PASCAGOULA — Defense contractor Northrop Grumman Corp. said today its board has approved the expected spin-off of its shipbuilding business to stockholders, following nearly a year of mulling alternatives for the struggling unit.
Under terms approved by the board, Northrop Grumman stockholders will receive one share of the shipping business, Huntington Ingalls Industries Inc., for every six shares of Northrop Grumman stock they hold on March 30.
Shares of the shipbuilding business will begin trading under the symbol “HII” the next day.
The unit has struggled from a slowdown in Navy shipbuilding contracts and increased competition from rivals like General Dynamics. Northrop and other defense contractors have also been under pressure from the Pentagon to cut costs, forcing them to shrink.
When Northrop said in July it would explore strategic alternatives for the unit, it also announced the planned closure of its main Louisiana shipyard. The Avondale facility in Louisiana is slated to close by 2013.
Northrop is one of the Navy’s main sources of nuclear powered submarines, aircraft carriers and other warships. Shipbuilding accounts for about one-fifth of Northrop’s total revenue.
In a separate item, backers of a multimillion-dollar school aimed at educating shipbuilders in South Mississippi say the project should go out for bid sometime in the next four months.
The federally funded Jackson County Maritime Trades Academy is meant to provide a skilled workforce and help Northrop Grumman Shipbuilding expand its two- to four-year apprentice program from 610 to 1,000 students.
The Mississippi Press reports that Jackson County officials say The LPA Group in Ocean Springs, the firm designing the academy, is almost finished with cost estimates. Once the cost estimate is approved, bids can go out.
The academy is to be built on nine acres north of Northrop’s employee center. Its first class of students is expected to begin studying in fall 2012.
Source: The Associated Press; The Mississippi Press