Northrop Grumman Shipbuilding - Competitors

Northrop Grumman Shipbuilding Competition

Now Viewing Northrop Grumman Shipbuilding's competition in: Shipbuilding and Repair (primary)

Recent Developments

Storm Spares Louisiana Shipyards - The many ship building and repair facilities in southern Louisiana suffered relatively little damage by Hurricane Gustav. Northrop Grumman's Avondale shipyard sustained only minor damage thanks to preparations, improved internal communication, and other lessons learned from Hurricane Katrina. Although the Avondale yard was reopened in early in September, it operated at below-normal levels as employees were scattered due to the evacuation.

China's Market Share Falls - China's large share of the worldwide ship building market dropped from 43 to 34 percent in the first half of 2008, according to Research and Markets. The drop is attributed to a shift from bulk carriers to oil tankers, a type of ship China doesn't have as much expertise building. China's falling market share may create opportunities for US ship builders. Overall, US exports of ships declined nearly 48 percent in the first seven months of 2008.

Navy Launches New Class of Warship - After years of development and several delays, the US Navy officially deployed the USS San Antonio in August 2008. The amphibious San Antonio-class warship (LPD 17) joins the Marines' Iwo Jima Expeditionary Strike Group. The San Antonio is an all-new class of amphibious warship designed to carry 720 Marines, vehicles, and equipment. Built by Northrop Grumman, the vessel failed inspections in 2005 and 2007; its price tag ballooned from a 1996 estimate of $876 million to an eventual cost of $1.85 billion.

Competitive Landscape

Demand for military ship building is largely determined by the US military budget, and to a much lesser extent, the military spending of foreign governments allied with the US. Commercial ship building demand is determined by international and domestic trade, the health of the global economy, and rate of fleet replacement due to age or obsolescence. Small companies usually specialize in building and repair of small commercial vessels. Large companies tend to offer a wide range of building and repair services for both commercial and military vessels, and enjoy economies of scale in purchasing, design, and manufacturing. Due to a highly labor-intensive manufacturing process, the average annual revenue per employee is about $175,000.

Full Industry Overview For Shipbuilding and Repair

Shipbuilding and Repair Industry Forecast

from Hoover's/D&B subsidiary First Research

The output of US ship building and repairing is forecast to grow at an annual compounded rate of 4.8 percent between 2008 and 2013.

Ship Building and Repairing Growth Steady

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.