop Grumman Aug. 3 announced it had issued notices under the Worker Adjustment and Retraining Notification (WARN) Act to 205 workers in Avondale and at its smaller facility in Tallulah, La., which is also slated to close. Ault said this represented the first round of layoffs, with more to come as work is completed on the last two Navy ships being built at Avondale.
Company ‘Making Money at the Expense of Workers.’
“The corporation is making money at the expense of the workers in Louisiana,” Ault said. “It’s immoral. If they would sell just Avondale, the jobs would be there.” In addition, Ault said, when the Avondale facility is vacated, it will be considered a toxic waste site that would need to be cleaned up.
Ault said the Avondale shipyard supported some 12,000 jobs in Louisiana, including some 7,000 indirect jobs and the nearly 5,000 workers employed at the facility. The closing of the shipyard would have a dramatic impact on the economy of the region, including lost economic development, wages, and taxes, he said, while the region is still suffering the economic effects of Hurricane Katrina and the more recent BP oil spill.
“We’ve been beating down the doors of politicians” to make them aware of the situation, Ault said, but there’s only so much they can do. He said that Sen. Mary Landrieu (D-La.) “understands the economic impact” of the closing of the Avondale shipyard, and that Secretary of the Navy Ray Mabus was sympathetic to the situation, but “he can’t tell a [private] corporation where to place their work.”
Going forward, Ault said he held out hope that a solution could be found to keep the Avondale facility open and preserve jobs for union-represented workers. One option, he said, was for the state of Louisiana to “float industrial bonds” to purchase the shipbuilding division, including Avondale and Pascagoula, from Northrop Grumman. Such an arrangement, Ault said, would benefit both the workers and the state, which he said would make money on the transaction.
Ault also said he planned to “marshal employees to help us save their shipyard,” and remained an “eternal optimist” about the possibility that those jobs would be preserved. “If we get all the employees behind us, we can move mountains,” he said.
Union officials plan to meet with representatives of Northop Grumman Aug. 12 to discuss severance packages for workers affected by the closing, Ault said.
A Northrop Grumman spokesman told BNA Aug. 6 that “it is our company’s policy not to comment on questions or speculation regarding mergers, acquisitions, or divestitures.”
It’s a sad ending to a novel whose beginning and middle chapters are mostly full of happy human interest stories; neighborhoods that once beamed with pride from first time home owners, a neighbors’ observance of a couple’s newborn child growing up and becoming a little “Trick or Treater”…you know, the kid with the adorable smile who evolves and grows up to be – in front of your eyes – a college graduate, and let’s not forget the chapters that are devoted to family reunions that are the end result of weddings and funerals.
Yes, the decision to close Avondale Shipyard by Avondale Shipyard’s owner, Northrop Grumman Corporation (NYSE:NOC) last Tuesday – July 13, 2010 – is the dagger in the heart of a community that has already suffered enormous loses from Hurricane Katrina, Hurricane Gustav and most recently, oil…oil that poisoned the waters that took away a big chunk of an industry that consistently paid the mortgages and the boat notes of the locals long beforethey knew of the coming of a young man named Archie Manning and the New Orleans Saints.
Understanding the end…The Official Line
Northrop Grumman Corporation confirmed that it will shut down its Avondale shipbuilding operation. The official line coming from the once mighty shipbuilder is, “we’re looking to exit shipbuilding completely.”
CEO and President Wes Bush announced plans to merge the company’s Gulf Coast shipbuilding operations and explore planned alternatives for future shipbuilding endeavors. Bush also said that “we foresee little synergy between Shipbuilding and our other businesses. It is now appropriate to explore separating Shipbuilding from Northrop Grumman.” In other words, “we outta here, see ya, wouldn’t want to be ya.”
Under the current consolidation plans, ship construction at Avondale will wind down sometime in 2013. Future LPD-class ships will be built in a single production line at the company’s Pascagoula, Mississippi facility. Northrop Grumman announced “some” opportunities may develop in Pascagoula for Avondale shipbuilders who wish to relocate.
Avondale Shipyard is located approximately 20 miles upriver from New Orleans, nearest a stretch of earth named Westwego. It’s the people who make Westwego, Louisiana the beehive that it is, that stand to lose the most from this most inopportune “business decision” made by an autonomous faceless / heartless board of directors that represent the Northrop Grumman Corporation.
