Northrop Grumman returns $35 million in failed Avondale shipyard deal

Money is being applied to next year's budget for general operating expenses

A $35 million slice of cash being used to shore up next year's budget is tied to the poor performance of a shipbuilding company that had to return economic incentive dollars provided by the state.

Times-Picayune archiveThe Northrop Grumman shipyard in Avondale

Northrop Grumman Ship Systems didn't meet the employment requirements it had pledged as part of a $56 million upgrade deal with former Gov. Mike Foster's administration and had to repay $35 million.

Louisiana Economic Development Secretary Stephen Moret says Northrop Grumman was required to have 5,200 workers at the Avondale shipyard near New Orleans in 16 quarters from January 2003 through December 2010. Moret says Northrop Grumman only reached only 12 quarters.

So, the company reimbursed the state $35 million in March. That money is plugged into next year's state budget for general operating expenses.