By Geoff Fein

NEWPORT NEWS, Va.–The creation of Northrop Grumman [NOC] Shipbuilding should afford the new enterprise the opportunity to share work among its sites, get a more effective deployment of capital, and take advantage of technologies spread out among the shipyards that could benefit both the Navy and Coast Guard, the sector’s president said recently.

In January, Northrop Grumman combined its two shipbuilding sectors, Newport News and Ship Systems, into a single operating sector. Two weeks into the venture, Mike Petters, Northrop Grumman Shipbuilding president, said the new effort will make the company’s shipbuilding sector a stronger organization.

“The reason we wanted to do this was to give ourselves a chance to be more efficient and effective,” he told Defense Daily in a recent interview. “To take a look at all of our resources and how we are applying them, so we can do that more efficiently.”

Shipbuilding is a very capital intensive business. One of the things Northrop Grumman Shipbuilding will take a hard look at is how does it most effectively deploy shareholder capital, Petters said.

For example, it may not make sense to have several shops spread across the various yards, when the new sector can have one shop that could become a center of excellence for all the shipyards, Petters said.

He acknowledges decisions like that don’t occur overnight, but once folks start looking at what operations will look like in 15 years, and how decisions are made to get the yards to that point, ” you do get a more effective deployment of capital.”

Petters also sees tremendous opportunities to share technology among the shipyards.

“There is also opportunity now to go back to the Navy and say, ‘you are using this technology on this platform and you are not using this technology on this platform and maybe you ought to think about doing some of that,’ because I think in the same way the shipyards have been stovepiped, focused along their particular products; the Navy is focused that way too,” he said.

“I have already seen opportunities as I have walked around. I have seen things being done on one ship and I scratch my head and ask why can’t we do that on this ship. That will then be, I think, a great benefit to the Navy and Coast Guard for us having done this. I am not sure how you put a dollar value on it but I think it will be pretty valuable for them.”

While each of the yards has a long history of shipbuilding, Petters said he is satisfied that two weeks into the merger, the new sector’s work will be better than any one individual yard’s efforts.

“There used to be a Newport News way and a Gulf Coast way. What we are going to have going forward is a shipbuilding way and it could be one, could be the other, or could be some hybrid of both. What’s encouraging to me is that the teams in each of those areas are excited to be part of that,” Petters said. “Our customer community, the Navy and Coast Guard, are [getting] into it, because they see an opportunity to participate in making that better.”

He added a congressional delegation recently visited the Gulf Coast operations to see for themselves what was going on there. Petters said the lawmakers could see an opportunity to do something at those yards that hasn’t been done before.

“We have a big hill to climb, but we have a great team to go and try and climb it,” he said. “Everybody seems to be trying to figure out a way to make it work.”

As the shipyards come together under one roof, one of the things being looked at are opportunities to share work among the yards, including Newport News, Petters said.

“As the work load surges or ebbs in any particular location, you can take a look at how that lines up with other surges and ebbs in other locations, and you can start to see there may be a way to smooth this out,” Petters explained. “It might be that you move people, it might be that you move work. But it gives us an opportunity. One of the great opportunities here is for us to be able to efficiently work our way through that.”

Rather than having to lay workers off and then rehire them when the workload increases, which is pretty inefficient, he added.

Petters acknowledged the workers at the Ingalls yard in Pascagoula. In 2005, the shipyard, as well as surrounding communities, suffered billions of dollars in damages as a result of Hurricane Katrina. The yard continues to recover, and recently christened the newest Arleigh Burke-class destroyer the USS George Dewey (DDG-105). And this week the first of the Coast Guard’s National Security Cutters (NSC), CGC Bertholf, took to the ocean for its builders trials.

“They have come so far. I am just truly honored to walk through that shipyard and shake hands with some of those shipbuilders,” Petters said.

At last month’s Dewey christening, Phillip Teel, former president of Ship Systems, said the workers were putting Katrina behind them and looking forward.

While there are a lot of opportunities for Ingalls, and Avondale in New Orleans, Petters said the challenge for the yard in the future years will be what happens next.

“For all the work that is on their plate today, our operations on the Gulf Coast are looking over the horizon and wondering what’s next. How does the destroyer program sort itself out, how does the amphibious program sort itself out, what happens with the NSC program? Those are critical issues. They are in discussion today, but shipbuilding is a business that if you don’t make commitments early enough you can basically run out of runway,” he said.

“That’s where the engagement with the Congress and with the services really matters, and we have had very constructive dialogue with the CNO (Chief of Naval Operations) and his team as well as with the House Armed Services Committee seapower [subcommittee]. They understand the picture and it’s a lot of hard work to go through to get to the other side of this,” Petters added.

Avondale, the other Gulf Coast shipyard, is doing great, he noted.

“That yard has really come back. It was not nearly as physically ravaged by the storm, but the communities were ravaged. If you go there today you will see two LPDs. In fact, at the end of the month, we are going to christen the [USS] New York, LPD-21. And we are taking [the USS Green Bay] LPD-20 out on builders trials later this year. So you’ve got two LPDs bow to stern in the Mississippi River waiting to go to sea,” Petters said. “What that shows to me, and I have been on those ships a couple of times now, is one of those fundamental lessons of shipbuilding–if you can get into series production, you can be doggone efficient.”

Both Avondale and Ingalls are moving into series production on LPDs, Petters pointed out. “I think that is a hull form and platform that is incredibly flexible. We’ve figured out how to build it and I think you are going to see lots of different uses for that hull.”

Petters said his tour of the Composites Center of Excellence in Gulfport, Miss., was an eye-opening experience. “There is a significant investment being made now to create the facility for building the composite deck house for DDG-1000.”

The 350,000 square-foot facility’s efforts include building composite structures for the San Antonio-class of amphibious assault ships, the Navy’s Coastal Mine Hunter, and for the Coast Guard’s Deepwater program.

“My view of this, and I am just the last guy to come to the party here, this is probably what they thought 20 years ago when they opened the facility. This is a technology that’s absolutely going to take off, and when it takes off, there may not be enough footprint in all of the sites down there to handle the demand,” he said.

“They may have been saying that for 20 years, but you are now seeing these structures on ships and you see Navy warships with composites in them that are effective fighting machines and able to do the missions. I think you are going to see a lot more of that,” he added.