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Northrop Joins Raytheon's Team to Work on Ship

November 21, 2003|From Bloomberg News

Northrop Grumman Corp., the world's largest builder of warships, said Thursday that it would team with Raytheon Co. to design a new stealth ship for the Navy four months after Northrop's own bid for the project was rejected.

Century City-based Northrop will contribute its shipbuilding knowledge as Raytheon designs the littoral combat ship, a new class of small, fast vessels capable of fighting in shallow coastal waters, Raytheon said. Raytheon has no shipyards of its own.

In July, seven-month design contracts went to Raytheon, Lockheed Martin Corp. and General Dynamics Corp. in what analysts have said was the Navy's bid for fresh ideas. Being left off the list was the first loss for Northrop since it became the biggest Navy ship contractor as a result of $8 billion in shipyard acquisitions in 2001 and 2002.

The Navy plans to spend $4 billion through fiscal 2009 to research, develop and build the first nine littoral combat ships and is considering a program to build as many as 60 of them.

Northrop can use its knowledge of carbon-fiber composite materials to help Raytheon design lighter ships, Raytheon spokesman Steve Brecken said.

Shares of Waltham, Mass.-based Raytheon fell 22 cents to $27.24, and Northrop rose 91 cents to $92.78, both on the New York Stock Exchange.

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