Litton and Avondale Form Shipbuilding Alliance.

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Sept. 4, 1997--Litton Industries' Ingalls Shipbuilding and Avondale Industries Inc. have signed an agreement to work together on certain future commercial and Naval shipbuilding programs.

Officials of both companies said the agreement establishes the framework for Avondale and Ingalls to enter into teaming arrangements to pursue shipbuilding programs where the complementary experience, expertise, capacity and capability of the two shipyards will enhance the competitive posture of the team and provide increased value to potential customers.

"Teaming has been encouraged by our customers and this agreement between Ingalls and Avondale reflects our company's aggressive response to changes in our market place," said Jerry St. Pe', senior vice president of Litton Industries and president of Ingalls. "Both our shipyards provide superior capabilities for the design and production of all types of vessels and the geographic proximity of our facilities provides a unique opportunity to work together."

Located in New Orleans, Avondale is 100 miles from Ingalls in Pascagoula, Miss. Both yards are situated on the Gulf of Mexico. Ingalls and Avondale teamed their resources during the 1980s when the World War II battleships, USS Iowa and USS Wisconsin, were reactivated and returned to service with the Navy fleet. Both shipyards shared in the work.

"For many future commercial and Navy programs, the combined resources of Avondale and Ingalls will be ideally suited for our teaming agreements," said Albert Bossier Jr., chairman, president and chief executive officer of Avondale. "Teaming will generate synergy, enhance efficiency and thus offer our customers better value. The unique and complementary experience of Avondale and Ingalls will match perfectly with customer requirements."

Under the Memorandum of Understanding which was signed recently by the companies, teaming and specific details of the teaming arrangements (including sharing of work) will be determined on a program by program basis as business opportunities develop.

The companies said they have already entered into teaming agreements to compete for three major shipbuilding programs: The production of a series of future commercial crude oil carriers for several major oil companies; the building of a new fleet of Coast Guard Cutters; and the design and production of the U.S. Navy's planned new Fleet of Auxiliary Dry Cargo Ships.

Litton's Ingalls Shipbuilding division is a leader shipyard for the design, engineering, construction, life cycle support, repair and modernization of advanced surface combatant ships for U.S. and international naval fleets; and for a wide variety of commercial marine products.

In continuous operation since 1938, Ingalls is Mississippi's largest private employer, with approximately 9,500 employees. The shipyard is currently building DDG 51 Arleigh Burke class Aegis destroyers and LHD 1 Wasp class amphibious assault ships, as well as a series of deep water offshore supply vessels.

Avondale Industries is engaged in the design, construction, repair and modernization of various types of military and commercial oceangoing vessels, as well as in the production of various industrial fabrications. Avondale, with 6,300 employees, is currently engaged in programs to provide LPD 17 Class and LSD 41 Class amphibious ships, T-AKR 300 Class strategic sealift ships and a WAGB 20 Class polar icebreaker for the U.S. Navy; as well as tankers for Arco Chemical Co. and product/chemical carriers for American Heavy Lift Ships.

Litton is a leader in worldwide technology markets for advanced electronic, defense and information systems, and a major designer and builder of surface combat ships for the U.S. Navy and allied nations.

CONTACT: Litton Industries Inc., Woodland Hills

Kathleen Wailes, 818/598-2026