Huntington Ingalls Announces Closure of Composite Centre of Excellence
Huntington Ingalls Industries have announced the closure of its Gulfport Composite Centre of Excellence in Gulfport, Miss.
Current work currently being undertaken at Gulfport is expected to be completed by the end of the first quarter of 2014, with closure expected by May 2014. The company is working closely with Navy customer to complete outstanding composite work on Michael Monsoor (DDG 1001) and the mast of Portland (LPD 27) by the end of the first quarter 2014.
The closure is expected to impact 427 employees either through headcount reductions or transfers and to incur total costs of approximately $59 million. All but approximately $7 million of the total costs are non-cash, and approximately $14 million of the total costs will be recorded in the third quarter of 2013, with the remainder expected to be recognised over the following six quarters. HII estimates that these costs will reduce operating income in the third quarter of 2013 by $15 to $20 million with no material impact in subsequent periods. Additional details are contained in HII’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 4, 2013.
HII President and CEO Mike Petters said;
This is a difficult but necessary decision, due to the reduction in the Zumwalt-class (DDG 1000) ship construction and the recent U.S. Navy decision to use steel products on Lyndon B. Johnson (DDG 1002), there is both limited and declining Navy use for composite products from the Gulfport Facility.