DATE: Tuesday, November 25, 1997            TAG: 9711250596

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 

                                            LENGTH:   46 lines

NEWPORT NEWS SHIPBUILDING PLANS TO PURCHASE A SAN DIEGO SHIPYARD FACILITY WOULS ALLOW IT TO WORK ON WEST COAST AIRCRAFT CARRIERS.

Newport News Shipbuilding plans to buy a small San Diego shipyard so it can work on nuclear-powered aircraft carriers that are homeported on the West Coast.

The big Peninsula shipbuilder on Monday announced the deal to buy Continental Maritime Industries by the end of the year. Terms were not disclosed.

By acquiring Continental, Newport News Shipbuilding will be extending its grip on aircraft carrier maintenance and repair to the West Coast.

``Simply stated, we are following the nuclear carriers as they move to the San Diego harbor,'' said William P. Fricks, Newport News Shipbuilding's chairman and chief executive.

The carrier John C. Stennis, delivered to the Navy in 1995 by Newport News Shipbuilding, will become the first nuclear-powered flattop based in San Diego when it arrives next summer. While San Diego is home to the conventionally-powered Constellation and Kitty Hawk, the Pacific Fleet's other nuclear-powered carriers are based in Everett, Wash.

``The acquisition of a West Coast yard of Continental Maritime's quality and reputation is consistent with our stated strategy to pursue opportunities in U.S. Navy fleet maintenance,'' Fricks said.

San Diego, home to about 80 Navy warships and submarines, has the largest concentration of Navy ships on the West Coast.

With 350 employees, Continental Maritime does about $40 million a year in ship repairs, principally on Navy ships. It's a tiny yard compared to Newport News Shipbuilding, which employs 18,000 and has annual revenues of $1.8 billion.

``We could not have found a better strategic partner than Newport News Shipbuilding,'' said David H. McQueary, president and chief executive of Continental Maritime. ``The relationship will provide Continental with the capability to expand the services we offer to our U.S. Navy surface ship and aircraft carrier customers in the San Diego harbor.''

The deal is subject to approval of regulatory authorities and to a vote of participants in Continental Maritime's employee stock ownership plan.

Newport News Shipbuilding said the deal would add to its earnings in 1998.

In Monday trading on the New York Stock Exchange, the shipyard's stock slipped .3125 cents to $23.0625 a share. The deal was announced after the market's close.

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