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July 13, 2010

Louisiana seeks potential buyers for Avondale

Louisiana Governor Bobby Jindal yesterday pledged an all out effort to keep Navy shipbuilding business at Avondale, but said the state has already begun discussions with potential buyers and tenants for the shipyard.

Governor Jindal yesterday met with Northrop Grumman Shipbuilding President Mike Petters to discuss the future of the company's shipyard at Avondale and how it can be secured.

Northrop Grumman executives recently informed the Louisiana Department of Economic Development (LED) that the future of the Avondale shipyard is in doubt due to Navy procurement changes that directly hurt the shipyard.

At a press conference following the meeting Governor Jindal was joined by Senator Mary Landrieu, Congressman Steve Scalise and Congressman Bill Cassidy and called the potential loss of the shipyard a tremendous economic challenge for the New Orleans region. He vowed to do everything possible to save Avondale.

Governor Jindal said, "Specifically, the Navy has updated its shipbuilding procurement plan to push back the LCC program, which would have provided a great deal of work for Avondale after the LPD program. Moreover, the LPD 26 and the LPD 27 - transport warfare ships - would keep workers at Avondale busy through 2015. However, we learned from recent discussions with NG that the company could potentially move the construction of the LPD 26 and the LPD 27 both to Ingalls in Mississippi, which would mean that shipbuilding at Avondale could end by 2012/2013.

"If the LPD program were to be completed early at Avondale, there is nothing significant left in the Avondale backlog and the Navy's 30-year plan, which leaves the facility without a major ship program to produce after about 2012.

"This presents a tremendous economic challenge to the Avondale area. The roughly 5,000 direct jobs at the Avondale site support about 6,500 additional indirect jobs in the New Orleans region, meaning a total of roughly 11,500 jobs are at risk due to this change in the Navy's procurement program.

"Two weeks ago, [Stephen Moret, Secretary of Louisiana Economic Development] briefed our Congressional delegation on this issue and the need for a correction to the Navy's procurement plan to ensure that these jobs are not lost at Avondale and in the New Orleans region.

"Northrop Grumman indicated to us that Northrop Grumman does not intend to keep Avondale open for the long term in the absence of a viable Navy shipbuilding program there. It does appear that the yard should stay active in the short-term, but it also is likely that the total employment level could decline over this period of time.

"Let me be clear - we will do everything we can to secure the future of Avondale, the workers who depend on this company and the communities around them that are all tied to the work done here."

Governor Jindal said the state has already begun discussions with potential buyers and tenants in order to secure employment at Avondale. The Governor said, "We are asking the federal government not to turn its back on New Orleans and Avondale; but if they do, we have already begun discussions with several potential buyers and tenants. Of course - an alternate owner or tenants for the site is not the optimal outcome for Louisiana because it is unlikely an alternative would have a similar level of employment as Avondale has today.

"We continue to tell the federal government and Secretary of the Navy Ray Mabus that the best solution is for the Navy to restore shipbuilding levels to enable Avondale to continue operations at full strength. The bottom line is that - we will continue doing everything we can, from calling on the federal government to not turn their backs on this important facility to exploring every alternative to secure Avondale and the 5,000 jobs at the site that support thousands of our Louisiana families."

The Governor went on to note that Louisiana's ability to create new jobs is threatened by policy changes coming from Washington, D.C. Governor Jindal said, "Here in Louisiana our work to create more jobs for our people has already been made more difficult by Washington, D.C. policy changes over the last few years. For example, the specter of cap-and-trade legislation caused tremendous concern and uncertainty among large industrial companies, resulting in lost opportunities for billions of dollars in new capital investment in Louisiana. In fact, Nucor specifically told us on multiple occasions that issues related to cap-and-trade represent the top obstacle to their project coming to Louisiana over Brazil or some other international location.

"Additionally, the Administration called for the cancellation of NASA's Constellation program, which is resulting in the loss of more than 2,000 direct jobs in New Orleans, as well as the prevention of the creation of up to 2,500 more new jobs. And those losses don't even include the indirect job effects.

"More recently, the deepwater drilling moratorium, which was not even supported by the Administration's own handpicked experts, has already begun destroying thousands of jobs and is eventually expected to destroy roughly 20,000 direct and indirect Louisiana jobs.

"By any reasonable measure, our economy has outperformed the South and the U.S. since the beginning of the national recession. However, we would certainly be in an even stronger position if we did not have to sustain these job losses due to federal government policy. Federal policy decisions are destroying and preventing the creation of tens of thousands of jobs in Louisiana.

"At a time when our country is facing the most severe recession we have faced in decades, we should be focusing on job retention and job creation. We need the Administration and Secretary Mabus to recognize the importance of this facility to our state and to work with us to protect and create jobs here.

The Congressional delegation has agreed to meet with Secretary Mabus in the upcoming week to discuss ways to secure employment at Avondale.

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