by Mike Hall, May 17, 2011
In letters to President Obama, more than 500 small business owners serving the Avondale (La.) Shipyard community compared Northrop Grumman’s plans to shut down the Avondale shipyard to “pirates in earlier era who scuttled ships to keep their foes from using them.” The giant shipyard is closing to maximize corporate profits, not because it is losing money.
The letters urge Obama to help them keep the yard open. Avondale generates about $2 billion in economic activity for the region, sustaining a network of small businesses that cater to the shipyard’s diverse workforce.
Today, many of those business owners met at the Avondale Truck Stop and presented the letters to Rep. Cedric Richmond (D-La.), Rep. Steve Scalise (R-La.) and representatives of Sen. Mary Landrieu (D-La.). Richmond will personally deliver the letters to Obama later this month.
The letter signers include grocers, veterinarians, barbers, restaurant owners, accountants, retailers, insurance agents and scores more. Says Avondale Truck Stop manager Kai Chin:
Our business depends on the shipyard. Every business in the area will say the same thing. Losing Avondale will destroy us.
Last year, Northrop Grumman announced it was closing the shipyard and began laying off its 5,000 member skilled workforce. In March, it spun off the shipyard to its newly created company, Huntington Ingalls, and now the workforce is down to 3,000 who are building the final ship on the yard’s order book.
In the letter the small business owners say:
We understand business. Sometimes a business is losing money and has to close. Avondale is not losing money. Northrop Grumman has decided it can make more money closing it than keeping it working. Their corporate bottom line apparently does not have any room for commitment to a community or even to our national defense.
The contract between Huntington Ingalls and the Navy provides significant financial incentives to close the yard—paying $310 million in shut down-related reimbursement. Some $120 million of that would be net profit for the corporation.
The business owners urge Obama to “encourage Northrop Grumman to either”
keep Avondale open building ships or sell it to someone who will.