In a move to keep New Orleans-based Avondale Shipyard open and operating, a memorandum of understanding has been signed with the goal of retooling the famous shipbuilding operation and, in the process, saving nearly 4,000 jobs.
The MOU was entered into by Huntington Ingalls Industries and the Louisiana Economic Development department, winning the praise of Louisiana Governor Bobby Jindal, who said in a statement announcing the deal that his administration refuses to “accept a future in the New Orleans area that does not include Avondale and all of the shipbuilding tradition and economic activity it has spurred in this region.”
In the summer of 2010, the news that Northrup Grumman, parent company to Huntington Ingalls Industries, was planning to close Avondale hit both New Orleans and Louisiana like a thunderclap.
The shipyard, opened during the Great Depression, has long been a major economic engine in the region. A report subsequently issued by the Avondale Shipyard Research Project indicated that the scheduled 2013 closing of the shipyard would mean saying goodbye to the $2 billion economic impact Avondale has on the community, which includes the employment of roughly 6,500 additional people in support jobs.
The MOU, said Gerri Dickseski, corporate vice-president for Huntington Ingalls Industries in Newport News, Va., creates a “plan of record.”
Taking note of the $214 million in performance-based incentives detailed in the MOU, Diskseski added, “It allows us to more aggressively look for a creditable partner and a sustainable market to try to re-deploy that facility and its employees.”
Those incentives will include job-creation credits as well as money to be spent on modernizing and retooling Avondale.
Navy Secretary Ray Mabus, meanwhile, has indicated that up to $300 million in federal funds could be used to develop new partnerships that would keep Avondale running.
“The bottom line is that keeping the shipyard open is going to be very difficult. That has to be made clear,” said Dickseski. “But everyone is working as hard as we can to do just that.”