Jobs and Investments Related to Newport News Energy the Areva-Northrop Grumman Joint Venture

Yesterday I pointed to some major news outlet articles about the newly announced joint venture between Northrop Grumman Shipbuilding and Areva. The JV will build large nuclear plant components in a location adjacent to the shipyard. I was not surprised to find follow-up article in a local new source from Hampton Roads, Virginia that provides a lot more detail about the specific economic and industrial impact expected from the arrival of Newport News Energy.

Mike Petters, the President of Northrop Grumman Shipbuilding, provides some statements that should reassure Northrop Grumman’s main current customer that the new project will not detract from its ability to continue to provide good service:

“This gives us a chance to diversify a little bit and allow us to smooth more of that out,” said Mike Petters, president of Northrop Grumman Shipbuilding. “We don’t see this as interfering with anything we do on the Navy side. In fact, we think it compliments it very well.”

In a time when there are going to be serious pressures to reduce the defense budget, it is encouraging to have ship suppliers that are working hard to establish other product lines. The alternative approach, taken by certain combat systems suppliers in the Northeast, of using political pressure to force the purchase of unwanted ships in order to keep people employed is simply not affordable.

Newport News Energy will take advantage of the fact that building large nuclear power plants requires many of the same skills as building large, nuclear powered aircraft carriers. The specific components are obviously quite different, but the materials are similar, the processes are similar, the planning and quality control procedures are similar, and the capital equipment required to move materials around should be very compatible.

The waterfront location is also an advantage. This generation of nuclear plants are all designed with the idea of doing as much assembly and preparation work in a factory as possible; that philosophy will require shipments of assemblies and components that are far easier to move on the water than on land.

There is no doubt that local leaders are fully supportive of the new project. They provided some of the typical taxpayer funded incentives offered by governments to attract big business (even though the deal would probably have been done anyway) and are proud of landing a new manufacturing and engineering focused facility at a time of economic uncertainty.

To attract the project, the state and local governments are putting up more than $23 million of incentives. The state will put up $4.5 million of performance-based funding, and will offer up to $1.3 million in tax credits and job training assistance.

Newport News will offer an investment grant over four years estimated at $6.5 million, one-half of 1 percent of the taxable investment. It will also get a 50 percent break on business license fees over 10 years, valued at almost $2.2 million. The city will also provide a $1.2 million discount on a lease of three floors of office space in the city-owned Rouse Tower building at the corner of Mercury Boulevard and Jefferson Avenue.
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“It’s yet another example that advanced manufacturing is able to survive and grow in the United States,” said Florence Kingston, economic development director of Newport News.

Here is a description of the press conference held by Governor Tim Kaine, a man who made the short list of potential running mates for Senator Barack Obama:

“It enables, on the footprint of the shipyard, a new technology, a new form of production,” said Gov. Timothy M. Kaine. “Shipbuilding is a massive industry. It has some cycles associated with it. But to have this technology at the shipyard location … is a great thing for that shipyard.”
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The announcement from Kaine was heavy on symbolism, as the press conference was moved to the ornate Jefferson Room at the Virginia Capitol. Thomas Jefferson designed the Capitol while in Paris, basing it on an ancient Roman temple in Nimes, France. Just down the hall from the press conference stands the life-size likeness of George Washington by French sculpture Jean-Antoine Houdoun.

“The relations between France and Virginia are strong, and those relations are accelerated today,” said Kaine.

If you want to hear a couple of well-informed atomic geeks discussing this joint venture and other recent announcements and projects in the nuclear business, you can visit The Atomic Show and look for episode number 111. Dan Yurman, publisher of the excellent Idaho Samizdat, and I talked yesterday evening for more than an hour and covered the nuclear world from Virginia to Shandong, from Idaho to Florida, and from Vermont to California. I think we even threw in some commentary on India, Canada, Japan and Alaska. If you listen through to the end – or use the fast forward button – you can even hear Dan explain the origin of the name “Samizdat”.