380 Jobs Cut At Northrop Grumman In Newport News

Defense contractor Northrop Grumman Corp is cutting 380 salaried jobs at its Newport News shipbuilding facility, citing a need to control costs.

The company that builds submarines and aircraft carriers for the Navy said the reduction of about 2 percent of its 20,000 workers at the shipyard was necessary to improve efficiency and costs.

The announcement marks the first reduction its Newport News facility has experienced in more than a decade.

"While this is a very difficult decision, it is a critical and necessary step in order to control costs, effectively manage overhead, improve efficiency and lower the acquisition costs of our products to better secure the future of our shipyard," Matt Mulherin, vice president and general manager of Northrop Grumman Shipbuilding-Newport News, said in a statement.

Northrop Grumman, which plans next summer to move its headquarters to Falls Church from Los Angeles, said the cuts are driven, in part, by the completion of major milestones on existing contracts. For example, the company said it is nearing the completion of the design of the Gerald R. Ford aircraft carrier.

More than 100 of the affected employees have been identified as having prior trades experience and have been offered hourly positions, such as welders and electricians, the company said.

Northrop Grumman said in July that it was exploring "various alternatives for the potential separation of its shipbuilding business, including a spinoff or sale of the unit."

Last week, the company told private-equity bidders for its shipbuilding business, which includes its Newport News shipbuilding operations, that the company has chosen to spin off the unit to shareholders, three people with knowledge said then.

The company had announced plans in July to shutter the Avondale shipyard near New Orleans in early 2013 and consolidate its Gulf Coast military shipbuilding at Pascagoula, Miss. About 4,600 people now work at Avondale.

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McDonnell Wants Independent Probe of Computer Outage

Richmond, Va. --
Gov. Bob McDonnell wants an "independent third party" to investigate the collapse of a Virginia government computer system nearly a week ago that continues to paralyze some agencies.

"I am not pleased that our employees and citizens have experienced this disruption in service," McDonnell said yesterday in ending his public silence on the crisis.

Six of 26 agencies hit by the outage Wednesday still were not fully up and running, despite a promise by state computer chief Samuel A. Nixon Jr. to have their service restored by yesterday at 8 a.m.

This includes the state Department of Motor Vehicles, which may not be able to resume issuing driver's licenses and identity cards at its 74 offices until tomorrow. The agency had expected such services would be available today.

Other agencies still limping: the state Department of Taxation, which could not make tax refunds or process tax payments; and the state Department of Juvenile Justice, unable to handle fully the intake and tracking of young offenders.

The state Department of Environmental Quality had continuing problems with a system it uses to develop computer programs. Voter files are being restored at the State Board of Elections.

McDonnell's directive to the agency that Nixon heads, the Virginia Information Technologies Agency, to open an inquiry potentially puts the Republican governor at odds with Northrop Grumman, which was hired in 2005 to provide communications and computer services under a $2.3 billion contract -- the state's largest-ever privatization program.

Christy Whitman, a Northrop Grumman spokeswoman, declined comment.

McDonnell, who collected more than $75,000 in campaign contributions from Northrop Grumman, had pledged to smooth relations with the embattled company, having lured its headquarters from California to Northern Virginia and having agreed to a new, longer contract that pays it an additional $236 million.

"I have directed an operational and performance review of the situation be conducted so we can determine the proper course of action to best protect the interests of the commonwealth," McDonnell said in a written statement.

His press secretary, Stacey Johnson, said VITA is expected to hire an "independent third party" to explore the cause of the blackout and, perhaps, recommend that the state recover from Northrop Grumman the dollars in lost business and productivity.

The company already is expected to be hit with fines for the latest service interruptions. Nixon said the penalties will be at least $100,000.

Nixon said he had yet to select a firm to conduct the investigation and is choosing for now to focus on restoring service.

Even VITA is having difficulties. Its accounting and billing programs are not working properly.

Contributing to the delays: restoring giant data files, a task that can take 18 hours or more. The episode -- it is the second major outage under VITA/Northrop Grumman since 2007 -- is calling attention to the adequacy of backup systems, for which agencies must pay the company extra.

The new contract with Northrop Grumman requires that the company strengthen and speed up its response to equipment failures and other emergencies.

