Northrop Grumman suffers $1 billion Katrina hit

Hurricane damage to Northrop Grumman’s Mississippi and Louisiana shipyards tops $1 billion and company officials claim production delays could cost the defense contractor millions more.

The Pascagoula shipyard had been inundated by at least 8 to 12 feet of water after hurricane Katrina slammed into the Gulf Coast on 29 August. By comparison, damages to the company’s facilities in Louisiana were extremely minimal compared to the damages that Pascagoula had. The main difference is that the New Orleans facility, which is located in Avondale on the banks of the Mississippi, did not incur destruction from storm surge and there was no harm to major equipment used for construction.”

In Pascagoula, buildings, electrical grids, construction equipment and infrastructure were damaged or destroyed. The Navy has asked for $2.7 billion to offset the storm’s impact on operations along the Gulf, and much of that money will go to Northrop Grumman. The company acknowledges it has had a real significant setback in terms of the schedules that it has and the cost associated with those ships. According to a spokesman for the company, it has lost between 8 and 9 million hours of labour delivered because of the storm. The company’s work force, nearly 20,000 people at facilities in Pascagoula, Gulfport, New Orleans and Tallulah, was briefly reduced to just over 100 workers after the storm.

Eighty percent of those of employees have returned to work, but delivery of two Navy ships to be completed this year, i.e. the USS San Antonio and the USS Forrest Sherman, will be delayed by at least a couple of months. Work has also resumed on 11 other major projects, but their completions will also be delayed by several months.