Northrop Grumman shipbuilding sectors to be combined

Northrop Grumman Corp. announced late Monday that it plans to realign its two shipbuilding sectors into a single unit, and the defense giant tapped Mike Petters, head of its Newport News shipyard, to lead the operation.

The renamed Northrop Grumman Shipbuilding combines the company's Newport News shipyard with its Gulf Coast-based Ship Systems.

Petters, 48, has been named president of the new merged sector, which is the largest U.S. military shipbuilder, with approximately $5.5 billion in revenue. In his new position, Petters will oversee nearly 40,000 employees - with around half of them in Newport News.

Ron Sugar, chairman and chief executive of Los Angeles-based Northrop Grumman, said in a statement that the strategic realignment "will enable the company to more effectively utilize our shipbuilding assets" and better serve customers' needs.

Jerri Dickseski, spokeswoman for Newport News, called the decision "very positive" for the company's shipbuilding operations.

"I think stability and flexibility are the key words," she said. "You have opportunities to mitigate peaks and valleys in the work force. It provides flexibility to move work and people around."

The realignment becomes effective Jan. 28, but Sugar said the transition process is expected to continue through 2008. Petters, who will assume day-to-day responsibility for the Gulf Coast shipbuilding operations, will work from the sector's Pascagoula, Miss., shipyard during the transition.

The company's Gulf Coast operations have struggled to recover from damage caused by Hurricane Katrina in 2005.

A decision has not been made on where the new shipbuilding sector will be headquartered, Dickseski said. No facility closures or "significant reductions" in employment are anticipated as a result of the change, the company said.

The Newport News shipyard is the Navy's sole builder of nuclear-powered aircraft carriers, and it shares construction of nuclear-powered submarines with General Dynamics' Electric Boat in Groton, Conn. The shipbuilding sector's yards in Pascagoula and New Orleans now build conventionally powered Navy surface ships, including guided-missile destroyers and amphibious assault vessels. They also are involved in the Coast Guard's efforts to modernize its fleet.

A Naval Academy graduate and former submariner, Petters joined the Newport News yard in 1987 in the submarine construction division. Before being named a corporate vice president and president of the Newport News yard in 2004, he held assignments in nuclear ship design and construction, contracts, human resources and management of the shipbuilding trades.

Sugar said that Petters "brings extensive shipbuilding expertise and broad management experience to his new role."

Under the management shift, Philip Teel, who now heads the Ship Systems sector, will take over operations of the company's Mission Systems sector.

Jon W. Glass, (757) 446-2318, jon.glass@pilotonline.com