Post by ferryfast admin on Nov 5, 2007 13:56:28 GMT -5
Austal points finger at General Dynamics
Saturday, November 03, 2007
By SEAN REILLY
Washington Bureau
www.al.com/business/mobileregister/index.ssf?/base/business/1194081667172900.xml&coll=3
The Navy will help Austal USA identify short-term work to "fully utilize its workforce" following the cancellation of a second littoral combat ship that the company was supposed to build in Mobile, the company said in a statement that suggested friction with General Dynamics Corp., the lead contractor for the project.
The Navy announced the cancellation Thursday after it could not reach a deal with the General Dynamics/Austal team on reworking the LCS contract to contain rising costs.
Although Austal Chief Executive Officer Bob Browning worked "very closely with the Navy to achieve a positive outcome, the company had no control over the prime contractor, General Dynamics, who ultimately controlled negotiations on price with the Navy," the company said in the statement released late Thursday evening in the United States, Friday morning in Australia, where Austal USA's parent company is based.
General Dynamics spokesman Jim DeMartini declined to comment Friday.
Asked whether Austal sought a different approach in the talks with the Navy, Bill Pfister, Austal USA's vice president of government programs, said Friday that he did not know. But the cancellation will hurt Austal "a heck of a lot more" than General Dynamics, he said.
"If you looked at the stock price. we got hammered more than General Dynamics because they're a larger company," Pfister said. As of late Friday afternoon, the share price of Austal Limited, the parent company of Austal USA, had nosedived more than 15 percent since Thursday on the Australian Securities Exchange.
General Dynamics' shares closed Friday at $90.13 on the New York Stock Exchange, down slightly from two days earlier, but still close to their 52-week high.
Despite the cancellation, Austal USA, which employs almost 1,200 people between its Mobile River yard and other facilities, foresees no impact on its work force for the next nine to 12 months, according to Browning. Along with completing work on its first LCS, the company is also building a second vessel for Hawaii Superferry, which is scheduled for delivery next September.
Beyond that point, however, Austal will need new business, Pfister said. One option, he said, would be work on the LHA 6 amphibious assault ship to be built primarily at Northrop Grumman Ship Systems' Ingalls shipyard in Pascagoula.
The ship requires a large aluminum deckhouse that Ingalls doesn't have the ability to build, Pfister said. "It's likely that we would bid on it," he said.
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AUSTAL
www.austal.com/
GENERAL DYNAMICS
www.generaldynamics.com/