Huntington Ingalls Industries will close its Gulfport composites shipyard by May of next year, laying off as many as 315 of the 427 employees there, according to the Associated Press.
The Newport News, Va.-based company said the shutdown was necessary because of a reduction in work for the U.S. Navy’s Zumwalt-class destroyers.
Huntington Ingalls CEO President and CEO Mike Petter said the Navy has switched to steel for use in future ships.
According to the AP, the Gulfport facility has been building deckhouses out of carbon fiber materials and balsa wood cores for the guided missile destroyers, which are being assembled at General Dynamics Corp.’s Bath Iron Works shipyard in Maine. Because of the multibillion-dollar cost of each ship, the Navy cut its order to three and restarted production on an older class of destroyer. Then, earlier this year, the Navy decided to put a steel deckhouse on the third Zumwalt-class ship, the future Lyndon B. Johnson. Bath Iron Works announced Aug. 5 that it had won a $212 million contract for steel deckhouse, hangar and launching-system modules.
Huntington Ingalls said it would cost $59 million to close the shipyard, with most of that being a non-cash write-off of the value of the Gulfport assets. The company said it expects the write-off to be incurred over the next 18 months and to cut third-quarter profit by $15 million to $20 million. No profit reductions are expected after that.
At least 100 employees will transfer to the main Ingalls Shipbuilding yard in Pascagoula, said Huntington Ingalls spokeswoman Jerri Fuller Dickseski. She said that workers who are being laid off will be offered opportunities there.
The shipyard there employs about 9,900 workers.