Few obituaries capture the true essence of the deceased and the recent “press release” about the end of the Huntington Ingalls Industries (HII) Gulfport Composite Center of Excellence in Gulfport, Miss., is no exception.
"This is a difficult but necessary decision," the release quotes HII President and CEO Mike Petters as saying. "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."
It was only a year ago that Petters was raving about what a “national treasure” the Composite Center was. Of course, you’d expect someone in his position to say just that but he was on the mark with that one.
I visited the center when it was finishing up the first deckhouse on the Zumwalt and I could not believe my eyes. It takes a lot to impress me and I was Impressed with a capital “I.” To think that the superstructure in that shop was made of composites – well it boggled my mind. It was so big, so well-constructed – so futuristic.
Navy officials raved about the finished product and all it would do – make the destroyer lighter and stealthier.
Apparently, though, the current economic climate makes such attributes too expensive. It is a shame, too, that the Navy cannot afford to keep this industrial base going the same way it can with its destroyer and submarine programs. Once the nation loses this, it will be too expensive and difficult to justify for a restart.
“Current work being performed at Gulfport is expected to be completed by the end of the first quarter of 2014, with closure expected by May 2014,” the HII release says.
"Ingalls Shipbuilding continues to perform well in building the composite products for the Zumwalt-class program and has demonstrated considerable learning curve improvements," the release quotes Irwin F. Edenzon, HII corporate vice president and president of Ingalls Shipbuilding as saying. "We are working closely with our Navy customer to efficiently complete our composite work on Michael Monsoor (DDG-1001) and the mast of Portland (LPD-27) by the end of the first quarter 2014."
And that, as they say, is that. We know the when to expect the end.
In connection with this closure, HII says expects to “impact 427 employees either through headcount reductions or transfers.”
The country loses a national treasure; people lose their jobs.
With the way sequestration is winding up, the defense industry better get used to that cycle.
The company also expects 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 recognized 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.
The “material impact” will surely be felt elsewhere.