NEW ORLEANS, June 25, 2003 (PRIMEZONE) -- Negotiators for Northrop Grumman Corporation's (NYSE:NOC) Ship Systems sector and the unions of the New Orleans Metal Trades Council have agreed to extend their current labor agreement, and significantly increase wages for Union represented employees at the company's Avondale Operations in New Orleans and Tallulah, La., as well as at the Gulfport Operations in Mississippi.

The company and the unions reached the accord on Tuesday. The extended agreement, if approved by union members in a vote scheduled for Friday, will increase wages at the journeyman level by 18.6 percent - $2.87 per hour - during the course of the agreement. This will bring the Journeyman-level wage rate from the current $15.45 per hour to $18.32 by October 2006, a level that will be equal to the company's Ingalls facility in Pascagoula, Miss.

The company and the unions also agreed to add two paid holidays, which would be applied to a year-end shutdown period, beginning this year. In addition, the two sides agreed to increase the maximum annual vacation time for employees by an additional 40 hours, to a total of 168 hours. Other benefit improvements would also be implemented in the new agreement.

Under the new agreement, the company would also institute a six-month pilot program to assess the value of working four days a week on a 10-hour-per-day shift on the second and third shifts at the Avondale Operations facility in New Orleans.

The current labor agreement, which has been in effect since Jan. 1, 2001, would have expired on Oct. 3, 2004. The new date under the proposal is March 4, 2007, the same expiration date as the company's labor agreement with workers at its Pascagoula facility.

"The negotiating committee of the New Orleans Metal Trades Council has unanimously voted to recommend to our members the ratification of this proposed agreement," said Bruce Williams, president of the council, which represents all union-eligible workers at the Avondale and Gulfport facilities. Williams added that the council will brief its members in meetings scheduled for Thursday, with members voting on the contract extension and new provisions Friday.

Williams noted that the unions represent all union-eligible workers. However, only those who are actually members of the unions included in the council can vote. He pointed out that employees who wish to sign up for union membership prior to the vote may do so by contacting any union representative at union halls or at polling places at the time of the vote.

"One key to the success of our realignment efforts in our shipbuilding business is having the flexibility to send work to where there are skilled trades available to perform it or, alternatively, to send our shipbuilders to work on those ships that we may be building in adjacent yards," said Phil Dur, Ship Systems president.

"And the key to that flexibility is a fair system of compensation and benefits across our operations. That has been our objective in negotiating this new labor agreement with the represented workers who call Avondale or Gulfport their home yard. We are grateful for the support of our unions as we strive to level the playing field and improve the equity in our pay and benefit practices across the sector," Dur added.

Warren Fairley, international representative of the Boilermakers Union and lead negotiator for the Metal Trades Council said, "We are pleased to have been able to negotiate these improvements in wages and benefits for the employees. Cooperation has been an important part of the labor-management relationship at Northrop Grumman Ship Systems, and this proposed extended contract is further evidence of that cooperation."

"The intent of this contract extension, with its significant wage increases and other benefits, is to enable us to hire and retain the quality workers we need in our shipyards, and to increase productivity and efficiency, while providing a higher quality of life for our employees," said George Yount, vice president, Avondale Operations. "We have made significant progress in improving our facilities and workplace environment," Yount added, "and increasing wages and benefits for our employees is the next step in the improvement process. This is another example of the outstanding partnership being achieved by the company and its unions."

Added John B. (Jay) Foley III, Northrop Grumman Ship Systems' vice president, Gulfport Operations, "This extension will help enable us to retain the terrific employees we have here in our organization and recruit additional enthusiastic men and women to fill the open positions we will have in our shipbuilding trades. As a collaborative agreement between the company and its unions, we have all contributed to something that is good for the company, good for our employees and, just as important, good for the community."

Northrop Grumman Ship Systems' primary operations are in New Orleans and Tallulah, La., and Pascagoula and Gulfport, Miss. The sector also operates a network of fleet support offices in the United States and Japan. Ship Systems currently employs more than 18,000 shipbuilding professionals, primarily in Louisiana and Mississippi, and is one of the nation's leading full-service systems companies for the design, engineering, construction, and life cycle support of major surface ships for the U.S. Navy, U.S. Coast Guard and international navies, and for commercial vessels of all types.

Northrop Grumman Corporation is a $25 billion global defense company, headquartered in Los Angeles, Calif. Northrop Grumman provides technologically advanced, innovative products, services, and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding, and space technology. With approximately 120,000 employees and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.

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