According to Stephen Moret, Louisiana’s Secretary of Economic Development, at least 5,000 jobs directly linked to Avondale Shipyard will be lost and another 7,000 jobs that are indirectly linked to Avondale will be lost as well.
The census in 2000 calculated Westwego’s population to be a little less than 11,000. With an expectant loss of at least 12,000 jobs associated with Avondale Shipyard and with Westwego being the closest town to the shipyard, the future of Westwego instantly looks bleak.
Situated on the west bank of the mighty Mississippi River, it’s foreseeable that Westwego with the calculated loss of jobs that were generated from Avondale Shipyard, will go the way of old western towns that once boomed with enterprises…enterprises that were born from gold and silver strikes, but unfortunately / inevitably, – like a sickly 90 year old man – once the minerals stopped flowing, dried up and became ghost towns inhabited by ghosts who remembered better times.
Officially since 1938, Avondale Shipyard has employed metal workers, welders, pipefitters, electricians and a whole list of specialty jobs that are related to shipbuilding that has kept Westwego’s population employed.
Is this the death of “the goose that laid the golden eggs” and if so, why?
Is the goose that laid the golden eggs on its last breath? In a political climate / environment where big business has nearly the same rights of a U.S. citizen, – as recently interpreted by the U.S. Supreme Court – and big business decides that it no longer wishes to honor the local town’s people with employment opportunities who by the way, for over 8 decades magnificently performed the tasks of shipbuilding, making billionaires of company shareholders, well, bets are on that the honorable towns people of Westwego, will soon get the short end of the proverbial “dukey stick”.
Democratic and Republican lawmakers from Louisiana want to meet with Navy Secretary Ray Mabus, a former Mississippi governor, to discuss the closing. Mabus heads the administration’s recovery efforts for the Gulf of Mexico oil spill.
Sen. Mary Landrieu, D-La., said she will urge Mabus and Northrop Grumman officials to “reverse this short-sighted decision.”
Republican Sen. David Vitter, a member of the Senate Armed Services Committee, said President Barack Obama also must “step up.” – Funny the president is only a socialist, big business interfering, big government bureaucrat when Republicans voting districts are not affected by catastrophe. (Just food for thought)
Setting aside politics for a moment, what happens to the outdoor seafood market right off of highway 90 when Avondale closes in 2013? What happens to the proprietors of Kass Bros Inc., or Matrana’s Produce? What do we tell the families that have called Louisiana home for countless generations and now if they’re fortunate, will have to locate to keep their jobs? And the unfortunate folks, what happens to them now? Property values will fall until homes are nearly worthless.
Perhaps if we stopped spending trillion of dollars overseas pumping up other countries economies and making – what did Forrest Gump call it – “Gazillionaires” out of selected foreign nationals, perhaps we could find the money in the U.S. budget to continue building ships in Louisiana…you think? Senator Vitter, Senator Landrieu did you know that the U.S. is spending over $100 billion each year supporting troops that are stationed in Japan, Okinawa, Germany, Italy, England, Panama and over 800 other countries? Ah…why?
Does any politician have the intestinal fortitude to present a bill that will stop the madness of our government providing security forces for other countries, including the boosting of their economies?
Are not our own national economies more valuable than the economy of another nation that has the ability to generate their own income? Or are we destined to continue to lose another shipyard somewhere in the United States and create in turn ghost towns that will rival the old ghost towns of western towns with forgotten names?
Westwego, Louisiana is on the corporate chopping block with little to keep it from going the way of Tombstone, Arizona, except the will of Americans who are armed with knowledge. Call your local representative in government and ask why the U.S. has over 200 military bases in Germany alone. Hello? What money making entities stand to gain significant profit by having our troops overseas boost foreign economies while our own domestic economies dry up and disappear? Inquiring minds would like to know.
To the residents of Westwego, Louisiana…it ain’t over until it’s over. Fight and ask the right questions of your local representatives in Congress and the Senate that pertain to your economic survival. Not to do so will only make a ghost town of your homes and businesses and it may even help build a new base in Germany…Germany? WTF, the war ended in 1945 and the Berlin Wall was torn down in 1989, why are we still there? Inquiring minds want to know.
Until next time Louisianans, Good Day, God Bless and Good Fishing.