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Ron's Rants Aug 24, 2010
The Gulf Braces for Yet Another Disaster
by Ron Ault
On the anniversary of Hurricane Katrina and the total failure of an unprepared government to come to the aid the storm survivors, untold numbers of Gulf citizens who died unnecessarily as a result of this neglect and incompetence, a new man-made disaster is looming on the Gulf Coast and it isn’t connected to the BP Oil Spill. This one is, at first glance, just another giant industrial plant closure and thousands of middle class job losses, another regional economic disaster- but that doesn’t even begin to tell the whole story.


Northrop Grumman owns more than half of all the major U.S. defense shipbuilding facilities in the U.S. Two thirds of the Northrop Grumman shipyards are in the Gulf South—Avondale in New Orleans and Ingalls in Pascagoula, Mississippi. Part of the Avondale yard, the composites facility, is located in Gulfport, Mississippi.


Northrop Grumman has decided it no longer wants to own shipbuilding facilities and has announced that, although profitable, shipbuilding doesn’t fit its corporate portfolio.  The company’s plan, as we know it, is to shut down and close Avondale ASAP but no later than 2013.


In the past, the shipyards that were closing did so after completing its last ship. Not so with Avondale. Northrop Grumman plans to shift its Navy ship construction from Avondale to Pascagoula, Mississippi some two years before the final LPD program is complete.


Northrop Grumman (NGS) has made it clear that Avondale must close.  We ask why?  Why the rush? NGS cites a lack of Navy work, but we have been told privately that Navy Under Secretary Sean Stackley is the driving force to close Avondale. Secretary Stackley was the former program acquisition czar on the LPD San Antonio program and is very familiar with Avondale shipyard.


The Navy, of course, denies that it has a hand in anything to do with any of this. They say it is a corporate decision and that they can’t tell a corporation what to do with work within a corporation.  Yeah, and I believe in the tooth fairy!


As the customer that pays all the bills and awards all the contracts that NGS depends on, I am sure that the Navy is simply being modest and down playing their considerable influence. Whoever is behind the curtain pulling the strings on this dirty deed, it has serious consequences. Some of these consequences are readily apparent while others are not. Think about these points:


  • Avondale and Ingalls shipyards are the largest employers in the states of Louisiana and Mississippi—generating some $12.6 billion a year of economic impact on the Gulf Coast, three times more economic impact than the $4 billion dollars that seafood and tourism industries generate combined. When the seafood industry was threatened by the BP oil spill, the world’s news media had TV cameras thrust in the face of every shrimp boat captain on the Gulf asking: “how are you going to make a living.” Yet, this man-made economic disaster shutting down shipbuilding has generated virtually no media attention even though it poses three times a greater economic threat to the Gulf Coast than the BP oil spill.
  • The Gulf Coast NGS shipyards make up one third of the entire U.S. national defense shipbuilding infrastructure and are warm water ports. Once closed they will never be re-opened or rebuilt. These massive heavy manufacturing facilities are capable of building anything, including new energy facilities currently being proposed. Where will the offshore equipment be built for the wind turbines and off shore oil and gas facilities? Communist China?
  • Avondale has historically had a majority black workforce.  What effect will shutting down the largest employer in the State have on the poverty level in the black and Hispanic communities in the region?
  • What effects will the shut down and layoffs of thousands of skilled craft workers have on the Gulf Coast’s recession recovery efforts?

The new slogan for economic recovery is “Made in the USA.”  When it comes to jobs, we need more than just slogans.


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