At VITA/Northrop Grumman headquarters in Chester, more than 400 servers, which support clusters of state computers and their software, failed when two circuit boards crashed mid-afternoon last Wednesday. The boards were manufactured and installed by EMC Corp. of Hopkinton, Mass.

A company spokesman could not be reached for comment.

But VITA said it had been told by EMC that a dual failure was unprecedented. The company shipped backup equipment to Virginia during the weekend, but it has not been installed, Nixon said.

Before the outage, McDonnell had planned to meet with his Cabinet yesterday morning at the VITA-Northrop Grumman offices in Chester. But the session was held in Richmond instead.

Johnson said the meeting was conducted at the governor's office -- the usual venue -- because "the folks at VITA need to get everything back and running."

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Massive Computer Failure In Virginia

Richmond, Va. --

A massive computer failure is crippling Virginia government, knocking out websites, blocking the issuance of driver's licenses, preventing the processing of jobless benefits and delaying welfare payments.

The outage, flaring Wednesday afternoon and expected to disrupt some services through the weekend, is attributed to 228 malfunctioning servers, which supply shared software and applications to clusters of state agency computers.

Twenty-six of more than 80 state agencies were hit by the shutdown, including the office of Gov. Bob McDonnell.

"We're disappointed to have a failure, an outage of this magnitude," Samuel A. Nixon Jr., head of the Virginia Information Technologies Agency, said yesterday. "No matter what you do, it's going to happen on occasion."

The incident is the latest embarrassment for VITA and Northrop Grumman, the company the state hired in 2005 to provide computer and communications services under a $2.3 billion contract -- Virginia's richest-ever privatization deal.

VITA and the firm, whose headquarters was lured to Northern Virginia from California by McDonnell, have quarreled for months over shoddy, expensive service. This past spring, VITA and the company announced a new agreement giving an additional $236 million to Northrop Grumman in return for a pledge of better service.

The Rain family of Lynchburg was hit twice by the computer blackout.

Marc Rain Jr., on his way to Old Dominion University in Norfolk, had lost his driver's license and tried to get it reissued Wednesday at the Department of Motor Vehicles office in Lynchburg, and then again yesterday in Richmond.

"We were dropping him off at college," said Rain's mother, Shelly Rain.

None of DMV's 74 offices could process license applications and may not be able to do so again until Monday, officials said. DMV still is handling other transactions, including vehicle decals and titles, and driving and vehicle records.

With its website inaccessible, thousands of out-of-work Virginians could not file jobless claims with the Virginia Employment Commission.

"Access to our website is down 100 percent," said VEC spokeswoman Joyce Fogg. "So no one can get to our website, not even us."

The Virginia Department of Social Services, which, among other things, manages child-support payments and aid to needy families, reports that the outage is disrupting benefits.

"It appears that some benefit payments will be delayed, but we will know more [today]," said spokeswoman Carla Hill. "We are still assessing and are doing everything we can to get back to normal business processes as quickly as possible."

Nixon, appointed by McDonnell under a new law strengthening gubernatorial control over VITA, said that the shutdown -- apparently the largest for the state since 2007 -- occurred about 3:30 p.m. Wednesday.

Nixon said 228 of 3,600 servers were affected when technicians for EMC, a Northrop Grumman subcontractor, were checking for faulty equipment. Nixon said he believes state computer data are largely intact.

Nixon also said that the interruption was of insufficient magnitude to activate a backup system at a duplicate computer center in Russell County, in Southwest Virginia.

Nixon said it is too early to determine whether Northrop Grumman will be punished financially because of the outage. The latest contract, which extends the company's deal with the state from 10 to 13 years, includes new penalties for poor service.

"It depends on how long the outage remains," Nixon said.

Megan Mitchell, a spokeswoman for Northrop Grumman, said, "Knowledgeable and dedicated staff at the agencies, VITA and Northrop Grumman are working together to respond appropriately to the impacted systems.

She added, "It is our priority to minimize these impacts and restore services as quickly as possible."

However, the incident alarmed legislators already skeptical about the effectiveness of the VITA-Northrop Grumman deal, its rising cost to taxpayers and implications for other privatization ventures.

"It's pretty obvious that Northrop Grumman continues to underperform, and I think it would have been wise for the governor to require quality performance before extending the contract for three years," said Sen. Janet D. Howell, D-Fairfax, a member of the Senate Finance Committee.

"This is a sign that privatization is very complicated and should be entered into with caution."

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