NEW ORLEANS, LOUISIANA -- Avondale Industries, Inc. (NASDAQ/NMS-AVDL) of New Orleans, Louisiana and Ingalls Shipbuilding division of Litton Industries, Inc. (LIT) located in Pascagoula, Mississippi, two of the nation’s largest shipbuilding companies, have announced 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 companies’ys’ aggressive response to changes in our market place," said Jerry St. Pe’, Senior Vice President of Litton Industries and President of Ingalls. "Both of 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. Ingalls and Avondale bring to the shipbuilding marketplace an extraordinary understanding of customer requirements and 120 years of combined successful response to those requirements."

New Orleans and Pascagoula are located 100 miles apart on the Gulf of Mexico. Ingalls and Avondale teamed their resources during the 1980’s 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 L. Bossier, Jr., Chairman, President and CEO of Avondale. "The agreement establishes the basis for the two companies to jointly offer the best value possible as it relates to design, manufacturing schedule and total ownership cost. It will expand the opportunities for both of our firms and permit us to fully utilize our competitive strengths on a combined basis. 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 in 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. Located in Pascagoula, and 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 deepwater offshore supply vessels.

Avondale Industries, Inc., headquartered in New Orleans, Louisiana, is engaged in the design, construction, repair and modernization of various types of military and commercial oceangoing vessels ships, as well as in the production of various industrial fabrications. Avondale2 employs 6,300 people and is currently engaged in programs to design and construct LPD-17 Class and LSD-CV 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 Marine, Inc.