Northrop Grumman Corp. has received good news in the wake of the Pentagon's decision to delay a lucrative Air Force tanker contract. The U.S. Navy said it awarded the Los Angeles defense contractor a $5.1 billion contract to build its first next-generation aircraft carrier.
The USS Gerald R. Ford, named after the late president, will be the first of a new class of aircraft carrier in more than 40 years, and replace nuclear-powered Nimitz-class carriers that have been in service since the early 1970s. The new carrier is expected to launch in 2015.
The Navy said Ford-class carriers eventually will replace 11 carriers currently in service. Final cost estimate for the first new carrier is expected to be about $8.3 billion, which includes non-recurring costs associated with design and start-up.
"This contract award is an important and historic milestone for our company," said Matt Mulherin, vice president and general manager for Northrop Grumman Shipbuilding's Newport News, Va., operations, in an interview with Reuters. Northrop expects to build the ship there.
The Defense Department on Wednesday delayed plans to award a $35 billion contract for the Air Force's next generation aerial refueling tanker jets, leaving the decision to the next president and giving Northrop rival Boeing Co. more time to revise its competing bid.
Northrop shares closed down 21 cents to $69.99 on the New York Stock Exchange.
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