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Northrop Won’t Seek Repair Aid

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Times Staff Writer

Northrop Grumman Corp. said Thursday that it was not seeking any federal aid to repair its three hurricane-damaged shipyards along the Gulf Coast. A published report had said the defense contractor was seeking $2 billion in financial assistance from the Federal Emergency Management Agency.

Northrop and Navy officials said Thursday that no such funding request had been made with FEMA.

The Navy said the Pentagon had requested $2.76 billion in supplemental funding from Congress to pay for hurricane-related damage to “government furnished” equipment and facilities at 11 shipyards along the Gulf Coast.

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Navy spokesman Capt. Thomas Van Leunen said these supplemental funds would be used to replace or repair government equipment, such as computers, weapon systems and machinery stored at the shipyards, and to repair hurricane-related damage to Navy ships under construction.

About $1.13 billion of these funds would also cover the anticipated costs of production delays to the Navy ships caused by Hurricane Katrina, including overtime pay to various civilian workers, including Northrop staff, to complete the work.

Hurricane Katrina displaced thousands of shipyard employees and many of them have not yet returned to work, Van Leunen said.

A similar supplemental funding request by the Navy was approved by Congress in September 2004 to pay for shipyard damage caused by Hurricane Ivan.

Northrop, headquartered in Century City, is the nation’s largest military shipbuilder and operates shipyards in Pascagoula, Miss., Gulfport, Miss., and New Orleans that build destroyers, amphibious ships and oil tankers.

An article in Thursday’s New York Times said the Navy had requested $2 billion from FEMA to help restore Northrop’s three Gulf Coast yards.

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“Funding received by the Navy will not cover costs to repair Northrop Grumman facilities damaged by Hurricane [Katrina] and will not be used to clean up Northrop Grumman’s shipbuilding facilities,” Northrop said in a statement. “Northrop Grumman’s insurance coverage is expected to pay for those costs.”

Last month Northrop said Hurricane Katrina caused about $1 billion in damage to its Gulf Coast facilities, with the most severe damage at its Pascagoula shipyard.

Northrop’s insurers have agreed to pay for about half of the estimated hurricane repair costs. But one insurer has balked at paying the remaining $500 million, saying its policy covers only wind damage, not flooding. Northrop has sued the insurer over this unpaid claim.

Northrop shares closed Thursday at $56.62, down 10 cents.

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