November 28, 2012 / 6:41 PM / in 5 years

Huntington studies potential energy uses for closing shipyard

Nov 28 (Reuters) - Huntington Ingalls Industries said on Wednesday it is looking into whether a Louisiana shipyard scheduled to be closed next year could be used for energy projects in hopes of keeping it open.

The shipbuilder employs roughly 3,000 workers at its 268-acre Avondale shipyard outside New Orleans.

Mike Petters, chief executive of Huntington Ingalls, said the company was taking a “hard look” at whether the shipyard could be redeployed in the energy space. He said there could be opportunities to develop partnerships on energy infrastructure projects.

“We have a great workforce, and it’s sitting right in the middle of an area where there’s more manufacturing demand in terms of projects that have been announced in the energy space,” Petters said at a Credit Suisse investor conference presentation that was broadcast over the Internet.

“Our view of it is that’s a way to take an asset that really is headed to nothing and turn it into something,” Petters added.

He said that if no alternate uses materialize, the company plans to close the shipyard after work there winds down in 2013.

Petters reiterated that Huntington Ingalls, which is based in Newport News, Virginia, and was spun off from defense contractor Northrop Grumman last year, expects flat sales through 2015 but margins would expand as the company works its way through unfavorable contracts that will fall off next year.

Huntington Ingalls shares were off 0.5 percent at $40.81 in afternoon trading.

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