Pentagon eyeing Northrop Grumman shipyard sale

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The Pentagon is closely watching Northrop Grumman’s proposed sale of its shipping business.

The company is one of two shipbuilders for the Navy, and Pentagon officials are concerned that a sale would concentrate the nation’s military ship building in the hands of a single contractor, General Dynamics.

Northrop is closing its Louisiana shipyard by 2013 and moving the work to Mississippi. At that time, it will seek to spin off or sell the entire shipbuilding unit.

Northrop is the nation’s third largest defense contractor, and said the company has been in talks with companies interested in buying the shipping division. The plan to sell the division comes after nine years of expansion.

Defense analysts estimate that the division could be worth as much as $4.6 billion. Shrinking naval orders may be factor in the decision to sell.

Avondale will close once work on Navy transport ships wraps up in 2013. The operations will be moved to Pascagoula to reduce costs and increase efficiency.