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Avondale Switching to Energy; Ingalls Fires Employees for ‘Irregularities’

Feb. 5, 2013 - 05:30PM   |  
By CHRISTOPHER P. CAVAS   |   Comments
Avondale Shipyard is seeking to move to energy infrastructure construction when the Somerset, its last ship, is completed later this year.
Avondale Shipyard is seeking to move to energy infrastructure construction when the Somerset, its last ship, is completed later this year. (Christopher P. Cavas / Staff)
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Avondale Shipyard, down to only one more construction project to complete, is hoping to move its manufacturing specialty from shipbuilding to the energy infrastructure market. Now, with the goal of being closer to the corporate center of the U.S. energy world, the Huntington Ingalls Industries (HII), the New Orleans shipbuilder’s parent company, is opening a new office in Houston, Texas.

“We are in active discussions with respected companies in the oil and gas infrastructure market,” Chris Kastner, the HII executive charged with leading Avondale’s corporate development switchover, said in a Feb. 5 statement.

“We’ve satisfied ourselves that the engineering and construction elements of these projects are very comparable to shipbuilding, and we are working very hard, both internally and with prospective customers, evaluating and competing for new opportunities.”

About 2,000 employees still work at the shipyard, down from nearly 5,000 only a few years ago. HII, which has said it will close the shipyard by the end of this year following delivery of the amphibious ship Somerset, is consolidating its Gulf of Mexico coast shipbuilding operations at Ingalls Shipbuilding in Pascagoula, Miss.

But the company also is seeking to find new business for the 268-acre, heavy-duty manufacturing facility located on the lower Mississippi River.

“We have a great workforce at Avondale with unique engineering and manufacturing capabilities that have been demonstrated for many decades,” Mike Petters, HII’s president and chief executive officer, said in the statement.

“Additionally, these skilled men and women are located in the heart of a region where there is more manufacturing demand than the current suppliers can meet, particularly in the energy markets. Coupling this talent with our world-class facilities leads us to believe we have everything in place at Avondale to excel in this market.”

HII is pitching its ability to make oil platform structures, very large modules for refineries, and components for other large energy industry structures, and barge them anywhere along the Gulf coast. Many of these components are built in Chinese facilities, but Kastner appealed to patriotism. The projects, he said, “should be made in America by American craftsmen and craftswomen.”

The news release also touted “the shipyard’s 30-plus years of modular engineering and construction expertise and nearly 75 years of experience in heavy manufacturing.”

Ingalls ‘irregularities’

Over at the Ingalls yard, HII is dealing with an accounting irregularities scandal involving nearly two dozen employees. In response to a news query, the company released this statement in January:

“Ingalls Shipbuilding recently learned of certain time charging irregularities by employees at its Pascagoula facility. The irregularities were discovered by company personnel. We are conducting a thorough investigation with outside, third-party experts to review the facts and to determine the scope of the irregularities. We are also investigating the cause and concurrently developing a robust corrective action plan to prevent further occurrences.

“This behavior is in no way condoned by Huntington Ingalls Industries or by any of its divisions and is, in fact, in direct contrast to the company’s values. Ingalls Shipbuilding has taken prompt, serious and appropriate action and will continue to do so as required. We are very disappointed in these individuals and their behavior is in no way a reflection of the culture at Ingalls. Customers and appropriate government agencies have been notified.”

A source with knowledge of the investigation said nearly two dozen employees had been terminated because of the affair. It is not clear whether all the employees are supervisors or managerial personnel, or whether union workers are involved.

No arrests have been announced or made public due to the investigation.

The source said the irregularities were not confined to a single shipbuilding program, but were spread across several projects.

“We’re not sure of the motivation at this point,” said Beci Brenton, an HII spokesperson. “And that’s part of the investigation.”

The U.S. Navy, Ingalls’ primary shipbuilding customer, also declined comment.

“The Navy is continuing to receive status reports from HII on the ongoing investigation,” Capt. Cate Mueller, a spokesperson at the Pentagon, said Feb. 5 in an email. “It would be inappropriate for us to comment further at this stage.”

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